Professional Documents
Culture Documents
International
International
Student of MBA, S. B. Jain Institute of Technology, Management & Research Nagpur (India) 1 Assistant Professor, S.
Abstract:
Start-ups companies are newly founded companies or entrepreneurial ventures that are in the initial phase of development.
Start-ups are the one who working towards innovation, commercialization of new product or services. This research study,
analyzes the entrepreneurship environment through specifically focusing on startups and innovation. It will try to investigate
the main challenges that startups and Challenges Faced by Entrepreneur.
I. INTRODUCTION:
Start-ups companies are newly founded companies or entrepreneurial ventures that are in the initial phase of
development. They are most commonly associated with high-tech projects, development and production, distribution of new
products, process or services. Start-ups are the one who working towards innovation, development, and commercialization of
new product, process or services driven by technology. Start-ups may be a new venture within the sort of organization, which
is means for scalable business. They are created in the process of development of new product and process. The base of start-
up is innovation where entrepreneur comes up with an innovation idea that can be commercialized and generate social benefit.
Being small in size and new within the business, they often find difficult to arrange funds for his or her functioning. The start-
up is belonging to different fields.
Many young individuals have displayed their entrepreneurial talents in most effective manner by establishing their
own start-ups. Any business idea to become successful requires entrepreneurial abilities to foresee business opportunities,
gathered required resources meticulous planning and implementation. Along with these, one needs to consider uncertainty and
challenges involved in the selected business idea.
Madhvapaty & Rajesh (2018) addressed the Challenges of HR Tech Startups such as failure to lay groundwork for adoption
by employees. While there are diverse products and technologies in the market, the core challenge is to find the right product-
market fit.
Nipun Mehrotra (2018) said that The Indian start-up community, ranked third globally in terms of number of start-ups, has
been creating new job opportunities and attracting capital investment. We believe that start-ups need to focus on societal
problems, including healthcare, sanitation, education, transportation, alternate energy management and others, which would
help deal with the issues that India and the world face. These require investments in deep technology and products, which are
built to scale globally.
Madhura Wagh (2016) in her research paper title “Government initiative for Entrepreneurship development- Start up India
Stand up India” writes “In India Entrepreneurship is less desirable career choice. Government policies and programs,
education and training are regarded as main constraining factors for entrepreneurship. Recommendations were directed
towards liberalization of government policies, capacity building through training and education, restructuring through
incentives and tax structure to promote entrepreneurship and increased investment in research and development through
growth in innovation. To address these recommendations ‘Start up India Stand up India’ initiative is announced by
government. It is an initiative by government ‘to build strong eco system for nurturing innovation and startups in the country
that will derive sustainable economic growth and generate large scale employment opportunities”.
Badra, Shailja, and Sharma Vivek (2016) in their research paper title “Startup India- New Opportunities For The
Entrepreneur” write “The success of Startup India campaign hinges on initiatives like faster and easier registration of
Companies, self-certification for many legal requirements, zero inspection for three years, funding for patents, and speed of
patent protection. It is important to add provisions which aid the closure of dead companies within 90 days. Indian lawmakers
could do this under the new bankruptcy bill. The central theme is that ease of starting and ending is critical in the context high
rate of startup mortality. The Government proposal do so, across Universities, innovation movements, research parks and
industry parks is on similar lines. The promise of an initial capital of ten thousand crores over a period of four years from the
government is capable of attracting tenfold investment by 2022. Credit guarantee for startup lending is the booster dose
Grant Thornton for ASSOCHAM India (2016) writes, “Startups have been the flavor of the season over the last few years
for the Indian markets. This has resulted into the emergence of a number of home grown unicorns across the country. One of
the major contributors leading to this development has been the mega funding that has been ploughed into most of these
unicorns between the period 2007 and 2015. This has been in line with the global trend dominating the space. Even the
aspiring unicorns have had a decent run during this period, where managing to find investors is usually considered a tough
task. The trends of investments suggest that investors want to enter as an early investor, even before the start of the firm. From
an overall viewing, India comes across as a thriving under-penetrated consumer driven market with a scope for exponential
growth. Internet penetration and its increasing importance will drive most of the businesses. On account of the consumer
demographics, with China being out of bounds, India offers the largest pie of investment opportunity that the world is eyeing.”
