September 6, 2021 12:44:27 am
The Ministry of Electronics and Information Technology (MeitY) has formed a 10-member panel, which will be led by Secretary Ajay Prakash Sawhney, to formulate a process to support existing and upcoming startup accelerators, which would then select information technology-based startups “to scale for solving India’s problems creating positive social impact”.
The implementation of the scheme, which was announced on August 25, will be overseen by the 10-member team that will also have four representatives from the industry, a senior Ministry official said, adding that a representative from the Startup India programme will also be in the panel.
“So the MeitY startup hub will act as the implementation agency. It will take some equity in the startups that will apply under the scheme and qualify for the grant. The investment will be done either through a promissory or a Simple Agreement for Future Equity (Safe) note,” the official said, adding a total investment of Rs 100 crore over the next 3 years has been planned by the Ministry for mentoring of startups as well as accelerators.
Startup accelerators look for interesting idea and opportunities to invest in and often mentor these small firms by providing the right kind of market research data and other tactical support. They also invest in these startups, often exiting when a private equity investor or an angel investor puts money in them at better valuations.
On August 25, the IT Ministry had announced Start-up Accelerators of MeitY for Product Innovation, Development and Growth or Samridh to identify 300 startups and help them with customer connect, investor connect, and international immersion over the next three years.
On August 25, the IT Ministry announced Start-up Accelerators of MeitY for Product Innovation, Development and Growth or Samridh to identify 300 startups and help them with customer connect, investor connect, and international immersion over the next three years.
As part of this programme, apart from selecting the startups, the IT Ministry will also ask the accelerators to build customised accelerations programmes that fit the needs of the selected startups.
“Our aim is also to use this scheme to develop an ecosystem for robust startup accelerators by giving them the opportunity to work with well funded startups which will work for the Indian needs. Startup accelerators can be given up to Rs 20 lakh to develop customised solutions for the startup they pick to mentor,” another senior Ministry official said.
For an accelerator to qualify under the scheme, it must have been in the business of incubation for over 3 years and supported more than 50 startups, of which at least 10 should have received non-public investment. These accelerators must have their operations in India with enough “space and infrastructure to carry out activities for the startups”.
The accelerator so selected will be tasked with conducting market research and product positioning, bringing in vertical experts, providing legal experts for intellectual property, incorporation and other matters, meeting the start-up founders on a weekly basis and preparing them adequately for presentation to the venture capitalists and angel investors.
The IT Ministry has looked at the models pursued by startup accelerators such as Y Combinator, Techstartups, and Startup Boot Camp to figure out the right procedures to be followed, officials said. “The tricky part for most accelerators is to know when to exit the startup, or to remain invested when it is doing well. We have looked at various global examples to understand the trends followed by them and will look to implement the learnings,” an official quoted above said.
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