ICAI is organizing a program for start-ups on the 27th and 28th of June. The venue of the program is Bandra kurta complex, Mumbai. This program is for CA members, non-members, Angel investors, and venture capital fund investors. The gate pass is provided with heading as exhibitor, investor and participants. The members with less experience sit as participants. The members with vast experience talk about their ideas and expect to fund the business. The topics of discussion are as follows: avenues of a start-up business, art and science of start-up, debt and hedging, revenue financing, shareholders agreement, benefits from tax and regulatory for start-up, term sheets, successful start-up entrepreneurs, digital marketing and start-up, and opportunities because of web 3.0. The blog intrigue the readers with insights into the growing start-up economy.
Avenues of start-up business:
In the growing technological world, there are options for starting small-scale businesses. Some of the avenues with the latest upsurge are as follows: medical courier service, online tutoring, online digital marketing, app development, content writing, medical transcription, translation service, food truck service, graphic design, home service, resume writing, event management, catering services and matrimony services are some of the services that require more knowledge and less capital. Starting these businesses reduce unemployment and promotes the private sector. The start-up ideas come from problem analysis, demand analysis and service gap in the community. These ideas hit the market and provide a reasonable return to the owners.
Debt and hedging:
In the early stage start-up companies depend on equity and venture capital fund. If the start-up is not ready to dilute the equity funds and wants funds for business expansion, debt financing is the option. Equity funds and debt funds play opposite functions. Start-ups prepare financial statements, business plans, forecasts, and balance sheets with a clear picture of intangible and hard assets. Banks will check the repayment capacity of the business. The revenue stream and cash balance are the proof of the repayment of the loan. Bank check the financial position of the company. Non-bank lenders demand a structured deal. The different types of debt financing are short-term, long-term, monthly recurring revenue, and revenue-based financing. Investors hedging for debt finance is growing. Chartered accountants play a vital role in preparing business plans, financial statements and forecasts of the business over the years. This projection helps the investors to get the loan amount.
Equity funding:
The legal relationship with the shareholders is mentioned in the shareholder’s agreement. The agreement has the following details: election, shareholder approvals, share transfer restrictions, drag-along rights, pre-emptive rights, and reverse vesting provisions. The majority holding leads to a change in the corporate structure. The minority holding leads to legal control. Equity funding enhances the corporate structure and legal control.
Benefits from tax and regulations for start-ups:
With registration under the Department of industrial policy and Promotion, start-up companies are recognised by the government. The registration help for claiming tax exemption. For the first three years, the start-ups pay the minimum alternate tax. The MAT tax is at the rate of 18.5 per cent.
Opportunities because of Web 3.0:
Web 3.0 is a new technology that focuses on artificial intelligence, decentralisation, user utility and openness. To understand Web 3.0, it is essential to understand the evolution of Web 1.0 and Web 2.0. Web 1.0 is the stage of the internet. In this stage, the internet was used to share information. The web pages were static. This version was in use from 1990 to 2005. Web 2.0 is the current version. In this version, the internet turned towards user-generated content and digital marketing. Web 3.0 includes the features of edge computing, decentralization, machine learning and AI and blockchain. The internet takes the information from the back end and interacts with the front end. The process is hosted through centralised servers. In blockchain technology, smart contracts with conditions maintain anonymous nodes. Web 3.0 provide data security and transparency. This enhances the personalised experience. Chat GPT is the Chabot with features of Web 3.0.
Successful start-up entrepreneurs:
In 2022, the start-up companies that are positioned as unicorns are as under: LEAD, Dealshare, Livspace, and Xpressbees. LEAD is an ed-tech startup based out of Mumbai. The start-up was founded in the year 2012. The company offers the school students to explore technology. The company integrate curriculum, technology and pedagogy. It is honoured as the sixth edtech from India. Vedantu, BYJU, Unacademy, UpGrad, and Eruditas are the other ed-tech start-ups from India. Deal share is the e-commerce platform selling grocery, household and essential products online. The company manages the cost issues with wholesale purchases from direct sellers and selling through community-based users. Livsspace is the interior decoration platform. The company provide home designs with a blend of technology. The company offers software tools for interior design. This tool helps homeowners and designers to design the best interiors. Xpressbees is a Pune-based company. This is a logistic e-commerce company. It delivers stock to 1.5 MN packages. Xpressbees owns a 10 lakh square feet warehouse and hundred hubs in India.
Conclusion:
Start-up companies grow because of new ideas, technology and funding. The program is helpful for chartered accountants to know the current market trends and fund availability. Investors and venture capitalists attend the ICAI program. ICAI create awareness through this program. Start-up companies access large markets and global markets through the Internet. Promoting sales with less cost is the mantra of internet-based business. Start-up companies help local business to reach the global stage.
