<ul><li>The event will be attended by <keyword id="6358887" type="General" weightage="80" keywordseo="amitabh-kant" source="Orion">Amitabh Kant</keyword>, <keyword id="158171" type="General" weightage="80" keywordseo="aman-gupta" source="Orion">Aman Gupta</keyword>, Rajan Anandan and other speakers. </li><li>A report named Indian start-up Ecosystem: Road to Hyperscale TiE - BCG – Times Bridge Report, will be launched at the event. </li><li>Discussions will be held around topics like Path to Profitability, India G20 Presidency, Future of mobility, White Spaces Where India Can Win, Building for Bharat and more. </li></ul>The Delhi-NCR chapter of The Indus Entrepreneurs is organizing a startup conference <keyword id="6069165" type="General" weightage="80" keywordseo="tiecon-delhi" source="Orion">TiEcon Delhi</keyword> 2023 between March 17-18, 2023. This year’s theme ‘Navigating the New World’, is based on the challenges thrown up by the post-pandemic geopolitical scenario, marked by a serious economic downturn. Two reports will be launched at the event – ‘Indian start-up Ecosystem: Road to Hyperscale TiE-BCG–Times Bridge Report’ and ‘Creating 10x Women Founders - Women Entrepreneurship Report’. Geetika Dayal, executive director, TiE Delhi-NCR shares, “We are thrilled to be hosting our annual flagship conference, TiEcon Delhi 2023 themed, Navigating the New World. We have designed sessions, masterclasses and networking formats to equip entrepreneurs and startup founders with the tool kit and knowledge they need to thrive in an ever-changing landscape." TiEcon is a platform for knowledge sharing, networking, and mentorship for entrepreneurs globally. It offers a diverse lineup of speakers including feted founders, key stakeholders, sessions on engaging topics, networking opportunities and curated pitching initiatives. Some of the speakers at the conference include Amitabh Kant, G20 Sherpa, Government of India; Deep Kalra, founder &amp; chairman at MakeMyTrip; Aman Gupta, co-founder and CMO, boAt Lifestyle. It also has speakers like Aditya Ghosh, founder, Homage &amp; co-founder, AkasaAir; Shikhar Dhawan, Indian Cricketer; Alok Mittal, co-founder &amp; CEO at Indifi Tech; Apurva Chamaria, head startups &amp; VC at Google India; Prashant Tandon, co-founder &amp; CEO at TATA 1mg; Lathika Pai, country head, VC &amp; PE Partnerships at Microsoft. The list of speakers also includes Arvind Kumar, director general - STPI; <keyword id="1487014" type="General" weightage="80" keywordseo="suchi-mukherjee" source="Orion">Suchi Mukherjee</keyword>, founder &amp; CEO of LimeRoad; Arjun Vaidya, co-founder of V3 Ventures; Dr Apoorva Sharma, co-founder of Venture Catalysts &amp; 9Unicorns; Shridhar Rajgopalan, MD and lead, Accenture Song and Sustainability, Advanced Technology Centers, India, Accenture; <keyword id="164919" type="General" weightage="50" keywordseo="padmaja-ruparel" source="Orion">Padmaja Ruparel</keyword>, co-founder of IAN &amp; Founding Partner of IAN Fund; Rema Subramanian, co-founder &amp; managing partner at Ankur Capital; Vikram Gupta, founder and managing partner at IvyCap. The event will provide funding opportunities via the ‘TiE the Knot’ platform now in its twelfth season and specialized curated pitches. A set of awards will be presented to recognize exceptional startups like – Knights of Supply Chain award, 15th TiE Lumis Entrepreneurial Excellence Award and 9th TiE - Power2SME Spirit of Manufacturing Awards. "We are looking at very turbulent and very exciting times ahead. As entrepreneurs, we see immense opportunity in everything we are doing, and we see challenges, short-term and long-term, that we have to be ready for what to do, what not to do, how to decide, how to prioritize, how to survive, and then how do we thrive,” said Prashant Tandon, CEO &amp; Cofounder, Tata 1mg &amp; Co-chair, TiEcon Delhi 2023. Google, Sequoia and Microsoft are key partners at this year’s conference. Suchi Mukherjee, founder &amp; CEO, Limeroad &amp; co-chair, TiEcon Delhi 2023 said, “At TiEcon Delhi 2023 you will have ten hours of intense learning, authentic conversations where you can meet founders from across the country. It's a place where founders curate the agenda for other founders. It's a place where corridors are filled not just with pleasantries, but also with deep, authentic conversations about people's experiences. Where breakout rooms are filled with not just standees, but masterclasses of questions that founders often face day-to-day.”

Startup community to come together for TiEcon Delhi 2023 on 17-18 March

<img class="gwt-Image" src="/photo/57287418.cms" /> 
 <keyword id="6354742" type="COMPANY" weightage="20" keywordseo="Flipkart">Flipkart</keyword>, the poster child of the Indian startup ecosystem, was devalued for the seventh time in January 2017, by <keyword id="4205639" type="UNKNOWN" weightage="20" keywordseo="fidelity-partners">Fidelity Partners</keyword>. At a $5.56 billion valuation, Flipkart’s shares were valued at $52.13 in November 2016, down by 36.1 percent from $81.55 per share as of August 2016. The domino effect hit the cab aggregator <keyword id="6354720" type="PERSON" weightage="20" keywordseo="Ola">Ola</keyword> next with the US-based investment firm <keyword id="4205636" type="UNKNOWN" weightage="20" keywordseo="vanguard-world-fund">Vanguard World Fund</keyword> marking down Ola by over 40 percent. 
 According to their regulatory filing with the <keyword id="108474" type="ORGANIZATION" weightage="20" keywordseo="US-Securities-and-Exchange-Commission">US Securities and Exchange Commission</keyword>, the current valuation for Ola is now $3 billion, with its shares dropping from $311.27 per share in the previous quarter to $182.70 apiece. During their peak, Ola had raised $500 million at a valuation of $5 billion. 
 That’s not all. According to reports, e-commerce giant <keyword id="541988" type="COMPANY" weightage="20" keywordseo="SnapDeal">Snapdeal</keyword> is reportedly looking at raising funds at a lower valuation of $4 billion. At their last fundraising round, they raised $200 million at a valuation of $6.5 billion. 
 
Valuations are normally decided according to a company’s market share, its gross margins, and its rate of growth, among other factors, but is anyone talking about the elephant in the room? Does a number decide a company’s worth or does the mettle lie someplace else? 
 
What’s The Big Deal about Valuations? 
 
While Valuations and devaluations are part of the game, they are a mix of market environment, risk appetite, a fund manager’s biases, hot new trends, fear of missing out, the multiples comparable are commanding, and of course, expected cash flows and margins. 
In 2015, we lauded the entry of Flipkart, Ola and Snapdeal in the Unicorn club. The first quarter of 2015 saw over $1.7 billion funding in start-ups and all we hear now are downturns with reality hitting the magic creatures to the ground and forcing them to compete in a horse race for fund-raising. 
 
