What is meant by start-up?
Start-up is itself says it a beginning, an entrepreneurial venture come up with an innovative moto, idea, product or service which to going to emerge with better market capture in a nearby future which is initially beginning and financed by wealthy founders and supporters to develop.

Constitutional of the inter-ministerial board?
The inter-ministerial Board of certification would consist of:

1. Joint Secretary, Dept of Industrial Policy and Promotion,
2. Representative of Department of Science and Technology and
3. Representative of Department of Bio-Technology.

What is meant by Angel Investor?
The individuals or the body of individuals who are equity financiers for start-ups or its further development. Generally, these people can expect a higher rate of return than the traditional investment with an equity shareholding in the concerned company.

How to invest in a start-up?

• Keen observation on documentation, research on a project.
• Background of promoters, company board of directors and other hierarchy has to take under consideration.
• The legal framework for questionnaire and verification of your identity before making an investment.
• Funds transfer through the escrow account.
• Capital assistance and percentage, we get if invested among total investors.
• Investor type, verification followed by accredited investor status with supporting document will be generated

Who invests in start-up? Or Sources to start-up?

Family and friends – Generally, funds from these people for business start-up and meanwhile also risky in terms of the possible impact on family/friend relationships if the business is not successful.

Wealthy individuals – Another good source is sound finance individuals who are successful business people and others that have a high net worth and are willing to invest in equity.

Groups – Angel syndicate (a group of angel investors), which raises their potential investment level and contribute funds to the business as syndicate through a professional syndicate management team.

Crowdfunding – Crowdfunding involves raising funds by having large groups of individuals invest amounts as small as INR. 1,000

Eligibility to setup a start-up?
The following conditions must be fulfilled in order to be eligible for Start-up:

• Annual turnover <= to INR. 25 lakhs in preceding financial year.
• Obtain certification from the Inter-Ministerial Board.
• Business should not have formed by splitting up or reconstruction of a business already in existence.
• Incorporated as a private limited company or registered partnership firm or a limited liability partnership.
• Being incorporated or registered in India for less than 7 years and for biotechnology start-ups up to 10 years from its date of incorporation.
• Aims to work towards innovation, development, deployment or commercialization of new products, processes or services driven by technology or intellectual property.

FDI allowed in a start-up?
Yes, 100% allowed to invest from Foreign Venture Capital Investor (FVCI).
Start-ups can issue equity or equity-linked instruments or debt instruments to FVCI against receipt of foreign remittance and also start-ups can issue convertible notes.

The minimum requirement of investment in a start-up?
Alternative investment funds, venture capital funds, angel fund and seed funds registered with SEBI will be eligible for providing recommendation or support or endorsement letter to entities in which not less than 20% equity taken up by such funds.

What qualifies as a start-up for the purpose of Government Schemes?

• Up to 5 years from the date of its incorporation/registration.
• If its turnover <=INR. 25 Crores in preceding financial year.
• Aim towards innovation, development, deployment or commercialization of new products, processes or services driven by technology or intellectual property.
• Not been formed by splitting up or reconstruction of a business already in existence.
• One-person company being a private limited company is entitled to be recognized as a ‘start-up’.

How long recognized as a start-up be valid?
An entity would cease to be a ‘start-up’ upon expiry of:

• 5 years from the date of its incorporation/ registration, OR
• If its turnover for any of the financial years has exceeded INR 25 Cr; OR
• Start-ups would be required to intimate DIPP (Department of Industrial Policy and Promotion) of any such cases within a period of 21 days.

Can existing company register as start-up itself?
Yes, an existing entity that meets the criteria. Visit the Start-up India Portal and Mobile App and get it recognized for various benefits.

The time frame for obtaining certificates in cases already existed entity?
The certificate of recognition would be issued typically within 24 hours upon successful submission of the application.

What documents would qualify as a supporting document to the application to register as a start-up?
One of the following documents is required to be uploaded along with the application for registration as a Start-up on Start-up India portal and mobile app:

1. Recommendation (with regard to the innovative nature of business), in a format specified by the Department of Industrial Policy and Promotion, from any Incubator established in a post-graduate college in India; or
2. Letter of support by any Incubator, which is funded (in relation to the project) from the Government of India or any State Government as part of any specified scheme to promote innovation; or
3. Recommendation (with regard to the innovative nature of business), in a format specified by the Department of Industrial Policy and Promotion, from any Incubator recognized by Government of India; or
4. Letter of funding of not less than 20 percent in equity by any Incubation Fund/ Angel Fund/ Private Equity Fund/ Accelerator/ Angel Network duly registered with the Securities and Exchange Board of India that endorses innovative nature of the business. Department of Industrial Policy and Promotion may include any such fund in a negative list for such reasons as it may deem fit; or
5. Letter of funding by the Government of India or any State Government as part of any specified scheme to promote innovation; or
6. A patent filed and published in the Journal by the India Patent Office in areas affiliated with the nature of the business being promoted: or
7. Letter of recommendation (with regard to the innovative nature of business), in a format specified by the Department of Industrial Policy and Promotion, from any Industry associate.

The list of incubators recognized for the purpose of (a), (b) and (c) is published on the Start-up India portal for reference.
The list of industry associates (g) are published on the Start-up India portal
The list SEBI registered funds for the purpose of (d) is also available on the Start-up India portal

Do I need to submit a physical copy to complete the process of start-up registration?
No. The application has to be submitted online only.

Once my registration is successful, would I obtain a certificate for it?
Yes, on successful registration, you would be able to download a system generated verifiable certificate of recognition.

Benefits to start up?

• Much less risky than debt financing
• Freedom of choice in all aspects of the business.
• Angel investor often looks for a personal opportunity as well as an investment.
• Low-cost entering.
• Freedom to question everything and results in a better product.
• No repayment in the event of business failure.

Limitations to start-up?

• Loss of complete control as a part owner.
• Decision making is diluted.
• With debt financing, the lending institution has no control over the operations.
• The market may not already be established, it may take longer to become profitable
• Have to spend more time and effort to start up include developing your customer base, establishing lines of credit and supply and finding experienced staff.