Over a week ago, the commerce ministry made an official announcement establishing a national advisory council for startups to provide more representation to the fledgling start-up ecosystem in policy making. Minister of railways and commerce, Mr. Piyush Goyal is set to lead the union. Although there has been no official notice from the commerce ministry confirming the names of members, the central government plans to nominate names, from founders and veterans to incubators and industry representatives. Non-officials will be allowed to serve in the advisory council for a period of two years.
How will it function?
The primary aim of the council is to ease the access to working capital for startups, incentivize domestic investors who channel their money into startups, mobilize foreign investment, enable the original promoters of startups to retain control of their operations, and give them easy access to markets across the globe. It also aims to spread the spirit of innovation and invention in students and citizens who are looking to start their own venture. Incubation support will be offered to budding entrepreneurs to transform their ideas into a valuable product, solution, or process, and enable the integration of innovation in industry.
According to unofficial sources, the move has been proposed with an aim to promote development in as many sectors as possible. This move comes in the wake of the regulatory changes introduced to reduce the time startups spend on tax compliance to less than an hour, swifter incorporation processes and increasing the access to domestic and global capital. Let us take a look at some of the strategic measures that will give players a leg up and make this proposal a success
- Help build a network – Connections with industry experts is the one thing that will help companies that haven’t taken off the most. Once the business takes flight, the helpers become allies, and pretty soon the start-up will be in a position to help other struggling startups. If the government can help set an ecosystem where entrepreneurs can make the right industry connections and keep in touch with them, it will help foster quality relationships that will help them build their business efficiently.
- Facilitate aligned funding support – Strategic investment is very important for startups. That means funding from a source with vertical focus, no matter what the industry or vertical is. With the help of such investors, startups can not only get the funding they need but also secure commercial contracts with ease. This gives them access to the kind of sales channel that will give them the market boost they need. Both investors and entrepreneurs stand to benefit from this arrangement.
- Help communicate their ideas – Some startups offer solutions to an existing problem while others build a strong solution that highlights a problem that has gone unaddressed. It is important to understand that no matter what your intentions are, it is a business at the end of the day. So, it is important to communicate the idea to potential investors and the public. If the council can help entrepreneurs develop a concise pitch and have the necessary documentation ready, it will more than boost their viability.
- Leverage public private partnerships – Using the talent pool in the start-up community to realise public goals is definitely something that will benefit both parties concerned. If the government can co-invest in startups along with third party investors, accelerators, and venture capitalists, and offer them contracts that are in alignment with their needs and goals, it is a win-win for all the stakeholders. Social entrepreneurship is just starting to emerge and a little boost from the centre will encourage more people to come up with innovative solutions for social problems.
There is no denying the fact that the government has a lot of power to pull all the stakeholders in the start-up ecosystem together. Singapore’s Smart nation initiative, for instance, has been successful in empowering startups to usher in digital innovation across all sectors of the economy. With diligent forethought and planning, there is no reason we cannot accomplish the same. The startup community will be more than looking forward to the ways in which the government plans to extend its support, and we are sure that the industry minds will help them achieve their vision and boost our economy.