1. ISBA 2012 SIXTH ISBA CONFERENCE 17-19 March 2012, Pune Funding Options for Building Successful Start-ups 18th March 2012 Department of Scientific & Industrial Research, Ministry of Science & Technology

2. Features of a Start-up Company • To be a start-up - • a company has to search for a repeatable and scalable business model; • it has to have one product / service selling to many people, rather than doing custom work for individual clients (as in consulting business); • it must build a prototype that gives one an idea of what their product / service will do. • Start-up must have a skeleton business plan, addressing the five fundamental questions: • what they're going to do? • why users need it? • how large the market is? • how they'll make money and who the competitors are? • why this company is going to excel despite competitors?

3. Stages in New Venture Creation or Building a Start-up Company • Problem identification & Technology Idea; • Idea validation stage, where the do-ability or proof of concept of the technology is studied; • Prototyping and demonstrating the technology at a lab scale; • Scaling up and Pilot Production; • Commercial production and marketing;

4. Funding Options

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8. Funding Options

9. Government Funding The government offers funding primarily for technology startups, from early-stage development to full-scale commercialization • Government funding can be categorized into: • Technology Development Funds: • TePP, SBIRI, SINE (IIT-B), CIIE (IIM-A), SIDBI Innovation & Incubation Centre (IIT-K), NSTEDB - TBIs • Funds for patent protection • NRDC, M/o MSME thru NMCC, DIT (Int’l Patent Protection in Electronics) • Funds for Technology In-licensing: • Incubator related seed funds • Technology scale-up/validation/de-risking funds: • NMITLI, TDDP • Market entry funds: • Network of Angel Investors, NIF-Micro-venture Innovation Fund, TIFAC-SIDBI (SRIJAN) • Expansion funds: • IVCA, SIDBI

10. Thank you

11. SIDBI • SIDBI promotes 'riskier' lending to MSMEs, such as: • Provision of credit guarantees up to Rs 1 crore - Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE). This is like insurance for lenders. • Creation of a credit rating agency for MSME - SME Rating Agency of India (SMERA). • Creation of an asset reconstruction company for MSMEs - India SME Asset Reconstruction Company (ISARC). • Creation of a VC firm that provides early-stage & second round financing for MSMEs with a track record of proven technology or business model and opportunities for growth and earnings - SIDBI Ventures. Moreover, SIDBI has contributed to the corpus of over 33 VC funds across India. • World Bank sponsored scheme - SME Financing and Development Project [SMEFDP]- to provide 'riskier' loans, averaging ~ Rs 55 lakh. • SIDBI Risk Capital Fund - a Rs 2000 crore fund that provides long term-risk capital to MSMEs, using structured, convertible and collateral-free debt

12. Advice normally given to Start-ups • Entrepreneur must do his homework and ask for the right amount from the right source at the right time, • If you're starting a startup you would do well to remember that – • Birds fly; fish swim; deals fall through! • Be prepared to accept failures! • Fear of failure normally prevents people from starting things, but once they publish some definite ambition, it switches directions and starts working in their favor.