February 2012

Business Zone

Impact of policy environment on funding start-ups in India

Funding has always been the biggest challenge that every venture has to face. Particularly the technology and knowledge based start-up enterprises that are based on intangible assets such as human capital and an entrepreneurial idea. In absence of physical assets, such start-ups find it difficult to secure bank financing and they need to approach equity financiers such as angel investors or VCs. Mostly start-ups do not even have access to working capital loans; though some finance companies offer collateral-free working capital loans to small enterprises with at least three years of operations. Like any other investment, the investment in start-ups is influenced by the policy environment prevailing in the country. The current policy environment in India is reasonably conducive for start ups, but still leaves a lot more to be desired. Domestic money to VC/PE funds are either restricted or prohibited in current regulatory framework. For example SEBI regulations for Domestic Venture Capital Funds do not permit registration of a fund which would have corpus of less than Rs.5 crore ($ 1 million). This makes it difficult for angel groups and seed funds to get registered and raise funds. Pension funds, which are the biggest source of money worldwide, are…

Strategy

First in the Race – Apple and Samsung

Apple and Samsung are embroiled in several legal fights; both are contending for global leadership of smartphone and tablet market, with Samsung poised to surpass Apple in the race in 2012. Smartphones are an interesting example of a product category where the second or third movers have considerably learned from the experience of the product innovators. Long before Apple launched the iPhone in 2007, IBM had released the first smart phone called Simon in 1993. Often the pioneers spend a lot of resources to come up with new and innovative products, demonstrate it to the users and test the market. In the meanwhile, newer companies that are more agile and are quick to see the opportunity, understand the product – market fit, learn from the mistakes of their predecessors, make a big bang entry and harvest the potential in the market already created by the earlier explorers. They survive and even make it big. Samsung, for example, has perfected the game of being the second mover. They study the market leader meticulously, copy every aspect of the market leader’s strategy in minute details, and further improvise on the execution of the strategy.  They end up not only in catching up,…

Customized Social Media Icons from Acurax Digital Marketing Agency
%d bloggers like this: