Government of India funding options available to tech start-ups

August 30, 2011

Vikram Bhat Entrepreneur Evangelism , , , Leave a comment

While angels and VCs come to mind first for companies seeking funding, lesser known are the number of government and government sponsored funds that are also available to tech start-ups. Read the Overview article to get an idea of the funding options available through the Government.

An overview of Government of India funding options available to tech start-ups

For a first-time entrepreneur in a technology play, funding is a crucial challenge that can make or break the fledging business.

While finding funding is crucial for all start-ups, technology companies need investors with special skills who can assess the inherent risks of a technology business. These risks could be those associated with a new cutting-edge technology or a radical business model. Either ways, a special class of investors is needed.

While angels and VCs come to mind first for companies seeking funding, lesser known are the number of government and government sponsored funds that are also available to tech start-ups. Close to 50 different schemes are available through government Ministries and Departments including Department of Scientific and Industrial Research, Ministry of Micro Small Medium Enterprises, Department of Bio-Technology and state-level organizations.

Types of funding available

Funds from these institutions can be obtained for diverse activities, including:

  • Creation of lab models
  • New product development/prototype creation
  • Product enhancement
  • Funding for participation in trade fairs and exhibitions
  • Funding for patenting of innovations

Government sponsored funds fall into multiple categories:

  • Technology development funds
  • Funds for patent protection
  • Technology in-licensing funds
  • Technology scale-up/validation funds
  • Market entry funds
  • Expansion Funds

Some of the funds are available specifically for projects in areas like biotechnology and renewable energy and are managed by their respective ministries. For example, the Small Business Innovation Research Initiative (SBIRI) scheme offered by the Ministry of Bio-technology offers soft loans upto Rs.10 crore as early stage funding for high-risk, innovative ideas/products for commercialization.

Funds that grow with you

Some of the government sponsored schemes are tailored to grow alongside funded companies – they offer phased funding that can be tapped at different times. One such fund is the Department of Scientific and Industrial Research (DSIR)’s Technopreneur Promotion Programme (TePP).

Scheme Funding Purpose
Micro Technopreneurship Support (TePP) Limit of INR 75,000 upto 90% of approved project cost Grant for creation of lab models/computer models
TePP Project Fund (TPF) Phase 1 Limit of  INR 15,00,000 upto 90% of project cost Grant for conversion of inventions into working prototypes
Phase II Supplementary TePP Fund (STF) Limit of 7,50,000 upto 90% of total project cost Grant for product value-addition, IP protection, design related work
Phase II Seamless Scale up Support for TePP projects (S3T) Limit of INR 45,00,000 upto 50% of project cost Grant for project enhancement, patent protection and limited production for test marketing

Incubator-related Funds

More than 30 different Technology Business Incubators (TBIs) have been set up in India, many of them over the past 3-4 years. There are incubators that focus specifically on one area – such as biotechnology or start-ups focusing on technology solutions for rural markets, but there are also many that have a wide mandate. For instance, the Indian Angel Network supports companies focusing on a wide range of areas – IT, ITES, Internet/Web, Telecom, Mobile VAS, Education Technologies, Healthcare Technologies, Retail Technologies, Cloud Computing and Cleantech.

The TBIs are spread across the state and most (including the one set up by the Indian Angel Network) have been set up by institutions in participation with the National Science & Technology Entrepreneurship Development Board (NSTEDB), which is part of the Department of Science and Technology. The NSTEDB has a structured programme for setting up TBIs in association with institutional partners.

TBIs set up under the NSTEDB programme typically offer services such as (individual offerings may vary):

  • Shared infrastructure, office space and common facilities
  • Training including short courses
  • Assistance on technology related IPR issues, legal and quality assurance services
  • Marketing assistance
  • Assistance in obtaining and clearances,
  • Assistance in preparation of business plans
  • Facilitation for participation in technology shows/ technology clinics/ trade fairs

In effect, there appears to be a wide range of funding options to explore within the government. Industry executives who have tapped these avenues point out that some of the programmes could be structured better so that the funded companies have greater flexibility in structuring the investment. But the single biggest challenge before some of the government-run institutions that offer the funding is the lack of in-house skills in assessing and structuring the investments. This could come in the way of meeting the government’s macro objective of creating an environment where start-up innovations thrive. With the basic groundwork of creating a country-wide institutional framework in place, it is time then to make this ‘infrastructure’ work better to service the industry for which it was created.

Useful Links

Digital Retail in India -Trends and Success Mantra

August 2, 2011

Vikram Bhat Digital Retail, Entrepreneur Evangelism , , , Leave a comment

In India Mumbaikars seem to prefer online shopping, these days; in spite of huge presence of popular road-side shopping centres the trend to shop online seems to be speeding up in Mumbai. A recent study conducted by the Associated Chambers of Commerce and Industry of India (ASSOCHAM) revealed that about 65 percent of Mumbai residents shop online. The online retail market, currently stands at Rs 2,000 crore and is growing at a steady annual rate of 35 percent. It claims that the online retail industry in India is likely to be worth Rs 7,000 crore by 2015.

Now that trend is well established!!! Question is? What are the success mantras? According Raju Moza Principal Consultant, Roch Consulting “It is imperative for the existing eCom ventures to deliver. If they fail to deliver what they envisaged, the bubble will burst; the quality of the deals in this sphere are appealing, some are meant to mislead, in some cases merchants treats Deal Holder second citizen customer, so and so fourth …So these bunch of sites can be enabler in eCommerce or DISABle the whole eco system…lets c which way the wind blows…”

My experience in this sphere as strategist and having enabled some of exciting ecommerce projects along with our team at eQNova – One can build better product, with great designs: powering it with high voltage promotion campaign!!! Spend millions on Display ads- get the traffic on the site and even convert the traffic into customs. Though it is imperative but not the success mantra!!!!

Success mantra is, “Second action after first buy!!!!!”

Is your customer going to write on complaint forums after first buy or becomes your fans on social media, write +ve tweets, even testimonials? Earlier decades bad reputation took years to spreads, today’s it is minutes away…   So success mantra means –

1. Quality of the product and that WOW factor associated with it is!!

2. After sales support!!!

Trust me- even in Digital era QUALITY and AFTER SALES SUPPORT should be in your central circle of Digital Retail Venture priorities.

We at eQNova have simply refused to work with builder wanting to venture in to ecommerce domain. He had plans to spend Cores of rupees on advertising on hoarding; ideas and money for land-lock marketing campaigns. But had no clues about the problem his service was intended to solve. It was quite simple of him, idea was working in US; he will plunge in, sell his company after some time and make big money. New projects are very important to us, and working with non- serious players in not our philosophy.

But having burnt our hands initially working with such non- serious customers, we had not difficulty in saying no to him and have adopted it as principal philosophy … No matter what money is on the table we will not work with non serious initiatives.   In fact, we are proud to work with SME sector focused entrepreneurs.  Recently we have chosen to work with the person who is the master of his trade currently struggling with finances but very honest with his ideas / intent and very passionate person. As eCommerce enabler company eQNova should have no problem in giving wings to his dreams.

In fact I consider that our litmus test of our ability, working on these types of challenges gives me great satisfaction. So part of the assignment is to improvised his concept and bring it to level and help him interact with VC’s using services of our ecosystem.

Let us see which way wind blows….

Lead Management

October 9, 2009

Vikram Bhat Entrepreneur Evangelism , Leave a comment

Entrepreneurs can learn to target “high probability” prospective clients instead of wasting time and money selling to the ones who won’t commit

The Art of Sales Communication

Too many entrepreneurs waste time and energy chasing sales prospects that have no potential. To increase your sales, you must learn to disqualify sales leads. Though it might seem like a skill better suited for your sales team, you, as an entrepreneur, should master it to get and stay financed.

Sales communication is different from advertising and marketing—it’s more personal. Too many salespeople make the mistake of spewing off hype-driven sales talk. But no one likes to feel manipulated, so this approach doesn’t work. Some sales people don’t even bother to explain the benefits of what they’re selling.

Key Points for Entrepreneurs

1. Be a shrink. We all bring our emotional baggage to every aspect of our lives. We all need to be loved and respected, and to trust others. In selling situations, many of these psychological buttons are pushed. Your sole job as a salesperson is to build rapport. Rapport leads to trust. Trust leads to lasting relationships and sales.

2. Set your objective for prospecting. Shifting your objective from getting the appointment to determining whether the prospect qualifies for an appointment is key. Next, you need to eliminate your fear of rejection. It’s easier to do this when you aren’t begging for sales meetings and you won’t be begging for meetings. Instead, you’ll identify your target prospects using specifics such as price-points, budgets, decision-making ability, and schedules. You’ll only make appointments with prospects who need, want, and can afford what you are selling and are willing to buy from you now if you meet their requirements. You’ll also learn to embrace the fact that disqualifying a prospect is just as valuable and important as qualifying one—whether you disqualify/qualify him or he disqualifies/qualifies himself.

3. Start separating real leads from unlikely ones. This type of prospecting is essentially a practice of sorting and identifying by talking to as many people as you can in the shortest amount of time. You’ll need to avoid the temptation of trying to create prospects—they simple cannot be created. This process involves learning how to disqualify a low-probability prospect and maintain control of the interaction. Remember, whoever asks the questions are in control.

Print out these reminders and tape them by your phone to help you when you call:

• I work with high probability prospects only. I disqualify everyone else.

• Pr • I don’t waste my resources on low-probability prospects.

• No is just as good as yes.

• A low-probability prospect is worse than no prospect at all. Remember the opportunity cost.

• I end the conversation if the prospect is unwilling to make a suitable commitment.

• When in doubt, I disqualify.

• I go into each call with no expectation of a result.

• True high-probability prospects will not allow themselves to be disqualified.

• You can call the same list over and over again and you will get a higher and higher percentage of prospects who say yes as long as you do the following:

Keep changing the offer.

Disqualify.

Don’t waste prospects’ time.

Don’t educate.

Stop spending precious months educating the prospect, who do buy in expectation of goods for free. Forget the concept of consultative selling. If they want consultations, they have to buy first.

4. Stay focused. Fear is what keeps most of us chasing sales leads that we know aren’t high probability. Here’s how to stay on track and further cement this learning into your sales process:

• You are training prospects when you disqualify them.

• Don’t make the same offer twice in a row—you’ll jeopardize your credibility.

• Deal with discomfort by acknowledging it and pushing through it anyway.

• Remind yourself this is the disqualification game.

• You have no power to make a high probability prospect. You do have the power to disqualify.

• Prospecting deserves 50% of your time. It is just as important as meeting in person.

• Twenty percent of the market doesn’t like its current supplier and would be receptive to switching.

5. Get to the decision maker when prospecting.

• Always try to get to the business owner or decision maker.

• When you cold-call the decision maker but get the gatekeeper, treat the person as if he or she is the decision maker.

• If the gatekeeper cannot answer your disqualifying questions, ask if he can put you in touch with someone who can, or bring the questions directly to the decision maker.

Remember prospecting is a disqualification process.

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