<a href="http://www.businessinsider.in/heres-how-uber-is-letting-you-earn-from-its-platform-uberdost/articleshow/57083396.cms">ALSO READ: Here's how Uber is letting you earn from its platform 'UberDost'</a> 
 
While there were muffled concerns of profitability and unit economics, the dynamics took a harder turn when in the middle of 2016 the world economic dynamics shifted. 
 
Suddenly, the pouring funding started slowing down, news of firing rounds, internal tiffs, and investor involvement began to cloud the startup skyline. 
 
Now the lauded valuations started to seem bloated and overhyped, and the cost-cutting started and it doesn’t seem to end. 
 
<img class="gwt-Image" src="/photo/57287426.cms" /> 
 
 
The secret is in the Business Model 
 <keyword id="824043" type="COMPANY" weightage="20" keywordseo="Business-Insider">Business Insider</keyword>, while digging deeper into factors ailing the startup ecosystem in India, realized that business models had to be one of the core ingredients to a startup’s success or failure. So, we got in touch with key players, notable investors and successful companies that had a say in the functions of the industry. 
 
What clearly emerged was that there were mainly three business models that most start-ups and unicorns, followed in India- 
 
1) Cut prices to gain industry share and chase profit later 
2) Set up person-to-person exchanges 
3) On-Demand Model 
 
Now we break down the models to see why Indian start-ups think they’d work and why they haven’t succeeded yet. 
 
Investors’ Point of View 
 <keyword id="262067" type="PERSON" weightage="20" keywordseo="Mahesh-Murthy">Mahesh Murthy</keyword>, Co-Partner, Seedfund, one of India’s most vocal investors told us what’s wrong with the Indian startup ecosystem,”The problem is that we are idolizing businesses that are not ‘New’. There is nothing elusive or different about the companies we look up to, they are just copycats.’’ 
 Seedfund, which is an early stage VC firm has invested in companies like Redbus.in, Chumbak, Carwale, and Voonik. “Real businesses need little or no marketing. The cost of acquiring a customer shouldn’t be higher than your investment in your product which is what is happening right now’’<keyword id="20148" type="PERSON" weightage="20" keywordseo="murthy">Murthy</keyword> comments on the viability of the business models of India’s best-known <keyword id="6362513" type="ORGANIZATION" weightage="20" keywordseo="Startups">startups</keyword>. 
 “Innovation for the sake of innovation is useless. Most consumers prefer the companies that are competitors to Flipkart, Snapdeal, and Ola and that speaks volumes. We are just looking for great service coupled with great value for money and <keyword id="18635" type="CITY" weightage="100" keywordseo="Amazon">Amazon</keyword> and Uber give us that while the other companies don’t hit the mark while getting celebrity endorsements with full-page ads.’’ 
 “Rule Number 1 of business: Never lose money. Rule Number 2: Don’t forget Rule Number 1,” said <keyword id="71133" type="PERSON" weightage="20" keywordseo="Warren-Buffet">Warren Buffet</keyword>, probably the most popular investor in the world. 
 <keyword id="542474" type="PERSON" weightage="20" keywordseo="Reid-Hoffman">Reid Hoffman</keyword> from <keyword id="28120" type="CITY" weightage="20" keywordseo="Linkedin">LinkedIn</keyword> and now a VC says that as a VC, you should be able to put your money into a startup and walk away from your investment and at the most, you are best placed to understand a sector if you have built a business in it or at the very least, worked in it. For Indian start-ups, we see the opposite happening with Flipkart who recently appointed <keyword id="6379357" type="UNKNOWN" weightage="20" keywordseo="Kalyan-Krishnamurthy">Kalyan Krishnamurthy</keyword> as CEO, who is an ex-employee at Flipkart’s key investor, Tiger Global. 
 
What is a business model? 
 
A business model explains which consumer pain a startup chooses to relieve, why your solution works better than competing ones and how big a wedge a company can drive between what customers are willing to pay and the costs. 
 
Breaking down the Business Models 
 
There are broadly the following business models at play when it comes to start-ups that hold the public eye in India: 
 
1. Cut prices to gain an industry share and chase profit later: Target a huge market and sell a product at the lowest price with fast delivery and great service. As the company grows, expand the product line, negotiate volume discounts with suppliers, invest in technology, customer response time and cut waste from the operations. Then deliver the lower costs to customers in the form of lower prices. 
 
This was Amazon’s model which is still one of the fastest growing companies in India and the world. Although it was founded back in 1994, Amazon didn’t actually make a profit until 2001. Amazon has some profitable projects, but the money made from them is typically used as investments to fund other Amazon businesses and ventures. The company invests its profits in new lines of businesses and uses them to expand. In short, Amazon seems to value growth over profits. 
 
 
<img class="gwt-Image" src="/photo/57287471.cms" /> 
​ <keyword id="8589" type="PERSON" weightage="20" keywordseo="padmaja">Padmaja</keyword> <keyword id="980938" type="PERSON" weightage="20" keywordseo="Ruparel">Ruparel</keyword>, President, Indian Angel Network doesn’t believe in this model simply because she thinks that Indian consumers are flighty, “There is a constant need to lure the consumer to stick with you which is tricky when you’re not the only player in the market. Your focus here is on how quickly you can grow the market and not on your business strategy.’’ Ruparel believes in investing in a much more stable business model, “We are old-fashioned for sure as our focus is on businesses building a top-line and a bottom-line. We ascertain a business by unit economics and even though the cycle might be slightly longer, B2B start-ups create a sustainable business.” 
 
“The consumer is surely attuned to buying online which was their aim, but only some players will remain in this market. Consolidation is inevitable as loss-making businesses can’t stay afloat for long, but only time will tell who will remain the top dogs here,’’says Padmaja when asked about the future for consumer-centric start-ups. 
 
India’s perspective: “E-commerce companies like Snapdeal and Flipkart are following a similar model to that of Amazon in India. The difference is that Amazon can afford to lose money in India as it is profitable in other markets. The former players are just playing in India where they’re losing money trying to compete with Amazon,” comments Mahesh Murthy. 
 
2. Set up person-to-person exchanges: A house owner in a town has a huge house that has idle rooms that aren’t occupied. The young professionals living in the city need accommodation in different towns to work flexibly but they don’t want to own a house or live in expensive hotels. It seems to be working for <keyword id="719382" type="COMPANY" weightage="20" keywordseo="Airbnb">Airbnb</keyword> which doesn’t own any inventory and millions of people have taken advantage of these services, and Airbnb now has a market value estimated at $30 billion—roughly the same size as the <keyword id="183920" type="CITY" weightage="20" keywordseo="Marriott-International">Marriott International</keyword> hotel chain. 
 
Vikram Gupta, CEO, IvyCap Ventures, “India is not a mature market where you can write off $100 million checks to companies that are spearheaded by college graduates or in some cases, dropouts. The entire ecosystem is disturbed as new companies were getting funding at overhyped valuations. The market has started to finally stabilize and we see investors going back to the revenue as a yardstick for company’s growth instead of the GMV. The businesses are coming back to realistic valuations and while they might have money left in the bank, they are looking to reduce their cash burn rate.” 
 