Uruba Andaleeb, and Dr. S. D. Singh, In their research paper title “A study of Financing Sources for Start-up Companies in
India”(2016) explain that “Before the recent hysteria of Startups, India was mostly popular as an IT outsourcing destination
that provided cheap and easy labor to the global companies for carrying on various back- end jobs. Technology startups in
India date back almost three decades. On compilation of the Industry’s major landmark, Microsoft Accelerator in India came
up with four distinct phases of growth and maturity that have traversed so far: software services and global delivery model, the
dotcom era, the rise of product startups and growth of startup ecosystem.
Nishith Desai Associates (NDA) (2016) explains “A startup is faced with a number of issues that have to be dealt with in
order to grow into a successful organization. Apart from planning the most effective business strategy for the company, the
startup needs to look at the regulatory environment, various legal issues, and the laws of the country where the start-up is
proposed to be set up. In addition to this, the startup will also need to examine the regulatory and tax regimes of locations it
plans to do business in. In many instances, structuring the correct set up for a startup helps to prevent future complications, and
mitigate regulatory and tax risks at a future stage when the startup is nearing maturity perhaps the first step a startup needs to
take is to determine how it will be setup, from where the seed investment required to set up the startup entity needs to be
brought (colloquially referred to as “Structuring”) and what sort of entity it would like to function as. For certain professions,
this may be limited to partnerships though the preferred entity tends to be a company. Incorporating a company requires
certain steps, which we deal with in this paper.”
Sharifi Omidand Hossein, Karbalaei, Bentolhoda, In their research paper title “Understanding the Financing
Challenges Faced by Startups in India” (2015) explain “India is a country in South Asia. It is the seventh-largest country by
area and the second-most populous country with over 1.2 billion people. Large population implies a large potential market in
India; however, it also leads to heavy employment pressure in Indian society. In recent years the self-employment
consciousness among college students are increasing and the students are less likely to rely on parents or schools or wait for
opportunities. Instead, they tend to take initiative to look for new chances for themselves. Many businesses start with a dream,
but it takes more than just a dream for them to grow into successful businesses—including the tenacity to overcome the many
challenges facing startups today. Startups take time, effort, and energy. Funding is a major concern for startups and small
businesses.
Sharma (2013), made a study on women entrepreneurs in India. She concluded that women entrepreneurs face many
problems like social barriers, legal aspects, lack of education, family support etc. She also explained the various factors like
pull and push factors affecting entrepreneurship. According to her women have the probable and firmness in setting up the
enterprise and fighting against the all odds.
Goyal, Prakash (2011), in their research paper concluded that at present the position of entrepreneur is better than before.
Economies are taking the efforts to make and enhance the entrepreneurship. Government is providing the awareness and
necessary steps are being taken up by them. Start-ups must be configured properly with the business expertise to encounter the
latest trends and changes in the environment and capable enough for aspiring the supremacy in the entrepreneurial coliseum.
N. Bosma, M. V. Praag, R. Thurik and Wit (2002) has presented a detailed study of firms investing in the human and social
capital for improving the performance. They also explained that one cannot be sure about the favorable aspect is due to
investing or somewhat due to the innovative entrepreneurs put more in their human and social capital. They also found that
the individual entrepreneur who are more skill full in the industry perform better than the others and finally, they conclude
that investing in human and social capital increase the entrepreneur’s performance.
III. OBJECTIVE:
1. To know the various issues and challenges faced by the start-up company.
2. To analyze the opportunities for the start-up company.
Starts ups have played and still play significant roles within the growth, development and industrialization of the
many economies everywhere the planet. Startup is flagship initiative of the govt. of India, intended to make a strong
ecosystem for nurturing innovation. Startup will drive sustainable economic process, generate large scale employment
opportunities, and minimize unemployment.
