SEBI announced changes on 12 September that will eliminate redundant paperwork for low-risk foreign investors such as sovereign wealth funds, central banks, and retail funds, and loosen minimum dilution requirements for IPO-bound businesses. The easing coincides with an increase in international outflows, which are being fuelled by high US tariffs, poor profitability, and high valuations. In 2025, foreign investors withdrew $11.7 billion from Indian debt and stocks.
By requiring two executive directors and separating the tasks of regulatory compliance (risk, investor complaints) and vital operations (trading, clearing, settlement), it also strengthened stock exchange governance. The minimum public offer for issuers with a market capitalisation of INR 1–5 lakh crore has been increased from INR 5,000 crore and 5% to INR 6,250 crore and at least 2.8% of the post-issue market capitalisation.
The 25% minimum public shareholding requirement will now be met by companies listing with less than 15% public float in 10 years, compared to 5 years for those launching with 15% or more. Once the government notifies them, the lenient deadlines will also apply to businesses that have not yet complied with the current regulations.
New Rules for Anchor Investors and Public Float
The regulations governing anchor investors have been relaxed. With life insurance and pension funds holding a portion of the reserved pool, the overall quota has increased from one-third to 40%. A third will be set aside for mutual funds, and any money that isn’t subscribed to by insurers or pension funds would go back to them.
With a minimum allotment size of INR 5 crore, the number of acceptable anchor investors has also increased. In order to increase India’s appeal to foreign investors, SEBI approved the Swagat-FI framework, which grants single-window access to “trusted” foreign portfolio and venture investors, including sovereign funds, central banks, and regulated retail funds, with a 10-year registration and KYC cycle instead of a 3-year one.
Additionally, they will not be subject to the 50% aggregate contribution cap that applies to resident Indians, OCIs, and NRIs. In addition, the India Market Access portal was introduced by SEBI and market infrastructure organisations to offer comprehensive instructions on FPI registration, documentation, and compliance.
To promote inflows from smaller cities and female investors, the regulator changed distributor incentives and lowered the maximum exit load in the mutual fund industry from 5% to 3%.
SEBI’s Push to Boost Mutual Fund Participation
With the introduction of a scale-based method for shareholder approval, SEBI has streamlined the rules governing related-party transactions. In addition to increased commissions for onboarding new female investors, distributors can receive up to 1% of the initial application value, or INR 2,000, for new investors from cities outside of the top 30.
Low-value transactions do not need to be disclosed, while high-value acquisitions now need a vote. Transactions above 10% of turnover require clearance for businesses with a turnover of INR 20,000 crore. From INR 1,000 crore to INR 5,000 crore, the bar for companies having a turnover of INR 40,000 crore has been lifted dramatically.
Quick
Shots
•For issuers with market cap INR 1–5 lakh crore →
minimum public offer raised to INR 6,250 cr & 2.8% stake.
•Companies with <15% float get 10 years (vs 5
years) to meet 25% public shareholding.
•Foreign investors exempt from aggregate
contribution limits faced by residents/NRIs/OCIs.
•New one-stop guide for FPI registration,
documentation, and compliance.
Famous and popular entrepreneurs are remarkable individuals those have not only transformed industries but also inspired a global mindset shift. With diverse backgrounds and domains of expertise, they consistently lead the charts and serve as exceptional role models. These renowned business leaders have earned their status as the epitome of success and have become synonymous with achievement. What sets them apart is their unwavering self-belief, cultivated from an early age, and their relentless pursuit of success and recognition. Their stories are a testament to the power of hard work, dedication, and a resolute entrepreneurial spirit.
Join us as we delve into the captivating life journeys of famous entrepreneurs and their business unlocking valuable lessons from these iconic figures in the business world that can inspire and empower you on your own path to success.
What Makes an Entrepreneur Successful?
There’s no one-size-fits-all formula for becoming a successful entrepreneur. If you look at the path of any well-known founder, you’ll notice it all started with a simple idea. But turning that idea into something real takes years of hard work, focus, adaptability, and smart planning, with the right support along the way.
If you’re dreaming of building something of your own, start by thinking bigger than just a business, think about how your idea could make a difference or move the world forward. Once your idea is in place, it’s your commitment, strategy, and persistence that will carry it through. With time and dedication, you could be the next success story.
List of Top Famous and Successful Entrepreneurs in the World:
Valued at $192 Billion, Elon Reeve Musk, is one of the most famous entrepreneurs and the richest person in the world. He is professionally known as Elon Musk.
Elon Musk owns SpaceX the largest aerospace manufacturer, a clean energy and electric vehicle company, Tesla Inc., and The boring Company, a tunnel construction company. Elon Musk also co-founded Neuralink Corporation, a neurotechnology company, and owns an AI-based research laboratory, Open AI.
Musk has a diversified interest in business fields. He has founded high-tech companies like The Boring Company, SpaceX, and Neuralink Corporation. He owns the largest aerospace manufacturing company and the world's biggest infrastructure company providing tunnel construction services making him the best in the list of top 10 international entrepreneurs.
Elon Musk is a business tycoon, successful investor, industrial designer, and engineer. Musk also co-founded X.com which was merged with online bank Confinity.
"Persistence is very important. You should not give up unless you are forced to give up." - Elon Musk
Books recommended by Elon Musk -
Zero to One: Notes on Startups, or How to Build the Future by Peter Thiel
The Hitchhiker’s Guide to the Galaxy by Douglas Adams
Superintelligence: Paths, Dangers, Strategies by Nick Bostrom
Jeff Bezos
Name
Jeff Bezos
Date of Birth
January 12, 1964
Education
Princeton University (BSE)
Source of Wealth
Amazon, Self Made
Net Worth
$221.8 billion (2025)
Best Entrepreneur in the World - Jeff Bezos
Jeff Bezos, the ecommerce tycoon, was born on 12 January, 1964 in Mexico. This man is the founder and CEO of Amazon, the largest ecommerce company. His biological father is Ted Jorgensen but his mother, Jacklyn Gise divorced Ted and married another man, Mike Bezos.
Jeff was graduated from Princeton University with degrees in Electrical engineering and Computer Science. He worked at Fintel to build their system for international trade.
He later changed career to banking industry in 1988. But after 5 years, he decided to start his own company. In 1994, Jeff Bezos started Cadabra, an online bookstore. The name was later changed to Amazon as it starts with an "A", beginner of alphabet. Jeff got the initial capital of 300,000 from his parents to start the company.
The company later transitioned into an ecommerce platform for all the product. Bezos has seen many ups and downs in his career. In fact, his company was almost bankrupted in 2002 due to over spending of funding. However, Jeff Bezos took Amazon out of that storm. As of 2023, Jeff Bezos is the third richest person in the world with a net worth of over $139 Billion.
“A brand for a company is like a reputation for a person. You earn reputation by trying to do hard things well.” – Jeff Bezos
Books recommended by Jeff Bezos -
Built to Last by Jim Collins
Creation by Steve Grand
Rework by Jason Fried and David Heinemeier Hansson
University of Pune, University of Warwick, Harvard University
Source of Wealth
Diversified
Net Worth
$6.4 billion (2025)
Best Entrepreneur in the World - Sanjiv Bajaj
Born on November 2, 1969, Sanjiv Bajaj is among one of the most successful Indian businessmen, investors, and philanthropists. He is the Chairman of Bajaj Finance Limited and the Chairman and Managing Director of Bajaj Finserv Limited, the holding group company for all the financial services business of the Bajaj Group. The Bajaj Group is one of the oldest and largest conglomerates in India. Bajaj Finserv consisting of lending and insurance companies, has an annual revenue of over 410 crores USD for FY23.
Under his leadership, Bajaj Finserv has emerged as one of India’s leading diversified financial services companies with solutions across lending, insurance, and wealth advisory category. With a consumer-first, digital approach and a culture focused on excellence through innovative disruption, Sanjiv is known for pioneering digital consumer financing in India, which helped transform the entire landscape of the financial services space.
“We have always focussed on building long-term businesses built on excellence, sustainable profit.”
Born on October 28th, 1955, William Henry “Bill” Gates III is an American business magnate, investor, philanthropist, and author. In 1975, Gates with Paul Allen co-founded Microsoft with a vision to be a successful and famous Entrepreneur of all time. They never knew their fortune and their hard work would enlist them in the world’s largest Personal Computer software company. In recent years Bill Gates has devoted more time to philanthropic activities. Bill Gates is one of the top 10 entrepreneurs in the world.
During his career journey at Microsoft, Bill Gates held the positions of chairman, Chief Executive Officer (CEO) and Chief Software Architect (CSA). Uptill May 2014 he had the highest individual shareholder. He has authored and co-authored several books. However, Bill Gates has been always ranked in the Forbes list of the world’s wealthiest people since 1987, and he was the wealthiest entrepreneur from 1995 to 2007, then again in 2009, and then from 2014 to 2017. Bill Gates is the most famous entrepreneur and holds the Guinness World record for inventing "World's First Microcomputer" in 1980.
"We all need people who will give us feedback. That’s how we improve."- Bill Gates
Popular Entrepreneurs in the World - Mark Zuckerberg
Born on May 14th, 1984, Mark Elliot Zuckerberg is an American computer programmer and Internet entrepreneur. He is one of the famous businessman in the world. He is the chairman, chief executive officer (CEO), and co-founder of Facebook, now rebranded as Meta. Since his adulthood Mark was keen to take up his future as a smart, influential and famous entrepreneur. As of 2017, his net worth is estimated to be the US $128 billion, ranking him as the 5th richest person in the world.
Facebook was launched by Zuckerberg from Harvard’s dormitory rooms on February 4, 2004. He was aided by his college roommates and fellow Harvard University students Eduardo Saverin, Dustin Moskovitz, Andrew McCollum, and Chris Hughes. The group then introduced Facebook to other college campuses. Mark is among the most famous entrepreneurs in the world. Time magazine has named Zuckerberg among the 100 wealthiest and most influential people in the world as a part of its Person of the Year distinction since 2010. As of 2023, his net worth is estimated to be the $87.3 billion.
"Facebook was not originally created to be a company. It was built to accomplish a social mission - to make the world more open and connected." - Mark Zuckerberg
Books recommended by Mark Zuckerberg -
Creativity, Inc. by Ed Catmull
Sapiens: A Brief History of Humankind By Yuval Noah Harari
The Rational Optimist: How Prosperity Evolves by Matt Ridley
National institute of Engineering, Mysore (BE), IIT Kanpur (MTech)
Source of Wealth
Infosys, Self Made
Net Worth
$4.6 billion (2025)
Narayana Murthy
Born on the 20th, August 1946, Nagavara Ramarao is commonly referred to as Narayana Murthy and is an Indian IT industrialist and the co-founder of Infosys, a multinational corporation providing business consulting, engineering, technology, and outsourcing services. His varied distinctive knowledge has led him to be a famous entrepreneur with showering success on his way. He is one of the famous Indian businessmen.
He started Infosys in 1981 and served as its CEO from 1981 till 2002 and as its chairman from 2002 to 2011. Fortune magazine has listed Murthy as one of the greatest and top Indian entrepreneurs of all time. Time magazine has described him as the Father of the Indian IT sector due to his contribution to outsourcing in India.
"It's very important to learn quick lessons from your failures, very important to recognize symptoms of failure pretty early, and it is very, very important to not to be attached too much to the idea - you have to know when to give up an idea." -Narayan Murthy
Books recommended by Narayana Murthy -
Winners Never Cheat Even in Difficult Times by Jon M Huntsman
What Money Can’t Buy: The Moral Limits of Markets by Michael J. Sandel
University of Illinois, Urbana-Champaign (no degree), University of Chicago (no degree)
Source of Wealth
Oracle, Self Made
Net Worth
$206.2 billion (2025)
Larry Ellison
Born on August 17th, 1944, Lawrence Joseph Ellison, commonly known as Larry Ellison is an world famous and most successful American businessman, entrepreneur, and philanthropist who has co-founded Oracle Corporation and thrives to become a famous entrepreneur by creating the best possible value of his software services to the most valued customer. Larry Ellison was the CEO of Oracle from its foundation until September 2014. At present he is the executive chairman and chief technology officer. Forbes magazine listed him as the seventh-wealthiest in the world and as the fifth-wealthiest person in America, with a fortune of $51.9 billion as of February 2017.
“When I do something, it is all about self-discovery. I want to learn and discover my own limits.” - Larry Ellison
Books recommended by Larry Ellison -
The Robber Barons: The Great American Capitalists by Mathew Josephson
Top Entrepreneurs in the World - Michael Saul Dell
Born on February 23rd, 1965, Michael Saul Dell is an American business magnate, investor, author, and philanthropist. Michael Dell is the founder and CEO of Dell Technologies, one of the world’s leading providers of information technology and infrastructure solutions. Michael wasn’t the only famous entrepreneur to ride the computer boom of the late 1980s and early 1990s from rags to riches.
Like Rod Canion of Compaq and Steve Jobs of Apple, Dell turned a fledgling start-up into a multibillion-dollar computer empire. But unlike the ill-fated Canion and Jobs, who lost control of their creations as they grew, Dell has managed to hold on to the reins of his maverick venture and achieve the unique distinction of being the computer industry’s longest-tenured CEO. As of February 2023, he is ranked the 24th richest person in the world by Wikipedia, with a net worth of $51.6 billion.
"There are a lot of things that go into creating success. I don't like to do just the things I like to do. I like to do things that cause the company to succeed. I don't spend a lot of time doing my favorite activities." - Michael Dell
Born on January 28th, 1940, Slim was ranked as the richest person in the world from 2010 through 2013. Carlos Slim is a Mexican business magnate, investor, and philanthropist. He secured his fortune from his large holdings in a significant number of Mexican companies through his empire, Grupo Carso.
He was ranked #7 on Forbes list of billionaires since 31 July 2016, with a net worth that is estimated at more than $50 billion. His empire includes education, entertainment, energy, healthcare, industrial manufacturing, transportation, retail, real estate, media, hospitality, high-technology, sports, and financial services. However, his great effort and a constant hunger to be a famous entrepreneur have bought him a great tenure of success. He is holding a net worth of $86 billion in 2023.
“Technology is going to transform people’s lives and society everywhere in the world. I spend most of my time studying new technologies. My main task is to understand what’s going on and try to see where we can fit in.” – Carlos Slim
Books recommended by Carlos Slim -
The Warren Buffett Way by Robert G Hagstorm
The Money Machine by Philip Coggan
Common Wealth: Economics for a Crowded Planet by Jeffrey Sachs
Sergey Brin
Name
Sergey Brin
Date of Birth
August 21, 1973
Education
University of Maryland, College Park (BS), Stanford University (MS)
Source of Wealth
Google, Self Made
Net Worth
$134.5 billion (2025)
Top Entrepreneurs in World - Sergey Brin
Sergey Brin is a computer scientist. Sergey Brin founded Google with Larry Page. The two became billionaires as Google developed into the world's most popular search engine and a media giant. In 2006, Google purchased the most popular website for user-submitted streaming videos, YouTube, for $1.65 billion in stock. In November 2016, Brin was ranked No. 13 on Forbes' "Billionaires" list, and No. 10 among U.S. billionaires who made the list. Sergey Brin stepped down as president of Alphabet, parent company of Google, in December 2019 but remains a controller shareholder and a board member. As of 2023, Sergey Brin has net worth of $102.1 billion.
Books recommended by Sergey Brin -
"Surely You're Joking, Mr. Feynman!" by Edward Hutchings
Top Entrepreneurs in World - Richard Charles Nicholas Branson
Born on 18th, July 1950, Sir Richard Charles Nicholas Branson is an English business magnate, investor, and philanthropist. He is the founder of the Virgin Group, which manages more than 400 companies. Richard Branson is very popular for his lifestyle and charity. His vision was well accomplished since he started his journey from an early age.
Richard started with a magazine called Student at the age of sixteen. Although it was his first business venture which curated a wonderful entrepreneurship journey which made him a famous entrepreneur. In 1972, he set up a mail-order record business and he opened a chain of record stores, Virgin Records, later known as Virgin Megastores respectively. Branson’s Virgin brand grew rapidly during the 1980s, as he set up Virgin Atlantic airline and expanded the Virgin Records music label.
Branson was knighted at Buckingham Palace for “services to entrepreneurship” in March 2000. He became one of the most prominent figures in British culture for his work in retail, music, transport, taste for adventure, and for vast humanitarian work. As of 2023, The Sunday Times estimates Richard Branson and his family's collective net worth to be an impressive £2.41 billion.
"There is no greater thing you can do with your life and your work than follow your passions – in a way that serves the world and you." - Richard Branson
Books recommended by Richard Branson -
Happiness: A Guide to Developing Life’s Most Important Skill by Matthieu Ricard
Big World, Small Planet: Abundance within Planetary Boundaries by Johan Rockstrom, Mattias Klum
One Hundred & One Reasons To Get Out of Bed by Natasha Milne
Jack Ma Yun
Name
Jack Ma Yun
Date of Birth
10 September 1964
Education
Cheung Kong Graduate School of Business (2006), Hangzhou Normal University
Source of Wealth
Alibaba Group and Ant Group, Self Made
Net Worth
$26.3 billion (2025)
Top Entrepreneurs in the World - Jack Ma Yun
Jack Ma, once an English teacher, became one of the most successful entrepreneurs in the world. He started Alibaba, a huge online shopping company in China that changed the way people buy and sell things.
In 1999, Jack Ma began Alibaba from his small apartment in Hangzhou with 18 friends. At that time, online shopping in China was almost unheard of. Alibaba first helped Chinese factories connect with buyers from other countries.
But Jack Ma dreamed bigger.
He later created Taobao, an online marketplace for everyday people in China. Today, both Alibaba and Taobao are leaders in China’s e-commerce world, helping millions of people run their businesses online.
Jack Ma’s journey shows that even big dreams can come true—with hard work, strong belief, and never giving up.