<img class="gwt-Image" src="/photo/57287472.cms" /> 
 
India’s perspective: Companies like <keyword id="2808667" type="UNKNOWN" weightage="20" keywordseo="OYO">OYO</keyword> are trying to work with small hotels and guesthouses and have even leased their own properties but the burn-rate is consistent. With simplifying its business model and focusing on one aspect; people sharing their homes with people and minimal revamping, Airbnb has revolutionized how the world sees hotel accommodation forever. 
 
3. On-Demand Model: Smartphones have driven transformational shifts in how we consume goods and services, and many consumers have become acclimated to purchasing at the press of a button. The on-demand model allows a startup to leverage new technology while utilizing existing infrastructures. Another benefit lies in the use of freelance labor with its obvious advantages in cost cutting. 
 
Uber is a great example of the sharing economy where they connect the supply to the demand of taxis without investing in their own fleet. 
 
India’s perspective: <keyword id="6362049" type="UNKNOWN" weightage="20" keywordseo="Ola-Cabs">Ola Cabs</keyword> is Uber’s biggest competitor in India and while both companies burn a lot of money trying to lure customers to get into a taxi, Uber is currently the world’s most valuable startup at $69 billion. 
 
<a href="http://www.businessinsider.in/online-cab-players-in-2016-completed-nearly-half-a-billion-rides-with-250-y-o-y-growth-in-india/articleshow/57273938.cms">ALSO READ: Online cab players in 2016 completed nearly half a billion rides with 250% y-o-y growth in India</a> 
 
Winner Speak 
 V. Krishnan, Co-founder, and Director of <keyword id="1675768" type="UNKNOWN" weightage="20" keywordseo="Justdial-Ltd">JustDial Ltd</keyword> who likes to call his company an ‘18-year old startup’ says that for a successful business you don’t need an extraordinary idea, “The problem with start-ups today is that they don’t focus on profitability. To create a profitable business, you need extraordinary execution, not an idea. Giving money to people to use your services doesn’t make sense. The Indian customers are not loyal to brands, but to offers. Our goal was to create a world-class business and a world-class company.’’ 
 
For the first ten years of JustDial’s existence, the company didn’t raise any funding. The company ran on a shoe-string budget and used its own money to survive. In 2006, when internet penetration and broadband gained traction in India, the company was ready with its fully functional website to complement its telecom services. From 2-3% internet users to now 85% internet users, the company has grown to 200 Cr web searches annually, without any cashback or incentives. The company is probably one of the rarely profitable internet companies in the country today. 
 
<a href="http://www.businessinsider.in/65-of-start-ups-feel-indian-startup-eco-system-may-be-in-a-tech-bubble-report/articleshow/57205211.cms">ALSO READ: 65% of start-ups feel Indian startup eco-system may be in a tech bubble: Report</a> 
 
“The core business of start-ups isn’t ready but there is marketing happening. India is going to be giving you a lot of opportunities. Everyone wants to create a company, raise a great valuation and sell it off to do something bigger; the attitude is wrong," he signs off. 
​ 
Business Insider got in touch with Flipkart, Ola, Snapdeal, and Uber for this story but the companies chose to not comment on the same. 
 
​<img class="gwt-Image" src="/photo/57287468.cms" /> 
 
Business Insider’s Take 
 
While popular Indian start-ups struggle to survive without additional funding coming in, we see some internet companies like JustDial and BookMyShow staying afloat, without investor-intervention. 
 
When it comes to businesses and business models, investors and successful companies agree that the tried and tested works; build a business with a strong product that you can alter as technology develops. The business of losing money can only take you so far if you don’t put it to good use. 
 
There’s a difference between investment into a product and burning money, and the start-ups better realize that before they get acquired or relinquished by the players who created the game that they’re set to lose. 
 
The market is big enough for companies that create value for customers not just for start-ups that create customers; the difference is everything. 
 
(Graphics: All figures in INR crores for the financial year 2015- 2016. Source: <a href="http://www.livemint.com/Companies/vtqiTC9VgJgnUfOAH2QdiL/Flipkart-still-Indias-top-startup.html">Mint Research</a>) 
 
**For Oyo, the result is from Apr-Dec 2015. 
*BookMyShow is the only company mentioned that has profits.

BI Investigation: Business models akin to Amazon and
Uber’s aren’t working for Indian startups

<keyword id="8589" type="PERSON" weightage="20" keywordseo="padmaja">Padmaja</keyword> <keyword id="980938" type="PERSON" weightage="20" keywordseo="Ruparel">Ruparel</keyword>, President, Indian <keyword id="620178" type="PERSON" weightage="20" keywordseo="Angel-Network">Angel Network</keyword> says that the idea of a pan-India angel community came to the founders in an informal meeting, “IAN was built over some spilled wine where we just decided to help people who were trying to be job creators instead of job seekers,” Ruparel told Business Insider. When Ruparel left the corporate life she was looking for her next passion unseeingly not realizing that it was staring her right in the face, “We’d get ten business plans from TiE every day and then fight for investing in one of them. We decided to pick out one or two business plans and each of us invested in those two rather than making a high risk investment in each, which is the genesis of angel investing,” relays Ruparel talking about how it all started. <div type="embedgroup"> <div type="Article" hostid="261" msid="58748819" title="Exclusive: Padmaja Ruparel, Indian Angel Network is Breaking Barriers, just like the Start-ups She Supports" rank="1.0" kind="RELATED" publishDate="May 19, 2017, 2:34 PM" mstype="2" mssubtype="0"></div></div>
 Adding Value Instead of Writing Cheques More investors joined in through different business networks and <keyword id="36015" type="ORGANIZATION" weightage="20" keywordseo="ian">IAN</keyword> never had to market itself. “Every entrepreneur who approaches us gets advice from us and that’s very important for the brand we’re trying to build,” says Ruparel who insists on being formal in their dealings and always meeting in office as she desists the ‘casual’ culture associated with start-up companies. She feels that it is insulting to the entrepreneur who is taking the highest risk of his life. <div type="embedgroup"> <div type="Article" hostid="261" msid="58627337" title="Exclusive: Know Vani Kola, one of India&amp;#39;s best known investors, like never before" rank="1.0" kind="RELATED" publishDate="May 12, 2017, 12:00 PM" mstype="2" mssubtype="0"></div></div>
 Creating Social Norms Ruparel says that social norms are what you believe in and if it works, you can sway opinion to your benefit. The rebel in her also resulted in her not having children because she felt that that was not a priority, and this is exactly how she deals in the office; by prioritizing what works for IAN. IAN, which is one of Asia’s largest angel networks has invested in companies like Druva, WowMomos!, Staqu etc. “The network has invested 125 crores last year and wants to invest another 500 years in the next four years, leveraging 1500 crores in the ecosystem,” says Padmaja whose vision is not just one fund. IAN recently closed its maiden fund at Rs 175 crore which has a target of Rs 350 crore aimed to make early-stage investments in 150-160 companies in the next four years. “We are now seeing that once early-stage companies that have raised half a million, next need funds in the $1-4 million range, which is a challenge. So, IAN came together to respond to this need to invest in <keyword id="6362513" type="ORGANIZATION" weightage="20" keywordseo="Startups">startups</keyword> so that they become stronger alongside mentoring and handholding. We are trying to help them raise anywhere between Rs 50 lakh and Rs 50 crore which will not only help them raise money faster but it is also quality investment that they receive,” she says about the pivotal fund. <div type="embedgroup"> <div type="Article" hostid="261" msid="58627612" title="Exclusive: Vani Kola, MD, Kalaari Capital talks about her big bets and consolidation in the e-commerce sector" rank="1.0" kind="RELATED" publishDate="May 12, 2017, 6:00 PM" mstype="2" mssubtype="0"></div></div>
 Entrepreneur vs. Salesman Padmaja believes that 75% of her investments are now about the startup team and not just the idea. “Entrepreneurs need to understand top-line and bottom-line before asking for investment. The startup founder needs to be a good salesman who is selling his belief to investors, his family, his team and eventually, the world,” Ruparel signs off, in style as perky 46-year old.