3. Innovate India:
Towards this end, the government has pushed for the utilization of digital technologies through initiatives like the
National Programme on AI and therefore the establishment of nine centers of technological excellence.
4. Media:
The media industry has also huge opportunities to supply to young entrepreneurs. With the large growth of this
segment, any business during this field will help entrepreneurs reap huge benefits. Television, advertising, print and
digital media have seen a boom in business within the recent times and is probably going to grow more in coming times.
5. Infrastructure and Resources:
An estimated 100+ Startup Incubators across the country, mostly housed in academic institutions; this number is
probably going to cross 300 by 2020 — what this suggests , is that, there will be a startup incubator in every state, city,
and city within the country; thereby enabling entrepreneurs to access resources and solve problems in their local areas.
Next, we have Co-Working spaces that are growing at an exponential rate and this is often likely to end in entrepreneurs
having access to office spaces in their neighborhood.
8. Changing of mindsets:
Nowadays, most of the people have given up the traditional mindset of earning only through jobs. Many young
people have started showing interest in starting their own business with the help of latest technology and innovations. This
has resulted within the development of various startup ventures within the country.
2. Financial Challenges:
As mention earlier, finance is the integral part of the start-up process. . Any start-up would face financial issues
and problems for several reasons and in several stages. For instance, while bootstrapping the founder negotiates with
relations and friends to convince them to take a position in his/her idea. He/she invests within the business, and since the
thought is in its early stages, he/she might need extra money to expand it. Afterwards, within the seed stage, founder
should search for angel investors and convince him/her with reasonable valuation plans.
3. Human Resources:
Startup normally starts with one founder or some co-founders. As times goes by founder needs more experts to
develop the prototype etc. Then he/she negotiate with people, make team and finally hire employees. This process is so
critical to succeed and if the founder lacks enough knowledge of the field, the start-up might fail, due to human resources
management issues.
4. Support mechanisms:
There are varieties of support mechanisms that play a big role within the lifecycle of startups. These supports
mechanisms include angel investors, science and technology parks, small business development center, venture capitals
etc. Lack of access to such support mechanisms increases the danger of failure.
6. Lack of Mentorship:
Lack of proper guidance and mentorship is one among the most important problems that exist within the Indian
startup ecosystem. Most of startups have brilliant ideas and/or products, but have lit or no industry, business and market
experience to urge the products to the market. It is a proven example that an excellent idea works as long as executed
promptly. Lack of adequate mentoring/guidance is that the biggest challenge which could bring a potentially good idea to
an end.
IJCRT2011068 International Journal of Creative Research Thoughts (IJCRT) www.ijcrt.org 661
www.ijcrt.org © 2020 IJCRT | Volume 8, Issue 11 November 2020 | ISSN: 2320-2882
7. Environmental elements:
Many startups fail thanks to lack of attention to environmental elements, like the prevailing trends, limitations
within the markets, legal issues, etc. While a supportive environment facilitates the success of startups, a maleficent one
could result is failure. The environment for a startup is even harder and important than for a longtime firm.
9. Team Members:
To find and hire the proper quite talent for the business with skills to match growing customer expectations are one
among the most important challenges. Usually, each member is specialized in a specific area of operations. Assembling an
honest team is that the first major requirement, failure to possess one sometimes could break the startup.
10. Competition:
One of the biggest challenges faced by the start-ups is the competition. They need to be very cautious also as
aggressive while designing the market strategy. It is more threat if one is entering into established markets or trying to
establish oneself into existing product. They need to be flexible as well as innovative at framing various policies in term of
offering, pricing, etc.
14. Talent:
In India, only a few are able to hand over the comfort and security provided by their jobs to become entrepreneurs.
Hence, it becomes difficult for startups to draw in and retain quality talent – since people generally do not want to quit
their jobs at larger companies to travel and work for a startup.
17. Funding:
Lack of funding is one among the main issues being faced by startups in India today. Add to that the shortage of
state support, in terms of policy approvals, bureaucratic red-tape, and slow decisions by committee mentality – this poses
an enormous challenge for Indian startups.
