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Friday, July 11, 2014

Entrepreneurs Get `10,000-crore Golden Boot

Jul 11 2014 : The Economic Times (Bangalore)

Entrepreneurs Get `10,000-crore Golden Boot
Finance Minister Arun Jaitley lavished attention on startups, bringing them from the fringes to the centre of national economic discourse. He an nounced a host of measures to encourage entrepreneurship, including a `10,000-crore fund to back early stage companies. Once such a fund is established, it will be the biggest pool of rupee capital in India and among the largest venture funds in the country . Only Sequoia Capital, which manages nearly `12,000 crore, has more money . “This will place India right after Silicon Valley and ahead of China in terms of early-stage capital,“ said Sateesh Andra, a managing partner at Venture East Tenet Fund, which was the early investor in Little Eye Labs that was bought by Facebook in January. The move opens up possibilities for local financial institutions to participate in the surge of entrepreneurial activities across the country , where at least two startups are launched every day . This year, funding for early stage companies rose nearly 40% with `3,630 crore invested so far. But over 90% of such venture capital comes from foreign funds.“Rupee funds investing in private com panies must be encouraged by bringing taxation in unlisted companies at par with dollar funds or listed entities in India,“ said Sudhir Sethi, founder of ear ly stage investment firm IDG Ventures India. By announcing an “entrepre neur-friendly legal bankruptcy frame work“ that will allow failed startups to down shutters with ease, Jaitley has shown that he is responsive to the needs of startups. He also announced a network of incubators and accelera tors across districts and a `200-crore fund for Dalit entrepreneurs, which will be managed by IFCI. Industry members are also upbeat about the plan for Digital India­a programme to promote indigenous IT hardware and software product development­and the launch of a National Rural Internet and Technology mission, at an outlay of `500 crore. “The Budget establishes the government's special focus on the software product industry ,“ said Sharad Sharma, cofounder of iSpirt. Experts said the FM's statement calling for a debate on a new tax framework is a positive signal. “Providing equity capital to small and medium businesses to fuel economic activity appears to be an important theme,“ said Gopal Srinivasan, chairman of TVS Capital Funds.

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