Exclusive: Padmaja Ruparel, President, IAN Says that Entrepreneurs are the Most Successful Salesmen

Born and bred in Kolkata, Padamja Ruparel, President, Indian <keyword id="620178" type="PERSON" weightage="100" keywordseo="Angel-Network">Angel Network</keyword> is one of the names associated with the rise of <keyword id="6357097" type="COMPANY" weightage="20" keywordseo="venture-capital">Venture Capital</keyword> funding and the startup ecosystem. Growing up around the Naxalite movement in the city of joy, Ruparel turned to a life of normalcy and spent her time studying chartered accountancy and MBA according to her parents’ wishes. “I come from a generation where a girl getting highly educated was an anomaly; my parents felt that I should stand on my two feet and study further, and not for the sake of getting a better suitor in the marriage market which was the norm,” says Ruparel who has been financially independent since age 16, told Business Insider. 

 

 

 <div type="embedgroup"> <div type="Article" hostid="261" msid="58530868" title="Exclusive: AdvantEdge Partner, Kunal Khattar on why Failure should be Celebrated in an Entrepreneur’s Risky Life" rank="1.0" kind="RELATED" publishDate="May 05, 2017, 6:00 PM" mstype="2" mssubtype="0"></div></div>






 A Jack of All Trades Ruparel prides herself on never depending on her family for financial help even when she was getting married at a “ripe age” of twenty six. Business sense came early to young Ruparel who had been involved in growing her family wealth since college days by getting involved in the real estate business which was growing phenomenally. Pushing boundaries while juggling multiple interests, Ruparel decided to get married and break out of a cocoon to start her own life path away from the societal bounds of Kolkata. Post marriage, she settled in Delhi, leaving behind the wealth she created to her family and decided to rebel against the cliché of a married woman by working full-time and starting over in the capital. 

 

 

 <div type="embedgroup"> <div type="Article" hostid="261" msid="58627337" title="Exclusive: Know Vani Kola, one of India&amp;#39;s best known investors, like never before" rank="1.0" kind="RELATED" publishDate="May 12, 2017, 12:00 PM" mstype="2" mssubtype="0"></div></div>






Entrepreneurship by Chance After a stellar career in the corporate sector, Ruparel entered the world of entrepreneurs by what she calls her destiny, “From setting up Tie (The <keyword id="651422" type="ORGANIZATION" weightage="20" keywordseo="Indus-Entrepreneurs">Indus Entrepreneurs</keyword>) in Delhi, to networking to create IVCA (<keyword id="99032" type="ORGANIZATION" weightage="20" keywordseo="Indian-Venture-Capital-Association">Indian Venture Capital Association</keyword>) while working in a corporate, later did I realize that I’m setting up the foundation to my career in the startup ecosystem,” says Ruparel who started her career in a startup and now start-ups emerging companies. Ruparel’s partnership with <keyword id="164917" type="PERSON" weightage="20" keywordseo="Saurabh-Srivastava">Saurabh Srivastava</keyword>, who is the other founder has been spanning over decades with both of them working at different ventures together. When Ruparel decided to quit the corporate rat-race in 2005, Saurabh convinced her to take on another project, which blossomed into the Indian Angel Network, also known as IAN. 

 

 

 <div type="embedgroup"> <div type="Article" hostid="261" msid="58627612" title="Exclusive: Vani Kola, MD, Kalaari Capital talks about her big bets and consolidation in the e-commerce sector" rank="1.0" kind="RELATED" publishDate="May 12, 2017, 6:00 PM" mstype="2" mssubtype="0"></div></div> Formally established in 2006, IAN now has close to 450 members across the world with investors from 10 countries, in seven locations, which includes cities in India and UK. The network is sector agnostic and has funded <keyword id="6362513" type="ORGANIZATION" weightage="20" keywordseo="Startups">startups</keyword> across 17 sectors in India, including education, e-commerce, healthcare and hospitality. The entrepreneurship story has started in the Indian subcontinent and with a strong network like IAN, the angels are surely set to soar with the start-ups.

Exclusive: Padmaja Ruparel, Indian Angel Network is Breaking Barriers, just like the Start-ups She Supports

<img class="gwt-Image" src="/photo/49323445.cms" style="width: 800px; height: 600px;" />India’s flourishing start-up culture implies people here are increasingly interested in starting their own venture. But most of them accept defeat even before starting one. “Where am I going to get the funds from?” – the thought plagues their minds and keeps them away from taking that giant leap. Leaving a stable, secure and smooth life in service to jump into a risky business affair is not an easy decision after all. Lack of funds, therefore, is the plight of every new kid on the block wanting to foray into the world of <keyword id="428085" type="UNKNOWN" weightage="100" keywordseo="start-ups">start-ups</keyword>, more so in India. 
 
With no social security like in the US, difficulty to get loans from banks until one has collateral and with venture capitalists not ready to invest less than Rs 7-8 million, where can Indian start-ups today raise money from? 
 
The answer is: Angel investors or angels as they are better known as. A group of angels invest nearly 2-3 crore in a start-up if they see potential and future proposition in their business plan. 
 But it’s not that simple is what we realized after talking to one of India’s first angels and now a key player in the entrepreneurial eco system, <keyword id="164919" type="PERSON" weightage="100" keywordseo="Padmaja-Ruparel">Padmaja Ruparel</keyword>. 
<img class="gwt-Image" src="/photo/49323455.cms" style="width: 800px; height: 600px;" /> 
 She is the first to have set up an angel network in India, which is now called the <keyword id="328347" type="ORGANIZATION" weightage="100" keywordseo="Indian-Angel-Network">Indian Angel Network</keyword>. It comprises over 350 investors including the who's who of successful entrepreneurs and dynamic CEOs from India and overseas who bet their money on start-ups. She claims of having invested in 20 start-ups out of which merely 2 have failed so far. Business Insider spoke to Padmaja to bring you five things angel investors look for in start-ups before parking their money in them. Here's what they are: 
 
MASS APPEAL OR NICHE? 
 An angel investor is more likely to invest in your company if you are a <keyword id="6357823" type="COMPANY" weightage="100" keywordseo="Big-Bazaar">Big Bazaar</keyword> than a <keyword id="667" type="PERSON" weightage="100" keywordseo="Ritu-Kumar">Ritu Kumar</keyword> sort of fashion label. That means companies catering to large and high growth market are what angel investors look at, because mass appeal equals to high returns. 
 
