Any founder / wannabe founder nominally reading the news on what is happening in the India technology startup ecosystem will know there is more money to take than ever or at least we have some major commitments.
BJP government always has the style and PR prowess to make a big deal of these announcements of making funding commitments. Only startup founders do not have a clear way to tap into these commitments, but still feel good about it. There are of course states backing up well. Here is the data first,
- INR 100 crore from Andra Pradesh government to set up a ‘fund of fund’ without directly investing in startups
- Of course there are those central government/bank funding commits like the INR 10000 crore startup fund announced in the budget, and the INR 5000 crore from RBI, INR 100 crore for village startups, some crores for Accelerator / Incubators.
With benefit of doubt to bureaucracy, I will still give another 6 months to get more clarity on
- Who is eligible with type of registration, domicile, etc?
- How much funding, under what terms? How will government retain rights to deploy, sell, control?
- What is the selection criteria and process?
- Which department will answer RTI (Right To Information) queries on any application, right now it is split across Agriculture, Youth affairs, Skill Development, DST, Finance and rural development. RBI has already come out with some procedure clarity on disbursal of funds and identified SIDBI + ICICI Banks to lead.
- Who all are now considered accelerator, incubators, we already have academia, TBI, STEPs in the mix, with enough foundations, associations, and corporate in the mix?
- Which portions of reporting, filing, compliance are relaxed or added just because it is a startup?
Without above, all such startup funding frenzy will only be vacant announcements. I see many parallels between the 1996–2000 IT frenzy and this one, which starts with locals hating IT guys, and later accepting the new reality with much irritation and actually getting their daughters married to them, so there is hope to startup founders😉.
Second, there is media frenzy with money, which I think stems from confusing and comparing personal savings/rich with resource needed to run a growing business. Seeing the next round of $1 B funding in flipkart, means founders are already multi billionaires, and this warped notion / headline means more views into an otherwise dead news.
Third government funding for startups does not mean ecosystem is thriving, especially when I constantly meet startups that are on the brink of collapse/wind down due to debts, talent, inability to achieve product-market fit and attract lead customers.
Wait before you jump to get your DIN and start a private limited getting biased by all this positive news, but keep experimenting with ideas/products that you think will stand on its own without any crutches from the government.
To me RTI app to 3 departments due in 6 months.