Books recommended by Jack Ma -
Tao Te Ching: by Stephen Mitchell, Lao Tzu
Built to Last: Successful Habits of Visionary Companies by Jim Collins, Jerry I Porras
Here Comes Everybody: The Power of Organizing Without Organizations Paperback by Clay Shirky
The Long Tail: Why the Future of Business Is Selling Less of More by Chris Anderson
Makers: The New Industrial Revolution by Chris Anderson
Business Cycles: by Joseph A. Schumpeter
Conclusion
The list above includes notable foreign entrepreneurs as well as successful entrepreneurs from India. These well-known individuals serve as a great source of inspiration, offering valuable insights into the path to success. Global entrepreneurs are driving innovation and creating impact across industries, inspiring a new generation of global entrepreneurs to think big and act boldly. Each of these popular and well known entrepreneurs has experienced both triumphs and challenges throughout their journey. As of 2025, these international entrepreneurs continue to work tirelessly for their companies, serving as a source of inspiration for aspiring entrepreneurs through their business ideas and stories. We hope that this compilation of renowned entrepreneurs and their stories has provided you with valuable lessons on navigating the entrepreneurial journey.
FAQs
Who are the most successful entrepreneurs in the world?
The list of entrepreneurs who are most successful and famous in the world are:
Jeff Bezos
Elon Musk
Sanjiv Bajaj
Bill Gates
Mark Zuckerberg
Sir Richard Charles Nicholas Branson
Sergey Brin
Carlos Slim
Michael Saul Dell
Larry Ellison
Nagavara Ramarao Narayana Murthy
Jack Ma
What industries have these famous entrepreneurs made an impact on?
These entrepreneurs have made a significant impact across various industries, including technology, e-commerce, space exploration, social media, and telecommunications.
Which entrepreneurs are on the list of the rags to riches stories of Indian entrepreneurs?
Dhirubhai Ambani, Karsanbhai Patel, Kalpana Saroj, Patricia Narayan, Sunil Bharti Mittal, and Narayan Murthy are some of the entrepreneurs who can easily be included on the list of the rags to riches stories of Indian entrepreneurs.
What are the characteristics of entrepreneurs?
Entrepreneurs are risk-takers, innovative thinkers, and self-motivated individuals. They possess resilience, adaptability, and persistence to overcome challenges, while being goal-oriented and passionate about their ventures.
What makes famous entrepreneurs stand out from others?
These entrepreneurs stand out for their exceptional vision, innovative ideas, ability to disrupt industries, and remarkable business achievements. They have built global empires and transformed the way we live and do business.
Can I learn from the experiences of these greatest entrepreneurs?
Absolutely! By studying the lives and journeys of these greatest entrepreneurs, you can gain valuable insights, learn from their successes and failures, and apply their strategies and principles to your own entrepreneurial endeavors.
Who is the most famous businessman?
The most famous businessman today is Elon Musk, known for Tesla, SpaceX, and X (formerly Twitter).
Money holds paramount importance in any business, big or small. You can have the greatest idea and the best team, but without funding, you wouldn’t lift a feather. From launching to scaling your business, no matter how great your product is, how much you save, or how big you’ve grown already, the inflow of capital and financial upliftment will inevitably be a necessity.
You need the capital to reach the milestones you have set at the expected point on the timeline. Without thinking about fundraising, you’re just sucking the life and potential out of your business. The steps you need to follow to acquire the funding are simple and direct. Get noticed. Let people find you. Connect. Let’s look at some ways to find an investor or ways to earn the fuel called funding for your company.
Below are our easiest ways to find investors for your small business or startup company:
The virtual world has made us connected for good. The online universe contains everything that you might ask for. They have startup launching platforms, and crowdfunding sites, some are highly popular with sophisticated and verified individual investors, angel investors, and even banks and people willing to deploy capital in a new stream.
Most of these platforms function in a peer-to-peer lending site fashion looking for sources offering business loans to donation-based, debt, and equity crowdfunding portals. Popular equity-based crowdfunding platforms are AngelList, SeedInvest, StartEngine, etc. Even Quora and LinkedIn can help you out, all you need to make sure is securing a credible name.
2. Research And List
Go online and make an inventory of your immediate contacts in the network create a list of investors who you feel would vibe with your goals and mission. Shortlist 30 to 50 of these and aim at securing their attention. Reach out to them in an informal environment, unfold your ideas, ask for genuine feedback, and always adapt using those suggestions, the next time you contact them.
3. Attend Events
Visibility is a key aspect when it comes to obtaining funds, you need to become the first choice of the investors you’re aiming for. You need to be in their heads when they make their decision. Prior research about the guests of the event and arranging meetings with prospective investors will go a long way.
Engage in the coding marathon, organized networking functions, industry trade shows, sporting events, charity fundraisers, film festivals, etc.
4. Angel Networks
Member-based networks that provide service by location are called angel networks. They basically function from a fund that has been set aside by an investment firm to source deals for the network. Applications are prescreened, the angels can stay anonymous, and founders can gather offers from up to a hundred investors in one place rather than moving from one angel to another.
These angel investors might not just invest in your business but can provide you with complete mentorship, share their contacts, and help you build your own network. Sites like Funded.com and Angel Capital Association can assist you with angel investors looking for an opportunity.
Accelerators are incubators for startups, they help to nourish the startup leading it to a path of success. They open their gates to serious entrepreneurs looking for genuine guidance and monitoring. They would be ready to introduce you to other investors and give business advice.
Usually while applying for accelerator programs, you must do extensive research and keep a check on records of their success.
These investors wish to take a bigger role in making your idea into a practical business model, they might be looking for a piece of your startup in exchange for funding. So, before collaborating with them, you might need to analyze how much you are willing to give up.
6. Social Media And Networking Sites
Believe it ornot, the social space can do wonders, being cost-effective, it might be the best way to get discovered. You can post an update about your developments or collaborate with influencers to promote you.
The most popular channels to acquire attention on social media are:
LinkedIn can be used to talk about your company or to seek quality introductions to pass social proof.
Facebook for maintaining cordial contact after one or two meet-ups with the investor. This helps in trust-building.
Twitter for meaningful conversations and knowing about what the investor shares.
Beyond these, there are many professional social sites that bring you in the ring with all types of investors in the industry. These might also connect you to the global investor environment.
Some professional social networking sites to consider for investor connections include EFactor, Xing, Cofoundr, and Meetup.
7. Personal Marketing
You need to have a strategy to prove your worth and raise those funds, then only you can see the growth graph rise. If it seems necessary, let your product go public, and get in the hands of influencers, and customers so that it might catch the eye of the investors.
If you’re successful in getting real customers, the pressure to obtain money from other sources will automatically lessen.
Make use of freemium and hybrid business models that can help get your product in the market for less cost, and let it gather the limelight.
A Guide to Marketing Your Business on LinkedIn
8. Use Your Family And Friends
Your friends and family might be your angels in disguise, and it won’t be a hard sell to convince them as they already trust you and know that you’re passionate. Just remember personal and professional relationships are best when kept separate. Maintain written records and inform them about any risks involved.
You can also use your friends as a bridge between you and investors, ask your friends in the industry for their recommendations. Climb your way up in the network, many investors specialize in specific markets, like biotech, retail, exports, or mobile app development, so they trust the network to find the right company.
At this stage of the development of your startup, perseverance might be the most crucial requirement. Do not get discouraged, if the funding doesn’t show up at your doorstep just after one attempt or maybe fifty, remember that infinite opportunities are waiting for you to knock. The one best suited for your business model and your needs would come around as what you’re seeking is also seeking you.
9. Incubators
The incubators in India are the actual instruments or agencies that drive startups, providing all the necessary resources, mentorship, and financial support to set up a company. They form co-working spaces and provide tools and equipment to patrons who are to guide startups develop good business models and products. They also connect entrepreneurs with investors, colleges, partners, and industry players with events and workshops. Many incubators also guide them through seed funds and early-stage investments; therefore, they can be the right choice at a time of funding winter. All these include benefits, such as grants, subsidies, and sector-specific support from even government-backed incubators.
Some of the important incubators in India include Startup Village-for student-led startups, IAN Incubator-hugely known for its strong investor network, and IIT Madras Incubation Cell-works for deep-tech ventures. They provide resources and industry-specific support to create the foundation for such startups to scale effectively. Given that it’s under an ever-increasing enrollment, this creates a great ecosystem for startups to benefit from.
India is home to several accelerator programs that lay a structured platform for early-stage startups to get their much-needed investment, mentorship, and networking. Usually ranging from a few weeks to several months, these programs may be operated either by private VC firms or by large financial entities. Intensive boot camps, expert mentorship, and strategic networking help startups refine their business models and scale up rapidly. In addition, accelerators often facilitate their connections to their potential investors where funding is equally provided, usually in exchange for equity, such as $120K for 6% equity through Techstars Bangalore Accelerator.