“We look at need value over aspiration value. So start-ups catering to the needs of large section of people would be our choice over those who are targeting a niche segment and are more of aspiration value to masses,” says Ruparel. 
 
INNOVATION 
 
Innovation attracts angel investors for sure – be it a product design innovation, improvement in a current product’s performance, in its delivery system or a complete new innovation in what you have for your target audience. It should be a crucial innovation that either solves your customer’s pain point, makes things easier for them or gives them a new experience altogether. 
 
“When mobile phones came, they corrected the reception quality of landline phones and also helped people in moving around easily while talking. It was not only improvement but also value addition for customers. Another example is companies today have outsourced several business processes to BPOs. These third party service providers have created that space for themselves. So, innovation either needs to be something different or a business done differently,” explains Ruparel. 
 
FOCUS ON SETTING UP BUSINESS OR RAISING MONEY? 
 
If you want to build and run a successful business, an angel investor is interested in you, however, it’s not if you simply aim to raise money from them. 
 
“Raising money should be one of the milestones in your journey to establishing a full-fledged business. Only then will investors, who are themselves at high-risk in investing in start-ups, come to you,” says Ruparel. 
 
IDENTITY, OBJECTIVE AND A CLEAR BUSINESS PLAN 
 
Get your basics clear if you seek angel investment. So before pitching, ask yourself “am I a product or a service, what is my differentiator in the market, who is my competition, who is my target audience, am I addressing a pain point of the target customers or am I adding value, what’s is my business proposition.” If you have clear-cut answers to these questions, you are in! 
 
TALENT 
 
A talented and passionate team to drive your start up and make it a success – this is one of the most crucial things you need to impress angels. Ruparel says 75 per cent of her evaluation is usually on the talent of the team and their ability to pull off the plan. 
 
“Start-ups don’t have a large team. The small pool of resource that they have needs to be a talented lot. It’s tricky because talent comes with money and start-ups don’t have the money. That’s a challenge but if you can work it out, you are good to go,” says Ruparel. 
 
“I’d personally prefer an A grade team with a B grade business idea than a B grade team with an A grade idea, because great ideas are only great when they are implemented well and you need a fantastic team to do that,” she concludes. 
 
(Image credits: BCCL)

No funds for your start-up? Here are 5 things you need to attract angel investors

<ul><li><keyword id="9835021" type="UNKNOWN" weightage="20" keywordseo="phool-co">Phool.co</keyword>, a biomaterial startup, has raised $1.4 million in a funding round led by IAN Fund and San Francisco based, Draper Richards Kaplan Foundation.</li><li>The startup works on a unique idea of turning <keyword id="9835020" type="UNKNOWN" weightage="20" keywordseo="wasted-flowers">wasted flowers</keyword> from temples into incense sticks through a ‘flower cycling technology’.</li><li>The startup had also launched ‘Fleather’ – a <keyword id="6400741" type="UNKNOWN" weightage="20" keywordseo="Vegan">vegan</keyword> alternative to leather.</li></ul>Phool.co, a biomaterial startup, has raised $1.4 million in a funding round led by IAN Fund and San Francisco based, Draper Richards Kaplan Foundation. The startup is also backed by <keyword id="108320" type="COMPANY" weightage="20" keywordseo="IIT-Kanpur">IIT Kanpur</keyword>, Social Alpha and others. The startup works on a unique idea of turning wasted flowers from temples into incense sticks through a ‘flower cycling technology’. The startup also set up a plant in the holy temple town of Tirupati in Andhra Pradesh in December 2019. Since then, the startup has gone on to launch several new products. One of the most interesting ones being – ‘Fleather’ – a leather alternative material. During the Indian festival of Holi, the startup also made news for its colours made out of flowers. “Through our efforts, we aim to build natural alternatives to synthetic chemical-based products by using deep-tech &amp; Research. We are perhaps India’s first natural incense brand taking a digital-first approach and have a first-mover advantage as bio-leathers are barely available in India. The funds raised will be used to advance the research and scale the operations of the company,” said Ankit Agarwal, Founder Phool.co. For the investors, it was the company’s circular economy model that made it unique. “Innovative solutions for the sustainable development of the community is the need of the hour. Phool.co‘s circular economy model brings triple bottom benefits of environmental, social, and financial sustainability,” said Padmaja Ruparel, founding partner of the IAN Fund. Earlier, the startup had raised ₹3.38 crore in a seed round. SEE ALSO: <a href="https://www.businessinsider.in/business/startups/news/ronnie-screwvala-investments-are-making-the-right-noise-from-edtech-to-e-commerce-and-media/articleshow/77783173.cms">Ronnie Screwvala’s investments range from edtech to e-commerce and media</a> <a href="https://www.businessinsider.in/business/startups/news/hike-brings-on-board-oyos-tech-honcho-to-lead-its-engineering/articleshow/77777836.cms">Hike brings on board OYO’s tech honcho to lead its engineering</a>

IIT-Kanpur backed startup that turns wasted temple flowers into incense sticks, vegan leather raises more funds

<ul><li><keyword id="328347" type="ORGANIZATION" weightage="20" keywordseo="Indian-Angel-Network">Indian Angel Network</keyword> has closed its fundraising for the <keyword id="6129174" type="UNKNOWN" weightage="20" keywordseo="IAN-Fund">IAN Fund</keyword> after raising at ₹375 crore.</li><li>The fund over exceeded its target by ₹25 crore. </li><li>It currently has 34 companies in its portfolio, including the recently turned unicorn startup Druva.</li></ul>Seed and early stage investment platform Indian Angel Network closed its capital raising activity for the IAN Fund as it overshot its target by ₹25 crore. The fund raised ₹375 crore in all. “The fact that we have achieved and exceeded our capital target underlines our impressive growth trajectory and highlights the faith that investors have in our vision. Moving ahead, we aim to scale newer heights and play a bigger role in transforming and nurturing India’s entrepreneurial landscape,” said Padmaja Ruparel, founding Partner of the IAN Fund. Some of the fund’s participants include Institutional investors like SIDBI’s Fund of Funds for <keyword id="6362513" type="UNKNOWN" weightage="20" keywordseo="startups">Startups</keyword>, IIFL, Wadhwani Foundation, Yes Bank, Max Group, Gray Matters Capital, and Hyundai. Individual investors like Kris Gopalakrishnan, Sunil Munjal, Rajan Anandan, Kanwal Rekhi too invested in the fund. IAN fund was founded in 2017 and since then it has been an active angel investor. It has 34 companies in its portfolio, including Druva which recently turned a unicorn. The other startups it funded includes the QSR chain Wow Momo, wedding platform WedMeGood. The sector agnostic fund primarily invest in AI and machine learning, augmented and virtual reality, biotech, cleantech, fintech, agritech and healthtech.

