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10 Benefits of Investing in Startups in India

Benefits-of-investing-in-startups

The term startup has many meanings when described in the Indian context. The word startup has become a synonym to growth, entrepreneurial traits, vision and futuristic approach. Startups in India must not be confused with small business, as the biggest difference being is INNOVATION. India and countries like India need such practical and innovative steps to counter the gaps in development. This can be done by finding investors who are investing in startups (startup funding). Take a look at this article to know about the benefits of investment in a startup business.

As per our Prime Minister of India, Narendra Modi states that Startup India is an innovative plan that is set out to assist the budding entrepreneurs to establish their own business. The government believes that these entrepreneurs have the potential and ability to grow and flourish. He hopes for a positive result from this plan which will contribute to a better economy.

WHY INVEST IN STARTUPS IN INDIA?

Investing in a startup can be a major decision since these companies or innovations are not yet born. They are still in the process of transformation and fostering themselves. Therefore, no one can predict whether the innovation will be a bang or lose. But, for the economic, entrepreneurial, innovative growth of the country giving them a chance to stand out is important.

People who invest in startups for the purpose of profit are of different levels. There are investors who are willing to take the highest risk; that is when the startup is just an idea and it has no physical existence. They are popularly known as ANGEL INVESTORS; these people provide seed capital for the idea to grow.

Secondly, there are HIGH NETWORTH INDIVIDUALS, ANCHOR INVESTORS, and BRIDGE INVESTORS. These individuals invest later when the seed planted and starts to grow. Here, they bid on companies who possess the potential to grow in a harsh corporate environment. As a result, these startup investments carry fewer risks of going down the drain.

ARE THERE ANY BENEFITS OF INVESTING IN STARTUP IDEA?

Startups are the future of our economy; they are eventually going to represent India’s corporate sector. Benefits of investments in startups may not yield great returns in short-run. However, if startups have proper capital requirements and management, they can achieve more than expected.

BENEFITS OF INVESTING IN STARTUPS:

 Benefits Of Investing Early

Startup funding has various stages. The investors will have better leverage in controlling the system of the startup. Capitalists can gain many benefits of investment by investing in a startup. In return for their investment, they get ownership in the company. By just providing initial capital and management services, the harvest will be outstanding. The startups in India are growing at a very rapid pace and investing individually or collectively can be of more benefit. There are over 14600 new startups in India and the chances of them being successful are relatively higher because of their innovative nature.

 Good Business Opportunities

Investing in services due to an increase in startups are in more demand. Since they require loans, management services, legal services etc business for providing loans can be a good opportunity to grow on a large-scale level.

 Government Policies

The Indian government is playing a huge role in providing benefits to those who provide services to new startups. In a recent survey, it was discovered that together with loan companies the government of India has committed a startup funding of 1611.1 crores to venture capital companies.

 Working With The Government

In the recent survey released by startup India official website, a hedge fund of over 13000 crores has been released to startups since its incubation in the year 2016. Private investors are collaborating with the government in order to raise funds. And, in turn, the government is ready to provide with benefits and exemptions to such companies.

 Introduction Of New Sections In The Income Tax Act

New sections pertaining to exemptions and benefits and rebates have been added to the act to boost startup as well as funding. Henceforth, new norms such as exemptions from capitals gains have to introduce to compel more investment.

 Various Benefits Of Investments

Investors are being provided with various exemptions and rebates related to the filing of return. By providing 100% tax exemptions on profits generated by the startup for three years can mean a hefty return on investment for investors for three years. Along with various other benefits of investments in startups in India.

 Infrastructure Services

The incubation centre for startups is providing infrastructure facilities to new companies. This is done with an intention to focus on the upcoming ideas and giving out good outputs by the startups. Various committees formed are formulating new policies to boost investors confidence in the capitalisation of a startup.

 Expansion Of Venture Capital Investors

Investing in innovative idea can certainly have a huge positive impact on the face of investors. Recognition, as well as fame, is sure when investors back a startup. It shows that an investor is working towards the development of the economy. He does that with the purpose to make more companies interested in business with investors.

 Foreign Collaboration Programs

Efforts are in the process towards encouraging foreign investors to invest in Indian startup’s. This provides an excellent opportunity for Indian investors to invest in foreign companies. Through this, they can generate more returns to help Indian startups and expand their business internationally.

 Better Economy – Better Business

Because of emerging startups in India, healthy competition will be created in our economy. This will, in turn, give rise to a higher GDP and per capita income will increase. This will create a conducive business environment for existing business as well as new startups and establishments.

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