Investment in Startups is a Wise Decision for Investors?

Investors always look for opportunities, and investment in Startups is one of the best platforms where investors can encash the opportunity and could get good returns. Unfortunately, the startup has become a synonym for growth, vision, hard work, and a futuristic approach. Startups in India should not be confused with small businesses. Startups consist of innovation, whereas small businesses are about practicing a traditional business on a small scale.

In India, PM Narendra Modi has started the initiative of startup India, which help entrepreneurs to start their own business and help to boost the economy. The government believes these entrepreneurs have the potential to grow their businesses and flourish.

Startups are hyper-innovators driven by crazy ambition and insight (and, yes, sometimes naivety) to charge into the unknown. Mature organizations have innovation agendas – whether they involve significant research and development budgets or corporate innovation frameworks – but often, the core DNA of these cultures is missing. Moreover, the fundamental alignment of the individual and the outcome means that it’s challenging to replicate the innovation pressure-cooker of a startup in a larger organization without that methodology being part of its core business model.

This is why startups are our outside bets in the innovation cycle, where mistakes must be made, and breakthroughs must be discovered for a business to continue. It comes with the territory that they are high risk. But at the same time, if executed the right way, they can yield exponential returns compared to other more traditional investment classes, including non-fiscal returns of investment like education, entertainment, and impact. What makes startup investing interesting compared to other investment guide is that startups often can’t (and shouldn’t) be able to provide the level of forecasting or comparable market data as other investment propositions.

1. Benefits Of Early Investment

Startup funding has multiple stages. First, the investors will have better leverage in controlling the system of the startup. Second, capitalists can benefit from investment by investing in a startup. In return for their investment, they get ownership of the company. Third, the harvest will be outstanding by providing early capital and management services. The startups in India are increasing, especially after 2014, and investing individually or collectively can be of more benefit. There are over 15000+ new startups in India, and the chances of them being successful are relatively higher because of their innovative nature. They don’t fear of getting failure.

2. Government Policies

The Indian government plays a massive 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 had committed a startup funding of 1700+ crores to venture capital companies. Many startups are getting benefits from startup programs in India.

3. Working With The Government

In the recent survey released by startup India’s official website, a hedge fund of over 14000+ crores has been released to startups since its incubation in 2016. Private investors are collaborating with the government to raise funds. And in turn, the government is ready to provide benefits and exemptions to such companies.

4. Introduction Of New Sections In The Income Tax Act

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

5. Infrastructure Services

The incubation center for startups provides infrastructure facilities to new companies. This is done to focus on upcoming ideas and give out good outputs by the startups. Various committees formed are formulating new policies to boost investors’ confidence in the capitalization of a startup.

6. Expansion Of Venture Capital Investors

Investing in innovative ideas can undoubtedly have a substantial 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 to make more companies interested in business with investors.

7. Foreign Collaboration Programs

Efforts are to encourage foreign investors to invest in Indian startups. This provides an excellent opportunity for Indian investors to invest in foreign companies. They can generate more returns to help Indian startups expand their business internationally through this.

8. 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 businesses and new startups and establishments.

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