Indian Angel Network closes its fund after raising ₹375 crores

Finance Minister <keyword id="129243" type="PERSON" weightage="20" keywordseo="Nirmala-Sitharaman">Nirmala Sitharaman</keyword> called startups the ‘strength of India’ as she pushed “job seekers” to turn “job creators”. In a big move, employees at startups who have stock options will be exempt from tax if they leave the company or sell their shares in the first five years. She proposed the tax relief given to startups. Earlier, a startup with turnover up to ₹25 crores was allowed 100% tax deduction on profits for seven years. The budget also proposed to expand it on two counts that can include older startups and those which are larger too. Here are some top reactions: Neelesh Talathi, CFO, Pepperfry 
 
 <div type="image" title="Neelesh Talathi, CFO Pepperfry" msid="73843354" hostid="261" caption="&amp;lt;p&amp;gt;Neelesh Talathi, CFO Pepperfry&amp;lt;br&amp;gt;&amp;lt;/p&amp;gt;"></div>





 “The Finance Minister has been empathetic about no tax harassment, resolving litigations. Resolving credit issues, app-based working capital solutions and more strategic aspects like National Logistic Policy are all initiatives that address core issues of our MSME sector.” “While these efforts will help boost the economy, it is imperative to arrest slippage in the Fiscal Deficit. To augur investment in our economy an aggressive disinvestment agenda, reforms including that of the government machinery etc. would have been welcome." <keyword id="258109" type="PERSON" weightage="20" keywordseo="Mayank-Kumar">Mayank Kumar</keyword>, Co-founder and MD of upGrad 
	
 
 <div type="image" title="Mayank Kumar" msid="73843449" hostid="261" caption="&amp;lt;p&amp;gt;&amp;lt;strong&amp;gt;Mayank Kumar, Co-founder and MD of upGrad&amp;lt;/strong&amp;gt;&amp;lt;br&amp;gt;&amp;lt;/p&amp;gt;"></div>





 We at upGrad believe that upskilling is the critical route to steer India towards becoming a $5 trillion economy. But I would have been happier if the Government had taken steps to encourage investment in reskilling among professionals by allowing them a tax-break privilege under Section 80C from the Income Tax Act, 1961, like that of Mutual Funds or Life Insurance." Kunal Bahl, CEO &amp; Co-founder, <keyword id="541988" type="COMPANY" weightage="20" keywordseo="SnapDeal">Snapdeal</keyword> 
	
 
 <div type="image" title="kunal snapdeal" msid="73843509" hostid="261" caption="&amp;lt;p&amp;gt;Kunal Bahl, CEO &amp;amp;amp; Co-founder, Snapdeal&amp;lt;/p&amp;gt;"></div>





 “We are thankful for accepting the start-up sector's request for ESOP taxation reforms. Also, the higher time &amp; turnover limits for carry forward of losses for start-ups will enable them to optimize growth decisions in formative years." Overall, <keyword id="7836802" type="UNKNOWN" weightage="20" keywordseo="Budget-2020">Budget 2020</keyword> is a thoughtful weaving together of specific proposals to tackle varied issues. Measures to improve access to finance for MSMEs and reduced taxation for the middle-income segment are welcome steps. Boosting physical infrastructure, expanding digital connectivity and growing use of technology in government functioning are important building blocks for the long-term growth of the Indian economy." Vivek Goyal, Co-Founder, PlayShifu 
	
 
 <div type="image" title="play" msid="73843683" hostid="261" caption="&amp;lt;p&amp;gt;Vivek Goyal, PlayShifu&amp;lt;/p&amp;gt;"></div>





 "One of the core reasons behind a successful startup is the ability to hire from a very talented pool and to keep them motivated during the long and hard journey of scaling. This is the reason why startups from hubs like Silicon Valley grow up to become world-renowned and add value to society at large. The tax deferment on ESOPs will prove to be one of the significant factors and levers in motivating growth-enabling employees, a great step in helping startups in India to scale by hiring and retaining them! Reforms like these give more power to the Indian startup hub to make a mark on a global scale and contribute towards India's $5 Trillion vision by 2025." Raghav Gupta, Managing Director, India and APAC, Coursera 
	
 
 <div type="image" title="coursera" msid="73843748" hostid="261" caption="&amp;lt;p&amp;gt;Raghav Gupta, Managing Director, India and APAC, Coursera&amp;lt;/p&amp;gt;"></div>





 “It is a progressive budget that acknowledges the role technology can play in addressing challenges and improving access to quality higher education and employment opportunities for India's youth. Government's announcements related to the development of emerging technologies like AI, ML, Data Analytics ecosystem in the country and skilling opportunities for the youth, clearly reflect the focus on preparing the youth for jobs of tomorrow." <keyword id="36872" type="PERSON" weightage="20" keywordseo="Vamsi-Krishna">Vamsi Krishna</keyword>, CEO &amp; Co-founder, Vedantu 
	
 
 <div type="image" title="Vamsi Krishna, CEO and Co-founder of Vedantu" msid="73843907" hostid="261" caption="&amp;lt;p&amp;gt;Vamsi Krishna, CEO &amp;amp;amp; Co-founder, Vedantu&amp;lt;/p&amp;gt;"></div>





 “The vision of making education accessible to the farthest corner of the country will greatly benefit students. The allocation of budget to hone the skill sets of teachers and educators will positively impact quality learning and thereby provide a boost to the education sector. Additionally the allocation of budget to BharatNet will also have a deep impact on skilling rural India as it has the potential to open up online learning to students and professionals from remote villages. With better bandwidth internet, a qualified teacher located in a metro city can impart LIVE online classes to students in small town India, where there’s a dearth of quality education. Technology will soon disrupt the entire concept of the classroom and make it an extremely personalized, one to one teaching-learning experience tailored for each mind.” Ola Mobility Institute “The clean-air fund of Rs 4,400 crores to be provided in the form of incentives to be notified by MoEFCC should consider measures to link the incentives to the electrification of vehicles and associated infrastructure such as battery-swapping and charging." Padmaja Ruparel, Founding Partner, IAN Fund “The budget 2020 represents a big win for the country’s startup ecosystem. The Government has paid heed to our concerns and rolled out reforms like a 5 year tax holiday for ESOP. This positive sentiment is evident in the Government’s drive to roll out “no tax harassment” policies along with the establishment of the investment clearance cell for assisting entrepreneurs in India." See also: <a href="https://www.businessinsider.in/budget/news/startup-esops-to-be-non-taxable-for-five-years/articleshow/73824551.cms">Good news for startup employees - your ESOPs won’t be taxed for five years</a> <a href="https://www.businessinsider.in/budget/news/ikea-furniture-and-jimmy-choo-shoes-will-get-costlier-after-budget-2020/articleshow/73841697.cms?src=hp_latest">IKEA furniture and Jimmy Choo shoes will get costlier after budget 2020</a> <a href="https://www.businessinsider.in/budget/news/new-education-schemes-reforms-policies-in-budget-2020/articleshow/73836166.cms?src=hp_latest">Budget 2020: Indian education sector will now get students and funds from foreign lands</a>

This is how top startup founders reacted to budget 2020

<img class="gwt-Image" src="/photo/50357095.cms" style="width: 800px; height: 600px;" />Exiting a year where startups spread wings across various sectors ranging from e-commerce, hospitality to technology, the next year may see unexplored social impact sectors like healthcare and <keyword id="6355445" type="COMPANY" weightage="20" keywordseo="Education">education</keyword> become the preferred choice for budding entrepreneurs. Moreover, investors feel, much of the groundwork has been laid in 2015 for 2016 to become a watershed year for the emergence of a really strong <keyword id="138263" type="UNKNOWN" weightage="20" keywordseo="startup">startup</keyword> ecosystem in India. 
 
