What is the biggest challenge for a budding entrepreneur? In today’s climate starting up is easier than before. Over 75,000 companies already inhabit the start-ecosystem in India. However, the greater challenge lies in sustaining.
If you are an entrepreneur who had already taken off or one who is just set to, it is vital that you are up-to-the-minute with the schemes and programmes that can help you sustain.
Here is a deep-dive into SAMRIDH – the Ministry of Electronics and Information Technology’s (MEITY) initiative for Startups.
What is SAMRIDH and how can it help your Start-up?
The ‘SAMRIDH’ scheme launched by the Centre is an accelerator and ‘feeder’ program to other existing schemes for tech-product based startups, picked on a pan-India scale, based on their high potential growth and solutions offered.
India’s Minister of Electronics and Information Technology Ashwini Vaishanaw had launched the SAMRIDH scheme, aimed at supporting and helping accelerate software and IT product startups, for next stage growth.
The scheme aims to handhold companies through skill enhancement, product and service
enhancement, as well securing funding from various institutions. These are all three vital areas where start-ups often need support.
However, only the elite, high-potential ones get to be chosen.
These startups are picked based for their high growth potential for the solutions they offer, and the proof of concept they have of their core product/service.
As per a widely quoted MIT Sloan research (which the scheme document also refers to), nearly 50% of start-ups perish by the fourth year of their incorporation.
For a start-up, sometimes even with a sturdy viable idea, there could a gamut of factors that could begin weighing it down. The factors could range from not getting the funding at the right time, lack of understanding of the market dynamics, not being in sync with user demands due to lack of a feedback mechanism
The SAMRIDH scheme aims to act as a feeder program, to the already existing government offerings in the technology space, such as Technology Incubation and Development of Entrepreneurs (TIDE 2.0), Centres of Excellence (CoEs) in emerging technologies, MeitY Startup Hub (MSH), and Next Generation Incubation Scheme (NGIS) apart from the various state-wise programs in existence.
What will the scheme actually do?
The scheme selects accelerators, who in turn support startups with investments and mentorship. The main spotlight is on the enterprises that solve India’s local problems, apart from having any international market capabilities.
- The acceleration and support includes skill enhancement opportunities of the personnel wherever required, in order to manage the business and product better.
- The scheme also provides a commitment for the primary round of funding, beginning with around Rs 30-lakhs per startup, and going up to Rs 40-lakhs, apart from a matching amount from the accelerator themselves.
- Greater customer connect, internationalization and investor connect for advance rounds of funding are its other promises.
- Accelerators will be encouraged to take up equity in these start-ups, based on a promissory note, etc. However, the start-ups depending upon preference, will have the option of choosing between equity, debt and financial instrument mixes to service the investors.
- Access to experts in the specialized technical verticals, for product and service enhancement. Legal service support for matters like Intellectual Property (IP), incorporation, etc.
Eligibility criteria will also be provided
Since this scheme is a ‘feeder program’, accelerators are selected based on past performance. It helps if they are in the business of incubation for more than 3 years, and have supported more than 50 start-ups of which at least 10 have received non-public investment.
The accelerators should have India-based operations and should have the support capabilities such as market immersion globally and locally, connection to global investors and venture capitalists, on-boarded business mentors.
The other criterion mentioned is that the accelerators with the highest value startups, will be
given priority, based on equity stake, and the services delivered by the accelerator.