Notable accelerators in India include Google for Startups Accelerator, which supports AI/ML ventures with equity-free assistance, TLabs, which provides funding in its initial stages, supported by Times Internet, and Cisco Launchpad, which concentrates on enterprise technology and IoT. Numerous niche accelerators today focus on sectors like fintech, AI, and enterprise solutions, culminating in demo days where startups pitch to investors. Accelerators thus pave a fast-tracked route for growth for Indian startups by providing structured support and funding opportunities.
11. Crowdfunding
Crowdfunding is the new upcoming mode of fundraising for startups in India. The online platforms are used by startups to raise funds from a large number of people. Crowdfunding in India is giving the concept of bringing together the populace- much more popularly known today’s date as startup validation. The models of crowdfunding consist of donation-based (for social causes) which provokes people to donate for a cause; reward-based, where a company’s offers would be promised in return, debt-based, which pays out loans with interest, and lastly, equity model, in which ownership would be given only not completely legal here in India. Crowdfunding, unlike traditional funding routes like venture capital or bank loans, is a way for startups to get funds directly and more easily.
Prominent Indian crowdfunding platforms include Ketto for health and social causes, Fueladream for donation and reward-based campaigns, and Social for Action for small business funding. Crowdfunding also offers one the tools of validation on the market with general interest and feedback to measure. However, equity-based crowdfunding regulations are a pain point. In any case, crowdfunding continues to offer a new and uncomplicated mode of financing for Indian startups.
The practical and immediate funding option that business loans provide to startups in India is a readily available solution for operation expenses, expansion, and growth. Banks, NBFCs, and government schemes have made this option very affordable in financing startups, as it avoids loss of equity. Such loans come in the form of term loans for bigger capital expenses, working capital loans for the day-to-day running of the organization, and government-backed loans such as Mudra Yojana and Stand-Up India offering collateral-free loans under easier terms. The common eligibility criteria that would apply include, but are not limited to, age, citizenship, business registration, and financial viability, just to ensure that only qualified startups receive funding.
In addition to that, important wings of the government’s loan scheme include the Pradhan Mantri Mudra Yojana which gives a loan of up to ₹10 lakhs, and the Stand-Up India Scheme focusing on supporting SC/ST and women entrepreneurs that grant loans ranging from INR 10 lakh to INR 1 crore. Private lenders, such as IIFL Finance and HDFC Bank, also offer business loans for startups. Short loan approval processes, non-dilutive funding, and collateral-free options are some of the general characteristics of business loans that will still be considered a dependable avenue for bringing in cash for startups, although clear financial planning will be necessary for its effective management in repaying the loans.
Investor Confidence in Indian Startups in FY24, by Sector
13. Venture Capital
Venture capital (VC) is one of the major funding avenues for startups in India. In addition to funding, it also provides strategic guidance to a startup. The alternate second phase of growth extends from 1986 till today. The amount invested in India’s VC industry boomed to $14 billion in 2022, reflecting a compounded annual growth rate (CAGR) of 30% in the recent past. The VC funds in India invest in almost every stage of a startup-from seed to growth-funding projects with little more than just money but also a vision of the market and a network.
Fintech, edtech, eCommerce, health tech, SaaS, and AI have emerged as sectors with ample VC interest, making them the most attractive areas for funding. Such notable Indian venture capitalists include Accel India, which operates in the early stages of investment in e-commerce and SaaS, Blume Ventures, which values the hands-on approach, particularly in its spheres of interest such as AI and healthcare, and Kalaari Capital, which has funded some big-ticket tech-driven companies such as Dream11 and Razorpay. Although VC represents a fast-growth mechanism and provides strategic input, acceptance of VC funding requires a robust business model and the potential for self-growth. Though there are several regulatory hurdles and funding gaps for early-stage ventures, VC remains the strongest weapon for Indian startups in their journey of scaling.
How to Be Investor-Ready
1. Strong Business Plan
Executive Summary: Brief on your business.
Market Analysis: Evidence of market demand and competition.
Revenue Model: Clear explanation of revenue streams.
Financial Projections: Realistic forecasts for the next 3-5 years.
2. Clear Value Proposition
Unique Selling Proposition (USP): Clearly define how your business is different from others in the industry.
Customer Testimonials: Use existing feedback as validation for your USP.
3. Scalable Business Model
Growth Potential: Illustrate how your business will expand in new territories or offer up-sell cross-selling opportunities.
Technological Availability: Use technological intervention-cum-reduction-of-cost in operations.
4. Financial Health and Transparency
Orderly Financial Reports: Keep every financial record updated.
Internal Audit: Continues auditing to ensure financial integrity.
Debt Management: Settle any liabilities or debts that are pending.
5. Legal Preparedness
Registration of Business: The business must be registered.
Licenses and Permits: Register to get licenses and permits.
Intellectual Assets Protection: Protect your trademarks, patents, and copyrights.
6. Strong Leadership Team
Founding Team: Ideally, 2 to 3 founders with diverse skill sets with the cap table.
Expertise and Experience: The significant extent to member’s experience-related relevance is mentioned above.
7. Proof of Traction
Revenue Growth: Indications of revenue increase.
Client Acquisition: The number of customers acquired and retained.
Strategic Partnerships: Mention any significant partnerships or alliances.
8. Use of Funds Clearly Defined
Allotment: Be specific about the proposed use of investment funds (for example, product development, and marketing).
9. Risk Assessment
Risk Identification: Be aware of market risks, operational risks, and financial risks.
Strategies for Mitigation: Build programs to address such risks.
10. Investor Pitch Deck
Engaging Story: Create a pitch deck that is really compelling in articulating the potential of your business.
Key Elements: Include problem statement, solution, market opportunity, financial projections, and funding needs.
11. Positive Image in the Industry
Network Engagement: Mix with industry networks and thought leaders.
Good Customer Reviews: Positive customer testimonials would do that too.
Conclusion
Getting an investor to invest in your company is necessary to upscale your business. Take small steps. Network with people through social media channels. Interact with the social media community of like-minded people. Pitch your idea to angel investors or potential investors. A private investor can be s person or company who has the potential to invest in your company or startup. All these investors have only one goal in their minds. The goal of helping a company or startup is to succeed and get a good return on their investment.
Before pitching your idea to the investors you have to keep this n your mind at first. All these Investors look for people who have experienced entrepreneurs and a management team that has a track record of high performance and leadership in the company’s industry or in prior ventures. Most investors will do thorough research on your business, your expertise, your team’s background, and your background in the industry.
FAQs
How to Find Investors for Small Business?
Ask Family or Friends for Capital
Apply for a Small Business Administration Loan
Consider Private Investors
Contact Businesses or Schools in Your Field of Work
Try Crowdfunding Platforms to Find Investors
How to find investors for business in India or How to Get Investors for a Startup in India?
Create a profile on AngelList
Prepare a record of investors to share your ideas with
Small and Medium Enterprises (SMEs) play a vital role in enhancing the standard of living by generating employment opportunities, both in developed and developing nations. Despite numerous studies on business incubators, the significance of entrepreneurial skills in the success of such incubators remains uncertain. Business incubators are instrumental in not only launching startups but also supporting the entire entrepreneurial journey.
Business incubators have emerged as a valuable resource for startups seeking to overcome business challenges. Business incubators provide startups with the necessary support, resources, and guidance to help them grow and succeed. The primary function of business incubators is to enhance the chances of success for innovative startups and facilitate the entrepreneurial process. Initially, incubators were centered around the IT industry; however, they now collaborate with businesses from various industries and orientations. This article delves into the fundamentals of business incubators and incubation, their significance, the various types of incubation services, and the phases that make up the development of business incubation.
A business incubator is an organization or program that is designed to support the development and growth of startup companies. They provide services such as management training, mentorship, co-working space, networking opportunities, access to funding, and much more. Business incubators are perceived to be the mainstay of economic development programs. They create value by combining the entrepreneurial drive of startups with the resources generally available to new ventures.
The people working for a business incubator perform intensive research before supporting or funding startups. The primary objectives of business incubators are creating employment opportunities in the local economy and commercializing technologies.
The National Business Incubation Association (NBIA) defined Business Incubators as a Regional and National Development catalyst tool.
The whole idea behind business incubators is to offer a range of business development services, full access to small spaces on flexible terms, and to meet the needs of new firms. The services offered by a business incubator are designed to enhance the success and growth rate of new enterprises, maximizing their impact on economic development.
The number of incubators has grown considerably in recent years. This rise is attributed to factors such as corporate downsizing, increased entrepreneurship, new technologies, economic globalization, and the transfer of technology.
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Business Incubation is the name given to the process that involves supporting the development and growth of startups through the provision of various resources and services. The goal of business incubation is to help startups overcome the initial hurdles that come with starting and growing a business. There are numerous startups working on revolutionary ideas. But these ventures often need assistance. Business incubators provide this much-needed support. The goal of incubation in a nutshell is to increase the success rate of emerging startups and entities.
Types of Business Incubators
There are seven main types of incubators prevailing in the market today. These are:
1. Corporate Incubators
Their objectives are to enhance entrepreneurial skills and to help startups keep up with other industries/competitors. Corporate incubators target internal and external projects related to the activities of the company. The most common challenge corporate incubators face is the conflict between top-level executives and committees regarding objectives and management-related decisions.