“We will have not only fresh entrepreneurs, but new innovation propositions in sectors like healthcare. Fintech startups is going to be very much part of the flavour. I also feel Agritech will start opening up which will bring valuable and high money into sectors that are extremely critical for India’s economy growth and development,” says Padmaja Ruparel, founder of Indian Angel Network. 
 Echoing her opinion, Saurabh Srivastava, co-founder at IAN and Nasscomm, says: “I see a lot of entrepreneurs creating solutions for what you would call the bottom half of the pyramid. In India, such ideas can also be economically very scalable because of the high poverty levels and the underlying opportunity there. Although we see <keyword id="107737" type="ORGANIZATION" weightage="20" keywordseo="Entrepreneurship">entrepreneurship</keyword> in many sectors, I think we will see lots happening in the social impact arena, medical devices that government has its focus on etc.” 
 Also, as the member of <keyword id="35210" type="ORGANIZATION" weightage="20" keywordseo="sebi">SEBI</keyword> panel on startups and Indian Aspiration Fund, Saurabh tells us the keen interest with which government bodies are working for creating a favorable ecosystem for Indian entrepreneurs. “A big focus area in SEBI committee is on how do we accelerate the flow of capital to startups, how more domestic capital should flow into startups. SEBI, Niti Aayog and several other wings are working on such areas and there is an amazing degree of openness and wish to support,” he says. 
 
Meanwhile, it seems the angel investor community is also expanding in India along with the rise of startup culture. Padmaja says: “Investment is like marriage for angel investors. They invest but what they look for is a divorce and hefty alimony. I think this cycle has started happening at Indian Angel Network (IAN), where people are getting cash exits and returns. I look at this as maturing of the angel ecosystem and I only see this growing in the coming year.” 
 
“Moreover, entrepreneurs today are also looking for fundings. The moment they get it, they will startup. It’s a symbiotic relationship between the two,” she adds.

It's no more Tech! Here's what will be the preferred choice for startups in 2016

<img class="gwt-Image" src="/photo/50356832.cms" style="width: 800px; height: 600px;" />2015 was the year that saw the <a href="http://www.businessinsider.in/searchresult.cms?query=startup">startup industry </a>in India come off age. While on the one hand, there were brave individuals starting up on their own, the year saw companies like Ola, <a href="http://www.businessinsider.in/searchresult.cms?query=Snapdeal">Snapdeal</a>, Quikr, <keyword id="830092" type="COMPANY" weightage="20" keywordseo="Zomato">Zomato</keyword> and Paytm crossing the $1 billion in valuation to join the Unicorn club on the other. The rise of startups also led the angel investment community to take more risks than before. However, most importantly, all along India witnessed a Prime Minister who went the extra mile in encouraging the startup community by announcing several government measures -‘Startup India, Standup India’ being the latest one – while also showing the world the power of entrepreneurs back home. 
 
<a href="http://www.businessinsider.in/No-funds-for-your-start-up-Here-are-5-things-you-need-to-attract-angel-investors/articleshow/49323077.cms">ALSO READ: No funds for your start-up? Here are 5 things you need to attract angel investors</a> 
 
As the spectacular year draws to a close, imminent investors take us through the significant changes which both the startup as well as <a href="http://www.businessinsider.in/searchresult.cms?query=investor+">investor </a>community witnessed in 2015. Read on: 
 
STARTUP ECOSYSTEM BUILDING IN INDIA 
 “2015 has been a watershed year because there has been huge growth in the quality of startups that have come in,” says Saurabh Srivastava, cofounder of the Indian Angel Network and Nasscom. Happy to see an ecosystem building, he says: The government is beginning to encourage startups like never before as they also believe that startups can build wealth and employment. Moreover, people are seeing so many other successful ones with innovative ideas which are making good amount of money, solving ground problems and attracting global interest that they feel encouraged to do startups themselves. Also, there is huge interest among <keyword id="6365770" type="UNKNOWN" weightage="20" keywordseo="angel-investors">angel investors</keyword> to come in, invest and take more risks.” 
 
ANGEL INVESTMENT BECOMING AN ASSET CLASS: 
 
Mrs Padmaja Ruparel talks about the growth of angel investing community in India and how it has become an asset class. 
 
“It really is a class where first generation entrepreneurs like Saurabh, Narayanan Murthy and the likes – all middle class entrepreneurs who created garage to IPO kind of companies - have had a passion for entrepreneurship and have wanted to remain engaged in new innovations. They do this today by not only investing in young startups, but by mentoring and providing market access through their global network. This asset class has now moved beyond entrepreneurs. So, we are seeing lot of professional class investing and lot of second generation business house people also investing.” 
 
“On the other side, I feel starting up will become a career option soon. We are seeing entrepreneurs’ freshly out of college increasingly doing startups. One of our companies Mukunda Foods making tabletop dosa making machines, have youngsters who came out of college, created a prototype and are now delivering across nearly 9 countries. This is not to say that others aren’t. It’s also true that several experienced professionals are also building startups,” she says. 
 
SHIFT IN TRADITIONAL MINDSET AND APPROACH OF INVESTORS 
 Saurabh, who has nearly two decades of experience in <keyword id="6357455" type="EVENT" weightage="20" keywordseo="Funding">funding</keyword> startups, admits there has been massive change in the way investors look at startups today. 
 
“Investors are willing to put their money in more and more startups these days. 15-20 years ago investments were made only in IT companies, particularly those which had global appeal because growth came from overseas market. Today, India itself is a big market and we now see high quality entrepreneurs across variety of sectors – healthcare, IT, education, semi-conductors, hospitality, medical devices, ecommerce etc. A big shift in the investor approach has been to take the risk of investing in companies which target only the domestic market. Some of our best successes at IAN have come from companies catering to the Indian market,” he says. 
 
GEOGRAPHY NO MORE LIMITING FACTOR, INVESTMENT HAPPENING OVERSEAS 
 
Meanwhile, Padmaja feels opportunities lay galore for startups everywhere in the world when it comes to raising funds. Why? She explains: 
 
“IAN has set up its angel investment office outside the country. We are not only seeing entrepreneurs there, but actively investing too. The reverse is true as a lot of overseas investors are investing with us in companies that we are bringing the opportunities from. Geography is thus not a limiting factor anymore and that’s where we are able to make IAN a global platform where people from around the world can invest and get good returns,” says Padmaja. 
 