18. Vision:
Most Indian startups lack the long-term vision and leadership to sustain and grow their business over the long run;
an excessive amount of emphasis is given on quick monetary returns rather than innovation – a situation that is not helped
by the VCs/angel investors for these startups, either.
19. Infrastructure:
The infrastructure in India leaves much to be desired – poorly planned roads, inefficient logistics, quality of Internet
service, issues when it involves water and electricity, among others, all contribute adversely to the startup ecosystem in India
today.
20. Compensation:
Indian startups, compared to their peers in other startup hubs, are generally reluctant in paying their employees in
terms of industry standards; they typically blame the economy/recession as a neighborhood of these “cost-cutting
measures”, while on the opposite hand, the workers are overworked and underappreciated. This results in substandard
performance by the employees, and in turn, the company as a whole.
21. Mentorship:
The startup ecosystem in India faces a significant dearth of excellent mentoring and a network India does not have
an outsized pool of successful entrepreneurs who have built successful companies from scratch, and are willing to
mentor subsequent generation of entrepreneurs. Many entrepreneurs are trying to find good mentors – as against funding.
VIII. CONCLUSION:
Start-up India was launched to provide a very promising future to the entrepreneurs of the country. The initiatives
introduced were in great favor to make start-ups successful. This paper attempted to analyze the benefits and challenges faced
by the start-up. According to the research done, we can conclude that the initiative of the government brought a deep and last
longing positive spirit in the country for all people young and old who wanted to pursue their dreams of having their own
successful start-ups.
The startups in India tend to have lot of opportunities for growing their business. Even if they face issues and challenges, they
should try to cope up with these hurdles in a well efficient manner
1. Madhvapaty, M. & Rajesh, A. (2018), Article- HR tech startups in India, Human Resource Management International
Digest.
2. Wagh, Madhura (2016).Government initiative for Entrepreneurship development – Start up India Stand up India: IRACST
– International Journal of Commerce, Business and Management (IJCBM),.Vol. 5, No.1, Jan-Feb 2016. ISSN: 2319–2828
3. Badra,Shailja, Dr. Sharma,Vivek(2016).Startup India- New Opportunities For The Entrepreneur: International journal of
Science Technology and Management (IJSTM). Vol.5, Issue1. ISSN: 23941537
4. Uruba Andaleeb and Dr. S.D Singh (2016) - A study of Financing Sources for Start-up Companies in India;
International Review of Business and Finance Volume 8, ISSN 0976-5891
5. Report title “Start – Ups: What You Need To Know” (2016) by Nishithdesai associates. Mumbai.
6. Sharifi,Omid, Hossein, Karbalaei.Bentolhoda.(2015).Understanding The Financing Challenges Faced By Startups In
India: International journal of Science Technology and Management (IJSTM). Vol.4, Issue1. ISSN:23941537
7. M. Caliendo,S. Kunn,F. Wiebner and J. Hogenacker, “Subsidized start-ups out of unemployment :A comparison of
regular business start-ups, IZA Discussion Papers”, 8817, 2015.
8. Y. Sharma (2013) “Women entrepreneur in India”, IOSR Journal of Business Management, IOSR Journal of Business
and Management (IOSR-JBM) e-ISSN: 2278-487X, p-ISSN: 2319-7668. Volume 15, Issue 3.
9. M. Goyal and J. Prakash (2011) “Women entrepreneurship in India-problems and prospects”, Zenith International
Journal of Multidisciplinary Research, International Journal of Multidisciplinary Research Vol.1 Issue 5, September
2011, ISSN 2231 5780
10. N. Bosma, M. V. Praag, R.Thurik and G. D. Wit, (2002) “The value of human and social capital investment for
the business performance of start-ups”, E-ISSN : 2455-295X
11. Nipun Mehrotra. Chief Digital Officer, IBM India/ South Asia, 2018.
Link:
1. https://www.startupindia.gov.in/content/sih/en/about_startup_portal.html
2. https://www.startupindia.gov.in/