2. Local Economic Development Incubators
They work on economic development by supporting SMEs and specific groups for the overall upliftment of society. These groups include small enterprises, handicraft-related businesses, and locally-sourced companies. Governance risk, volatility in management quality, long hours of negotiation, and conflicts are often associated with such incubators.
3. Private Investors’ Incubators
They assist high-potential businesses (such as technology-intensive startups) and then reap benefits by selling shares. These incubators lag in terms of quality and durability.
4. Academic Incubators
They offer new sources of finance while supporting the entrepreneurial spirit and focusing on civic responsibility. Academic incubators target external projects and projects internal to academic institutions.
5. Venture Capital Incubators
Venture capital firms have become a popular topic in the business world lately. They see incubators as a way to generate profits, and thus invest in new companies or offer funding in exchange for a share or ownership in the company. These firms may also provide management teams with access to angel investors and financial management as part of their incubation package.
6. Kitchen incubators
Kitchen incubators provide a safe space for entrepreneurs, chefs, and restaurateurs to develop their ideas. They offer a commercial kitchen or kitchen space where they can experiment with specialty foods, create new restaurant concepts or even start a ghost kitchen. Kitchen incubators are similar to other business incubators as they support and guide the development of “kitchens” from the initial stages to the full launch. Throughout the process, they provide mentorship, access to funding, and educational opportunities.
7. Social Incubators
A social incubator is an organization that fosters and supports individuals with innovative ideas for businesses that can bring positive change in the world. These businesses could be non-profit organizations or companies that aim to create products or services that contribute to environmental sustainability or social progress in society.
The process of business incubation typically involves several stages:
Application: Startups apply to a business incubator program by submitting an application and business plan. Some incubators have selective application criteria, while others may have a broader range of eligibility criteria.
Screening: The incubator reviews the application and business plan to determine if the startup is a good fit for the program. The screening process may involve an interview or presentation by the startup.
Incubation: Once accepted into the program, the startup works with the incubator to develop and execute its business plan. The incubator provides the startup with access to resources, mentorship, and other support services to help them achieve their goals.
Graduation: Once the startup has achieved its goals and is ready to operate independently, it graduates from the program. Graduation typically involves leaving the incubator’s physical space and resources but may still involve ongoing mentorship and networking opportunities.
What is the Role and Function of a Business Incubator in Startup Growth?
Incubators provide resources and services to entrepreneurs, including working space and offices, technical expertise, management mentoring, assistance in compiling an effective business plan, shared administrative services, technical support, business networking, and advice on intellectual property, sources of financing, markets, and strict admission/exit rules.
An incubator concentrates its effort on helping innovative and fast-growth startups that are likely to have a significant impact on the local economy. The role of business incubators in this context is pivotal, as they provide a supportive ecosystem and resources that empower these startups to thrive and contribute substantially to economic development.
Some of the Roles and Functions of Business Incubators Include
They guide startups/ventures on how to compete with established industry players.
Business incubators help with the basics of business.
Business incubators organize comprehensive business training programs.
They act as advisory boards and mentors.
They help in management team identification.
They offer marketing and PR assistance to new companies for brand establishment.
They help with business etiquette.
They provide technology commercialization assistance.
They help with regulatory compliance.
They provide intellectual property management.
They create jobs for mid-career personnel and veteran executives, benefiting communities and driving economic growth.
Features of Business Incubators
Industry-Specific Expertise: Some incubators offer specialized support tailored to specific industries.
Access to Research and Development Resources: Incubators offer startups R&D facilities for research, prototyping, and testing without high upfront costs.
Government Liaison and Advocacy: Business incubators assist startups with regulatory frameworks and foster government connections to streamline processes and address challenges.
Global Market Expansion Support: Incubators help startups go global by providing market insights and partnerships.
Corporate Partnerships: Incubators partner with corporations to offer startups resources, mentorship, and collaboration opportunities.
Focus on Sustainable Practices: Some business incubators prioritize eco and social responsibility. The role of the incubation center in this context is crucial, as it plays a pivotal role in fostering a supportive environment.
In-House Acceleration Programs: Some programs offer an accelerated phase with intensive mentoring, resources, and a condensed timeline to rapidly move startups toward scalability.
Exit Strategy Support: Incubators can assist startups with exit strategies like IPOs, mergers, or acquisitions for a smooth transition to the next phase of growth.
Market Intelligence Services: Startups can access market research, trend analysis, and competitive intelligence.
Incubator Alumni Network: A strong alumni network fosters collaboration and mentorship among successful graduates of the incubator program.
Choosing the Right Business Incubator
Understand Your Needs: Before picking an incubator, know what your startup needs. Incubators focus on different areas, so you need to identify the resources, mentorship, and networks that will help your business grow.
Research Incubators: Look into different incubators to find one that matches your business. They’re often supported by local schools, governments, or business organizations and offer more than regular business programs, focusing specifically on startups.
Evaluate Benefits and Costs: Once you have options, compare what each incubator offers against its costs. Incubators usually provide services for 1-2 years and may charge fees or take equity in your business. Make sure the benefits are worth the cost.
Make the Decision: After evaluating your options, choose the incubator that best fits your needs. The right choice can provide the resources, mentorship, and connections to help your startup succeed.
Assist ventures with both long-term and short-term growth.
Assist ventures only for short-term growth and that too for a small duration.
Allow companies to grow at their own pace.
Companies are under pressure to grow quickly.
Are generally non-profit organisations.
Are usually for-profit organisations.
May not be able to offer access to funds.
Offer access to funds and are also known as angel investors.
Don’t promise extensive growth to ventures.
Promise substantial growth to ventures.
They provide services such as Office space, mentorship, networking opportunities, business development support.
They provide services such as Mentorship, networking opportunities, access to funding, training, and education
Overall, business incubators are more focused on providing long-term support to early-stage startups, while accelerators typically work with startups that already have some traction and are looking to rapidly grow their business. Incubators may offer a broader range of services and have less selective application criteria, while accelerators are typically more focused on funding and may require equity in the startups they work with.
Startup Incubators and Accelerators: Definitions, Differences and Benefits
The performance of business incubators is often affected by incompetence in business management, financial handling, human resource management, and the lack of interpersonal and people skills.
With regard to the role of incubation centers in entrepreneurship development and the skills required for them to be efficient, several studies revealed that administration, technical, financial management, marketing, human resource management, and interpersonal skills were extremely important.
Access to advanced technology-based facilities, self-sustainability measures, support structures, and funding were found to be the major challenges confronting business incubators. It is also recommended that incubation managers who lack the necessary entrepreneurial skills enroll in business courses at local colleges or universities.
Business incubators provide resources and services to entrepreneurs, including working space and offices.
What are the types of business incubators?
Types of business incubators include corporate incubators, academic incubators, local economic development incubators, and private investors’ incubators.
What is the role of an incubator in startup?
Business incubators provide networking activities, help startups save operational costs, help with presentation skills, and get access to loans and funding.
What is the primary purpose of a business incubator in entrepreneurship?
Business incubators provide startups and entrepreneurs with the funding they require and provide access to industry mentors.
When was the first business incubator started?
The first business incubator was started in 1959 by Joseph L. Mancuso. It was opened at the Batavia Industrial Center in Batavia, New York.
How long does a startup typically stay in a business incubator?
The length of time a startup stays in a business incubator can vary depending on the program and the needs of the startup. Incubator programs can range from a few months to several years.
Do business incubators provide funding for startups?
Many business incubators offer startups access to funding sources, including seed funding, venture capital, and other types of financing. However, not all incubators provide funding, so it’s important to research individual programs to determine their offerings.
What types of mentorship do business incubators offer?
Business incubators offer various types of mentorship, including one-on-one mentoring from experienced entrepreneurs and industry experts, as well as group mentoring and peer-to-peer mentoring opportunities.
How do I apply to a business incubator program?
To apply to a business incubator program, startups typically need to submit an application and business plan. Some incubators may also require a presentation or interview as part of the application process.
Describe the functions of the incubation centre?
The startup incubation centre acts as a catalyst for growth, providing necessary resources, mentorship, and a collaborative workspace. It fosters innovative ventures, accelerates their development, and creates a supportive ecosystem for entrepreneurial success.
What is the role of incubator in startup?
An incubator helps startups by providing resources, mentorship, and networking opportunities. It supports early-stage businesses with guidance, funding options, and a collaborative environment to grow and succeed.
One of the most significant long-term investments investors can make is in an initial public offering (IPO). Early on, investors can grow their cash by participating in the company’s growth. However, plenty of examples of companies that made a great first impression on the stock market but eventually bombed or underperformed once their shares were listed.
This is why, before putting money into a forthcoming initial public offering (IPO), it’s crucial to do thorough research on the company. After thorough research, investors will have all the data they need to make a well-informed decision. Now, let’s examine the steps an investor can take to evaluate an initial public offering. There is a long and lonely road ahead of a company that has decided to go public: the path to making an initial public offering (IPO). The regular time frame for an initial public offering is six to nine months.