INDIA IS BEGINNING TO ACCEPT FAILURES 
 
Both Saurabh and Padmaja are of the opinion that failing does not minimalize chances of getting money from investors as there is increasing social acceptance for failures in India unlike before. 
 
“I think the concept of accepting failure was not there in India, but it is starting to get accepted. You try your best but it may not have worked for various reasons. I feel people who have not succeeded can be very good entrepreneurs because they have learnt from mistakes and have the hunger to succeed,” says Padmaja. 
 
Saurabh joins in to conclude: “When somebody has tried failed and wants to do it again, it shows character. It shows passion and commitment. An entrepreneur doesn’t always fail due to incompetence, there could be several other reasons say their partners let them down. They want to come back again and show the world what they can do. There has to be social acceptance for them and it is happening within the investor community gradually.” 
 
(Image credit: Thinkstock)

Why 2015 was the year of Indian Startups, tell us imminent investors

<img class="gwt-Image" src="/photo/51237891.cms" style="width: 800px; height: 600px;" /> Even as the overall mood is upbeat after the Budget, there’s something that has left both the <keyword id="6362513" type="ORGANIZATION" weightage="20" keywordseo="Startups">startups</keyword> and angels in the country feeling irked. Both have different reasons for their worries. 

	The Angel community, although happy to see startups get 100% exemption for 3 years on profits, feels the Budget should also have ended the unfavorable treatment in investments made in unlisted companies by Alternative Investment Funds and Angel Groups.
 Currently, <keyword id="6365770" type="UNKNOWN" weightage="20" keywordseo="angel-investors">angel investors</keyword> pay a much higher tax on capital gains while taking a far higher risk as compared to publicly traded shares. Investments in unlisted companies or startups is taxed at 33% for short term and at 20 per cent for long term capital gains, with the holding period for long term capital gains as 3 years. In this Budget, the government has lowered the period from 3 to 2 years. Still, investors feel this anomaly can make the sector look unattractive at a time when investing in startups is already considered a risky bet. “We would have benefitted if capital gains tax regime for unlisted companies was aligned with that for listed companies. This would end the discrimination against domestic venture capital funds as foreign funds anyway pay no capital gains tax by investing from Mauritius and other treaty friendly countries,” said <keyword id="164917" type="PERSON" weightage="20" keywordseo="Saurabh-Srivastava">Saurabh Srivastava</keyword>, a serial entrepreneur, angel investor and VC. Another angel investor Padmaja Ruparel said: “Capital gains Tax exemption in regulated/ notified fund of funds, lowering the period from 3 years to 2 years for Long term Capital Gains in unlisted companies, <keyword id="3269156" type="UNKNOWN" weightage="20" keywordseo="SETU-fund">SETU fund</keyword> of Rs. 1000 cr, one day registration process for start-ups will all help to boost innovation and incubation. But, we had hoped that treating investments by AIFs and angel groups in unlisted companies would be aligned with the public market equity tax regime.” 

	Meanwhile. Startups were expecting more radical reforms in the Budget. “We welcome the the three-year tax holiday, but the fact that the Budget has retained MAT negates much of the advantages, as we have cash-flow problems in initial years," said Ravi Gururaj, chairman of Nascomm Product Council.

What’s this one thing startups and angels are complaining about after Mr Jaitley’s Budget?

<img class="gwt-Image" src="/photo/50947949.cms" style="width: 800px; height: 600px;" />With D-Day approaching fast, the <a href="http://www.businessinsider.in/searchresult.cms?query=startup+industry">startup industry</a> is eagerly speculating how well the Narendra-Modi led government will adopt and accommodate start-up friendly policies and initiatives in the upcoming Budget. 
 
<a href="http://www.businessinsider.in/Mr-Arun-Jaitley-heres-what-the-startup-industry-is-expecting-from-Budget-2016/articleshow/50685322.cms">A lot of expectations are riding on Arun Jaitley’s back</a>. As he inches closer to February 29, here are crucial recommendations of the Indian Angel Network, country's oldest and largest angel investor group, to the “pro-business” government before the Finance Minister finally unveils their startup plan. 
 
“We hope this budget would end one anomaly - treating unfavourably investments by AIFs and Angel Groups in unlisted companies. Currently investors of such companies pay a much higher tax on capital gains while taking a far higher risk as compared to publicly traded shares. We do expect that capital gains tax for AIF funds and angel group investors will be aligned to the current tax regime for investments made in listed shares,” says <a href="http://www.businessinsider.in/No-funds-for-your-start-up-Here-are-5-things-you-need-to-attract-angel-investors/articleshow/49323077.cms">Mrs Padmaja Ruparel, President, Indian Angel Network</a>. 
 
Meanwhile, <a href="http://www.businessinsider.in/Why-2015-was-the-year-of-Indian-Startups-tell-us-imminent-investors/articleshow/50355873.cms">Mr Saurabh Srivastava</a>, who is the past chairman of <keyword id="6372077" type="CITY" weightage="20" keywordseo="Nasscom">NASSCOM</keyword>, and is currently on the executive committee of <keyword id="6355001" type="CITY" weightage="20" keywordseo="FICCI">FICCI</keyword> and the co-founder of Indian Angel Network, shared with Business Insider detailed recommendations for Finance Minister <keyword id="42575" type="PERSON" weightage="20" keywordseo="Arun-Jaitley">Arun Jaitley</keyword> ahead of the D-Day. 
 He says: “The Startup India announcement was a great start. We are hoping that the budget would introduce the necessary measures to take it forward like <keyword id="6354751" type="COMPANY" weightage="20" keywordseo="Income-Tax">Income Tax</keyword> Exemption for Start ups, Process of defining and identifying start ups, Establishment of the Credit Guarantee Fund, Waiver of compliances/ Self Certification and Creation of the Rs 10,000 Cr provision for Funds of Funds activity.” 
 
He also said: “We also hope that the government would end one anomaly and that is of treating unfavourably investments by AIFs and Angel Groups in unlisted companies.” 
 
“Today, capital gains tax on investments in publicly listed companies are treated as long term capital gains and taxed at 0% if held for over one year and as short term if held for less than a year and taxed at 15%( plus STT in both cases). But investments in unlisted companies or start ups is taxed at 33% for short term and at 20% for long term capital gains, with the holding period for long term capital gains as 3 years,” explains Mr Srivastava. 
 
“These investments in unlisted companies take more risks, are illiquid and create new ventures. They should be treated more favourably or at least on par with trading shares on the stock exchange. 
This should be allowed at least for investments made by SEBI registered, widely held AIF Category 1 and Angel Funds. The AIFs can collect STT like stock exchanges on such transactions,” he adds. 
 Highlighting the advantages of this, Mr Srivastava says, “this will end the discrimination against domestic <keyword id="6357097" type="COMPANY" weightage="20" keywordseo="venture-capital">venture capital</keyword> funds ( AIFs) as foreign funds anyway pay no capital gains tax by investing from Mauritius and other treaty friendly countries. This will also nudge foreign funds to register with SEBI.”

You Searched For "padmaja ruparel" and got 12 results

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IIT-Kanpur backed startup that turns wasted temple flowers into incense sticks, vegan leather raises more funds

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