The business and the investment bank collaborate on creating the prospectus and registration statement. This offer’s most crucial document, the red herring prospectus (RHP), is available to and can be used by retail investors. The document covers all company aspects except the amount of shares offered or the price. The red herring prospectus is an essential document for all enterprises.
The Companies Act states in Section 32:
A company proposing to make an offer of securities may issue a red herring prospectus prior to the issue of a prospectus.
A company proposing to issue a red herring prospectus under sub-section (1) shall file it with the Registrar at least three days prior to the opening of the subscription list and the offer.
A red herring prospectus shall carry the same obligations as are applicable to a prospectus and any variation between the red herring prospectus and a prospectus shall be highlighted as variations in the prospectus.
Upon the closing of the offer of securities under this section, the prospectus stating therein the total capital raised, whether by way of debt or share capital, and the closing price of the securities and any other details as are not included in the red herring prospectus shall be filed with the Registrar and the Securities and Exchange Board.
Issuers and underwriters promote the initial public offering (IPO) using the RHP. It is the most helpful resource for assessing the offer for a retail investor. Included in the paper are the company’s financials and other relevant details. This document also includes all the required disclosures outlined in the Companies Act and by SEBI. You will find definitions of all the main concerns and industry-specific terms here. Perhaps this section isn’t necessary for a thorough analysis of an offer from a sector with which you are already well-versed.
This one is crucial among the prospectus sections. This informs the investors about the intended use of the IPO funds. This is a surrogate for the company’s financial management and an indication of the future of the company. In this part, we describe the industry in which the business works and offer our predictions and forecasts for the future of that industry. This section will describe our business and go over our main activities. It lays forth the process by which the business makes money. This is very important to investors because it lays out exactly what they will get when they buy shares in the company.
Leadership
This section provides information about the company’s promoters, directors, and key management staff. The management team’s competence is a significant factor when investing in a new firm. Consequently, investors pay close attention to this part and try to learn as much about the company’s founders as possible.
Administrative and Miscellaneous Data
Every pending lawsuit that has been filed against the corporation, its promoters, or its directors is listed in this section. As a result, it provides investors with a more comprehensive perspective about the future and the primary emphasis of the company. In this portion, the investor is given the opportunity to put on his microscope glasses and examine each and every item that is discussed in this area.
Generating Interest
The initial public offering (IPO) should be a significant event for the company, similar to the summer blockbusters or Khan tentpole films. The initial public offering (IPO) roadshow is one strategy for getting the word out among investors. Once an initial public offering (IPO) is greenlit, the company’s investment bankers and underwriters go to work. To promote the IPO, they visit key financial centres across the globe. They are known as a “roadshow” since they travel from place to place.
Selecting between Fixed pricing issues andbook-building issues
Two distinct IPO procedures exist. Fixed pricing issues and book-building issues. In a fixed-price issuance, investors are informed of the price at which shares will be sold and allocated.
Alternatively, investors can bid on shares within a 20% range in a book-building offering. Only once bidding is closed is the ultimate price determined. An IPO price band may be as narrow as 20%. This price range is open to bids from both retail and institutional buyers. All investors have access to the book, a compilation of all the bids received for the initial public offering. That is to say, all present and future investors have access to the demand for the shares offered at different prices.
The IPO floor price serves as the minimum acceptable bid and sets the upper limit of the price range. The band’s upper limit, the IPO cap price, also prevents it from becoming higher.
Typically, the book is open for three days, during which time bidders have the opportunity to alter their first submissions. Because issuers can learn more about demand and pricing during the book-building process, they favour it over fixed price issues. So long as the market is prepared to give the value the issuer believes the issue is worth, the issue can proceed. The cut-off price is the final selling price of the issue. This is the maximum possible selling price for all the shares being offered.
The last step is to sell the issues on the primary market and collect the funds from the investors. Typically, there is a five-day workweek for the bidding process. The allotment of IPO shares is done within a 10-day window following the end of the bidding round. When an initial public offering (IPO) is oversubscribed, the shares are proportionally distributed among the applicants. Consider a scenario where the number of oversubscribed shares is four times the permitted amount. Then, out of 10 lakh shares, only 2.5 lakh will be allocated.
FAQ
What are investors most likely to look for in an IPO?
Investors look for strong financial performance, growth potential, and a capable management team in an IPO. They also consider market conditions and competitive advantages
How do you predict an IPO?
To predict an IPO, analysts evaluate the company’s financial health, industry trends, and market conditions. They also consider growth potential and investor sentiment.
What is the main indicator of successful IPO?
A successful IPO is marked by a significant rise in share price on its first day, indicating strong investor demand. Other signs include high trading volume and meeting post-IPO performance goals.
Most investors in India’s startup scene are optimistic about the future as Prime Minister Narendra Modi’s National Democratic Alliance (NDA) forms the government for the third time in a row.
According to a survey by a well-known media house, nearly half of the venture capitalists and angel investors surveyed think that the outcome of the Lok Sabha 2024 elections will boost investor confidence in India’s startup scene.
Some 18% of participants are taking a wait-and-see approach to their investments after the elections, while 32% think the elections will have no effect on market sentiment. Only 4% of investors expressed the opinion that sector-specific measures will be implemented as a result of the elections.
Reactions From Investors
Sharing his views on the development, Karna D Shinde, Strategic Investor and Advisor stated, “The Modi government’s visionary approach towards nurturing India’s startup ecosystem has sparked a new era of innovation and opportunity. Through initiatives like Startup India and Digital India, the administration has simplified regulatory frameworks, enhanced funding avenues, and fostered an environment where creativity and entrepreneurship can thrive. By establishing incubation centres, promoting skill development, and easing tax burdens, the government has made significant strides in transforming India into a global startup hub.”
“The focus on digital connectivity and international collaborations further underscores the commitment to integrating India’s startup landscape with global standards. Such holistic and structured support from the government has instilled confidence among investors, catalyzing the growth of innovative enterprises across the nation. The convergence of policy support, infrastructure development, and a renewed entrepreneurial spirit is creating an ecosystem where startups are not only surviving but thriving. This optimism is not just about the present government’s initiatives, but about the long-term vision of positioning India at the forefront of global innovation. With these foundational efforts, the future of India’s startup ecosystem looks promising, driving economic growth, and creating millions of jobs, thereby contributing to a resilient and self-reliant economy,” he added further.
Marking some of the initiatives of the present government, Mahankali Srinivas Rao (MSR), CEO, T-Hub said, “The abolition of the Angel Tax for all classes of investors is a pivotal move that will create a more supportive environment for angel investments, ultimately benefiting startups and paving the way for India to become a global innovation hub. The establishment of an INR 1,000 crore venture capital fund dedicated to boosting the space sector is another forward-thinking initiative. Moreover, the introduction of the Anusandhan National Research Fund and a financing pool of INR 1 lakh crore to spur private sector-driven research and innovation is a game-changer. At T-Hub, we are excited about these developments and the positive impact they will have on our vibrant startup ecosystem. These initiatives will provide startups with the necessary resources and support to thrive, innovate, and contribute significantly to India’s economic growth and technological advancement.”
Reactions From Startup Sector
Amit Bansal, Founder, BharatLoan has put his views forward and commented, “We are thrilled by the optimism among investors regarding the Modi government’s efforts to bolster the Indian startup ecosystem. This positive sentiment is a testament to the government’s progressive policies and initiatives aimed at fostering innovation and entrepreneurship. A robust startup ecosystem not only drives economic growth but also creates job opportunities and encourages technological advancements. Such a dynamic environment is essential for nurturing the next generation of innovators and entrepreneurs.”
Gaurav Bhagat, Founder, of Gaurav Bhagat Academy also shared positive feedback, he said, “Certainly, investors are feeling optimistic. One major victory for startups was the abolition of the angel tax, which had been a top demand. Additionally, key policy decisions like the creation of an INR 1,000 crore venture capital (VC) fund and the reduction of TDS on e-commerce transactions from 1% to 0.1% highlight the government’s strong support for startups.”
The I-T department slaps notices on Indian startups asking fortheir investor’s identity and last three years’ ITRs to verify their creditworthiness and genuineness of the transactions. Ashneer Grover jumped on X to question the pragmatism of this notice.
The ITR notices to Indian startups since earlier this year continue to create uncertainty and anxiety for the startups, making it difficult for them to raise funding. The turmoil started following the Income Tax Return (ITR) notices that were sent, under Section 68 of the Income Tax Act, 1961, to various startups earlier this year asking for the ITRs of the last three years of their investors and shareholders. The Income Tax Department slapped the notices to seek information about the creditworthiness of their investors and shareholders to verify whether the amount invested aligns with the income declared by them.
The I-T department has been sending these notices to startups that have raised large amounts of money from angel investors or venture capital firms. The I-T department is concerned that some of these investments may be disguised as loans and that the startups may be avoiding paying taxes on the interest income.
Ashneer Grover, former Co-Founder, and Managing Director of BharatPe, took his concern to X to ridicule and raise questions on the grounds on which the notices are being sent. He acknowledged that in the last month, several startups, including some under his portfolio as well, have received the ITR notices seeking the shareholder’s information.
He said, “In the last 1 month, a number of startups (a few in my portfolio as well) have received Income Tax notices asking to furnish information about shareholders.”
Grover even raised questions on how and why would a startup have their shareholders’ last three years’ ITR details and why would the shareholder or individual share the same with a private company.
He said, “Bahut interesting hai (It is very interesting) – they are asking start-up companies to furnish 3 year ITR of all shareholders. 1) How and why will companies have ITR of shareholders? 2) Why would a shareholder/individual share their ITR with a private company?”
In the last 1 month, a number of startups (a few in my portfolio as well) have received Income Tax notices asking to furnish information about shareholders.
Bahut interesting hai – they are asking start-up companies to furnish 3 year ITR of all shareholders. 1) How and why will… pic.twitter.com/f48593uE4T
Replying to Grover’s post, the I-T department clarified that the notices were sent as per Section 68 of the Income Tax Act, 1961, when being asked by an Assessing Officer (AO), it is the responsibility of the company to provide the required information about their investor, their creditworthiness and their legitimacy.
His post also contained an image of the notice issued under Section 142(1) of the Income-Tax Act, 1961 which gives the Assessing Officers (AOs) the power to seek data from those filing the ITRs.
It reads, “Provide documentary evidence to substantiate the identity and ITR of last three years of shareholders to substantiate creditworthiness (of) the shareholders as well as the proof of the genuineness of the transaction in respect of fresh credit of the share capital/premium account,”
The reply from the I-T department on X reads, “Section 68 of Income-tax Act, 1961 (the Act) under which the AO has made the enquiry about the creditworthiness of the shareholder/investor, places the initial onus on the assessee-company to prove the following: the identity of the investor, the creditworthiness of the investor and genuineness of the transaction”
“Finance Act, 2012 mandated that the nature and source of any sum credited as share capital, share premium, etc., in the books of a closely held company (excluding Venture Capital Fund or a Venture Capital Company registered with SEBI) shall be treated as explained u/s 68 only if the source of funds from a resident shareholder is also explained by the investor,” the I-T department added.
The I-T department also mentioned that in this case the notices are sent as the AO has sought to assess the genuineness of the transaction and source of investment by the shareholder or investor. This is to be done to verify if the amount invested is commensurate with the income declared in the ITR of the investor.
However, it was also mentioned by the I-T department that the companies have the liberty to share the PANs of their investors instead, for verification.
“This has been the practice,” the I-T department added.
1.Section 68 of Income-tax Act, 1961 (the Act) under which the Assessing Officer (AO) has made the enquiry about creditworthiness of the shareholder/investor, places initial onus on the assessee-company to prove the following:
PTI reported that Mohandas Rai, Co-founder, of Infosys, who is also an investor, posted on X, tagging Prime Minister Narendra Modi and Prime Minister’s Office (PMO) on Grover’s initial post, to say it was “misleading”. He also added, “Sir tax terrorism is increasing! This is against what you have stood for. Please intervene.”
In the same post, he also tagged a multitude of politicians and ministers, including Tejasvi Surya, MP and BJP Yuva Morcha National President, and PC Mohan, BJP’s Bengaluru Central MP.
In response to the clarification issued by the I-T department, stating that companies have the option to furnish their investor’s PANs as an alternative to their last three years’ ITRs, Rai expressed his disagreement, condemning it – “again this is misleading.” He also tagged the Union Ministry of Finance, Prime Minister Narendra Modi, and Finance Minister Nirmala Sitharaman in his response, which was later reposted by Grover on X.
“Asking for the PAN is the law. But how can you also ask for 3-year tax returns of the investor from the startup? Does the law permit this? @IncomeTaxIndia itself says that Pan is sufficient. Why this overreach?” Rai asked.
Entrepreneur Steve Blank created one of the most well-known definitions of a startup. According to him, “a startup is a temporary organization searching for a repeatable and scalable business.” Such businesses operate with limited resources trying to fulfill a market gap with products that have an uncertain demand. Startup businesses rely on external funding for growth and expansion. These businesses operate at three different levels –
Operational Level – launching and testing a new product within a limited market
Tactical Level – fulfilling commitments made to investors and also raising new funds
Strategic Level – finding a suitable and scalable business model
There are a few different types of startup businesses operating in different niches and market spaces.
Scalable Startups
Essentially, these are businesses that operate within the technology field with a high potential for growth and expansion that can span a global reach.
Small Businesses
With little outside and market pressure to grow and expand, such businesses operate at their own pace and have access to very few resources. These businesses are self-financed by an independent team and are also called self-starters.
Lifestyle Startups
Needless to mention, these businesses work in the lifestyle space, be they products or services. Such businesses are often created out of passion
Buyable Startups
The name itself categorizes such businesses as being created with the eventual aim to sell to bigger players within the industry
Large Company Startups
These startup businesses are sprung from large conglomerates and use limitless resources and technology available to them
Social Startups
Such businesses are more focused on the social aspect of business rather than on the bottom line
Features of Startups
As different as startup businesses can be, playing in different markets and niches, they share a few common features –
Innovation
Most startup businesses work with new products that answer an existing market need.
Technology
Startup businesses are usually looking for a competitive advantage. They use AI and other technological solutions to build innovative products or services.
Scalability
These businesses grow into scalable and repeatable business models.
Expansion
Startup businesses are expected to have quick and high growth and expansion.
Investors that invest in startup businesses have one goal. That is to earn a strong profit. Whether investment happens through an angel investor, a venture capital firm, or equity crowdfunding platforms the final aim is for the business to succeed and earn a profit. This is the main reason that investors conduct a thorough check of the startup business before investing. There are a few important criteria that startup businesses need to meet for receiving funds through investments.
What makes a business operational is the team that works around the business idea. Hence, it becomes important to evaluate if the team has a competitive edge within the industry. Also, it is essential to validate the suitability of their skill set for the startup operation. The primary question is also to assess if the startup is built around a genuine problem that they have encountered.
Target Audience Identification
As with any business idea, it is important to clearly articulate the target market and the target customers. The startup must have clarity on the target audience who will become the early adopters of their products. Also, the founders of the business must address the worst-case scenario and the ways to handle it.
Is the Business Offering a Genuine Solution
This is probably the most important question for the startup business. Is there a genuine need for the product? How did the idea take shape? Will the business idea hold relevancy in the long term? Also, what is the benefit of the product that is offered in terms of quality, cost, convenience, and efficiency?
Competitive Advantage in the Market
Startup businesses must be constantly aware of their direct and indirect competitors within the market that they are operating. They must also question the position of the startup business in the future in comparison to their competition.
Building an Effective Business Strategy
A startup business must have an effective business strategy that details the ways in which it will acquire and build its customer base. This means that the business must strategize and create marketing initiatives that ensure a deep market reach. Secondly, the business must plan an effective strategy for future cost reduction that affects the company’s bottom line.
Conclusion
There are many startup businesses that build enormously successful enterprises and there is an almost equal number of startups that fail and fold within a short span of time. It remains upon the investor to conduct a thorough check to ascertain the health and future prospects of a startup business to ensure that the business grows to earn profits for itself and its investors.
FAQs
What are the levels at which startup businesses operate?
The startup businesses operate at three different levels –
Operational Level
Tactical Level
Strategic Level
What are the various types of startups?
There are a few different types of startup businesses operating in different niches and market spaces.
Scalable Startups
Small Businesses
Lifestyle Startups
Buyable Startups
Large Company Startups
Social Startups
What do investors look for before investing in a startup business?
There are a few important criteria that startup businesses need to meet for receiving funds through investments.
The internet along with modern technology has seen a boom in the past decade. It has stimulated a lot of young people to turn into entrepreneurs by crafting their unique business ideas. The 2021 Entrepreneurial Spirit Index published by IPSOS shows 29% of Generation Z ranked as having a very high entrepreneurial spirit, compared to 36% of Millennials, 33 % of Generation X, and 25% of Baby Boomers. As of 2022, there are reportedly 582 million entrepreneurs worldwide. This growth has encouraged more people and companies to become investors.
The business you start might have huge market potential. But, for it to reach a wider market and attain success beyond the geographical limit, it needs constant financial support. This financial aid is offered by Investors and VCs who are always choosy about their investments. Investors expect certain qualities from entrepreneurs before they decide to invest. So, what are they? What are the qualities that an investor looks for in an entrepreneur? Let’s see.
Here are some of the entrepreneurial skills to impress an investor.
In-depth Business Knowledge
Pitching your business plan to investors requires inside-out knowledge of your business and its market. An excellent idea portrayed with poor business knowledge can be fatal. Moreover, the confidence with which you approach the investor has a direct effect on the funding. In-depth business knowledge gives you that confidence.
Before preparing your presentation for investors, gain clear knowledge about the scope and problems of your business and market. Construct a plan to solve those problems. You can gain that by interacting with your prospective customers and other market experts. Look for the questions, criticisms, and suggestions that the investor might toss at you. Be prepared for such things so you can provide a satisfactory response.
Team Building Skills
Many investors prefer to invest in businesses that have a good team. As Will Herman, a popular Angel Investor himself said, he believes in a founder who has a good team. It includes not only the co-founders but also the management team as a whole.
Every person can’t be an expert in all aspects of the business. So experiencing yourself in what you’re good at and building a team for other aspects can gain you a positive note from investors. Even an average business idea can be executed exceptionally through a good team. If you’re desperate about getting the investor’s concern, then knock on their doors with a competitive squad.
Precision in Fund Requirements
Being clear about the amount required and the ways of utilizing them is a significant factor seen by Investors. Opting for an open-ended request for funds shows your lack of business awareness. Get to know the market well and be as accurate as possible in your need for funds.
Determining the channel of fund flow is another important and challenging factor. You need to be more specific to the investors regarding what ways their money will be utilized. It could be for customer acquisition, product development, or anything. Pitch them with specific numbers to gain their interest.
The primary quality of a good entrepreneur is his Communication skills. The success of a business depends on the coordination between various departments, teams, and stakeholders. All these can be successfully bridged through effective communication by the entrepreneur.
Therefore investors expect entrepreneurs to be good communicators for effectively managing the business. This will be keenly observed during your pitching. Now, what makes one a good communicator? Deep knowledge develops confidence and this, in turn, grooms you to be a good communicator.
Passion towards Business
Create a vision for your business and develop a sense of passion while running towards it. The more passionate you are, the more determined you’ll be towards achieving your goal. The path to success in business will be loaded with ups and downs. How you overcome it depends on how passionate you are about your vision. Investors look for such dedicated and vision-driven entrepreneurs to invest their money.
Organizational and Leadership Skills
The success of the business depends on the way it is organized and managed. Coordinating teams, assigning appropriate tasks, and motivating them towards the company’s goals are some of the functions that come under organizational and leadership skills. A leader inspires his employees directly. Therefore, this skill becomes essential for the success of a business. Due to its impact on their investment, investors expect this quality in you during pitching.
Adaptability and Learning Skills
An entrepreneur should always be open to learning and suggestions. Adapting to the constantly changing market is a crucial skill that an entrepreneur should possess. It keeps you alive in the face of a competitive market.
Experienced investors may provide you with advice regarding the business. Even some people you meet, customers, or your failures might teach you something. You must keep yourself open to such learnings. Failing to look around and close yourself off might land you and your business in trouble.
Every entrepreneur must possess problem-solving skills to deal with day-to-day business challenges. Problem-solving is a combination of various other skills like analytical and critical thinking. It starts from identifying a problem and may involve taking complex decisions for business growth. You can develop this skill by going through various case studies of organizations and thinking from their perspective.
Strategic and Critical Thinking Skills
Strategic and critical thinking becomes essential for the overall development of entrepreneurial skills. You should be able to foresee problems from various perspectives to arrive at the best solution. Critical thinking becomes essential for making strategic business decisions.
Developing the skill of thinking strategically and critically would help you out beat your competitors and expand your market reach.
Marketing Ability
Communication skills will help not only to sell your ideas to investors but also your products to customers. This requires a clear understanding of customers’ needs and preferences, your competitors, market conditions, and other external factors. Investors look for your team’s ability to convince a person and make them buy your product or service.
Investors believe more in you than your business plan or products. Their investment depends on the value of trust you offered them. Trust can be built from possessing a combination of various skills mentioned here. Gaining as many skills as possible is always an added advantage to you and your business.
FAQs
What are the 10 Entrepreneurial skills?
10 important entrepreneurial skills an investor looks for in an entrepreneur are:
We are living in an era where fintech is taking over the world. Technology has always given us a revolutionary form in every sector, now it is the turn for fintech. India has become a hub for startups. More and more people are showing their interest in being an entrepreneur. Fintech startups are showing immense growth in the country and as of now, India has over 2,100 Fintech companies. As per reports, by 2025 the fintech market in India is expected to reach $150-160 billion.
Now, any kind of business needs funds to function, without funds, the survival of a business is not possible. The fintech industry is booming with new business ideas and opportunities alike. Now Fintech startups are experiencing growth and one of the prime reasons is the investors. They are providing these startups with the required funds that their business needs. In this article, we will talk about the different investors in India that invest in fintech startups. So, without any further ado, let’s get started.
“FinTech is not only an enabler but the driving engine” -Pierre Gramegna
How Fintech Founders are Planning to Dominate the Indian Bond Market?
Elevation Capital which is formerly known as SAIF Partners is a venture capital firm known for investing in some of the most popular startups and is one of the biggest investors in India. The company was founded in the year 2002 by Ravi Adusumalli and since then it has never looked back and provided support to some of the biggest fintech startups in India. Some of the popular Indian fintech startups that have received funding from this venture capital firm are PayTm, FamPay, Uni, Jodo Anthem, Aye Finance, Acko, and more.
This Mumbai-based investment firm, founded in 2010 has been showing its grasp by investing in some of the seed-stage and early-seed-stage startups from all sectors of business. The venture capital firm has participated in more than 175 funding deals. Some of the Indian fintech companies it has invested in areInstamojo, Turtlemint, Slice, Zopper, Kaleidofin, Unicoin, smallcase, and more. Blume Ventures is one of the most popular venture capital firms in India that has generously invested in some of the most popular fintechs in India.
Better Capital is founded by Vaibhav Domkundwar and the firm is focused on building and investing in promising businesses. This India-based, venture capital firm has been showing its interest in fintech startups from the very beginning. Better Capital’s investment portfolio includes more than 200 companies among which 40 are related to fintech. The venture capital firm has invested in some of the popular fintech startups like Rupeek, Open, Slice, M2P, Jupiter, Rupify and others.
Kalaari Capital is a popular Indian Venture Capital firm that is founded by a woman, Vani Kola. The headquarters of the Kalaari Capital is situated in Bengaluru. The investment firm founded in 2006 mainly looks for promising and early seed-stage startups from multiple sectors to invest in. Kalaari Capital has invested in the likes of Threedots, Upstox, Toffee Insurance, AffordPlan, WeRize and other fintech startups.
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The venture capital firm mainly focuses on early-stage businesses and invests in them. The company focuses on multiple sectors including Fintech, Edtech, b2b sectors dealing with fintech, Health-tech, SaaS, consumer brands and others. The headquarters of the company is situated in Mumbai. The company has invested in more than 70 deals and among them, 9 are related to fintech startups. Some of the popular fintech startups that the venture has invested in areLendingkart, LoanTap, Upwards, Propelld, and more.
Prime Venture Partners
Founder – Amit Somani, Sanjay Swamy and Shripati Acharya
Prime Venture Partners – Fintech Investors in India
Prime Venture Partners was founded in the year 2011 and since then it has funded many fintech startups. The company was founded by Amit Somani, Sanjay Swamy and Shripati Acharya and the headquarters is situated in Bengaluru. The company has also invested in the sectors of Edtech, SaaS, and health care. Some of the major fintech startups that Prime Venture Partners have invested inareNiyo, AffordPlan, KredX, Knight FinTech, and more.
Pravega Ventures
Founder – Mukul Singhal, Rohit Jain and Vinay Menon
Another prominent fintech investor in India on the list is Pravega Ventures, founded by Mukul Singhal, Rohit Jain and Vinay Menon. The headquarters of the company is situated in Delhi. Pravega Ventures has contributed to more than 26 funding deals till now. The venture capital firm focuses on tech-related startups which include fintech as well. It has invested in fintech startups like ePayLater, Flexmoney, Mintoak, MyShubhLife, and more.
Titan Capital
Founder – Kunal Bahl and Rohit Bansal Founded – 2015 Investment Portfolio – LogiPe, Jupiter, Credgencies, Razorpay, Tinkerr, Astu Credit
Titan Capital – Fintech Investors in India
Titan Capital is a venture capital firm whose headquarters is situated in Gurugram. The most interesting thing is that the firm is founded by Kunal Bahl and Rohit Bansal who are the founders of Snapdeal. The firm focuses on funding seed-stage and pre-seed-stage startups. It was founded in the year 2015 and since then Titan Capital has participated in many funding deals related to different sectors of startups. Titan Capital has invested in fintech startups like LogiPe, Jupiter, Credgencies, Razorpay, Tinkerr, Astu Credit, and more.
For any kind of business, investment is necessary. Investors willingly provide businesses that they deem to be potential with the needed funds. Fintech startups are growing in numbers in India, and it seems like it’s just the start of the real game. Naturally, investors are also looking to invest in fintech startups as financial services have become an important need and the market is growing quite fast. With time, many other venture capital firms will also start investing generously in fintech startups.
FAQs
What is Fintech?
Financial technology is abbreviated to FinTech and it comprises companies that use technology to offer financial services.
How many fintech startups are there in India?
There are more than 2100 fintech startups in India as of 2022.
