5.

Data Analysis & Interpretations

5.1. Inferences

Out of the 52 people interviewed, majority of the people (75% which is 39 people) believed
the Indian start-up ecosystem to have gone through a fundamental evolution as opposed to
25% of the people believing there to be minimal to no change.

A majority of about 73% of the people interviewed believed that it is now easier for aspiring
entrepreneurs to move from ideation to actualization of their business plan compared to a
very marginal set of people (27%) being unsure about or dissenting with the above statement.
While the responses were close, the positive takes a clear lead. About 58% of the people
interviewed believe that the private space could very well be the next genre of wealth
creation.

Government initiatives for start-ups have garnered a lot of attention. However, out of the
people interviewed, the responses were extremely split. With the strongest vote being neutral
at about 42% followed by about 39% people being in agreement of the statement.
Out of all the people who filled the survey, only about 65% of them believed the Covid 19
pandemic to have had any significant impact on the start-up ecosystem. Leaving about 35%
saying otherwise (minimal to no impact).

Future Outlook

10

34

Positive Negative Neutral

1. Positive – 34
2. Negative – 10
3. On the fence – 8

Inference – While a lot still has to be done, this is also a space to be celebrated. India is at
number 3 with the highest number of unicorns. Out of everyone interviewed, majority of the
people (about 66%) of the people have high expectations from the Indian start-up
ecosystem’s growth while about 20% of the people have contained expectations and believe
India has a long way to go and the remaining 14% neutral on their stance.
 5.2. Analysis

Q.4 Please state any 2-3 major/fundamental changes -

1. Favourable environment, structural changes - 2

2. Greater scope - 4
3. Tech advancement - 10
4. Govt funding – 12
5. Easier funding, more incubators, better access to capital, higher willingness to pay,
accessibility to funds - 17
6. Shift in attitude, more start-ups, perception – 9
7. Coverage and exposure – 8
8. Increase in start-ups & unicorn stories – 7
9. More focus on revenue and business instead of raising investment, focus on
profitability, idea is given importance and not just the immediate business model – 3
10. Increased int in start-ups by global funds – 2
11. Ease of setting up – 3
12. Self-employment trend – 2

Analysis – Majority of the people believed that the greatest change was observed in terms of
access to capital & the surge in government spending to facilitate the development of the
ecosystem. Some other significant changes a shift in attitude, increase in unicorn stories and
technological advancement.

Q6. What are 2-3 most common misconceptions about the ecosystem prevailing amongst
aspiring founders?

1. Getting funding is tough – 8

2. Very risky – 4
3. Customer isn’t all that important initially – 1
4. Execution is easy, Good ideas can’t fail – 4
5. Overnight success – 3
6. It is easy, life expectancy is going down because of competition – 5
7. All it takes is a good idea – 4
8. Founders lose control of management if they raise funds – 2
 9. High initial funding/capital required, high boot money – 4
10. Can only be extremely tech based – 2
11. Turning friendships into business is a good idea – 1
12. Glamorous field – 1
13. That you also have complete control over the operations even if more than 50% of
equity is in charge of the investor - 1
14. You cannot have a start-up without funding from Investors - 1
15. Convincing venture capitalist to invest has become easier, capital budgeting is not
important anymore – 4
16. Social media marketing gets easy and quick sales. Results will be seen within months
17. It's difficult to start a new venture than earlier times
18. People will not support – 3
19. Work 100+ hours a week - 2
20. Stiff marketplace, hard to sustain – 2

Combined Analysis – A lot of misconceptions and misinformation have surrounded the

relatively nascent Indian start-up ecosystem. Some of the most prevalent were how difficult it
is to secure funding (and then subsequent funding) for one’s idea and business, how to simply
sustain working 100+ hours a week is a requisite or the fact that the competition is very stiff.
However, with all the recent advancements and fundamental changes that the space has
witnessed, a lot of these concerns have been proved redundant. From the surge in government
spending to strides in technological advancements; from greater coverage and reach to an
increase in entrepreneurial stories, the start-up ecosystem has gone through a fundamental
change.

Q.7 How crucial is the evolution of this ecosystem for the overall growth of the economy and
country? Also state your reason

1. Make founders believe that their industry can grow (fuel imagination) - 2
2. Better ecosystem, more opportunities (job opportunities & corporate is plateauing) - 3
3. Increase income, purchasing power & consumption – 2
4. More job opportunities – 5
5. Can help solve a lot of socio-economic problems – 3
6. Liquidity of capital, creating more wealth – 1
 7. Healthy market competition – 1
8. Add to the GDP, help economic cycle – 4
9. Fills gaps in the economy – 1

Analysis – All 52 respondents affirmed for the start-up ecosystem to be vital for the overall
growth of the economy and country with varying reasons translating to better regulations by
the government and opportunities from the start-up ecosystem.

Q.10 What are 3-4 things the government and regulators can do to make the ecosystem more
attractive for investment?

1. Making starting a business easier

2. Lesser regulations
3. Improved transparency
4. Subsidies to target sectors
5. Greater FDI, lower export rates
6. Invest more in incubators in top colleges
7. labour force reforms
8. Create a start-up framework
9. Investment conducive environment (invite more FDI), Need for easier of Business,
Tax Holidays, subsidies, EDP Schemes, Fund availability, trainings/workshops
10. Less documentation for registration, smooth and fast legal process
11. Creating stable markets
12. Remove market controls

Combined Analysis – The start-up space is considered unanimously crucial for the growth of
the economy. Whether it adding to the GDP, promoting healthy competition or instilling
liquidity into the economy by creating more wealth and jobs, every stakeholder, including the
government, has recognized its potential. The government being a monumental player, has a
key responsibility to play to facilitate its growth as well. Making the ecosystem attractive is a
primary one. It can do so by mainly making regulations less stringent, creating a better start-
up framework and preparing a more investment conducive environment
Q.12 Impact of Covid 19 on the space (elaborate)–

Positive Neutral Negative

Newer Opportunities No impact – 4 Downscaling of operations post
covid
Start new business Stiff competition, tougher to survive
Investors have become more Decreased discretionary spending,
conscious cash crunches (less demand)
WFH has proven to be cost effective Delayed projects
(post covid)
Heavy reliance on digital Increased restrictions
Shift from traditional to modern Struggled to maintain their WC
Sector specific benefits were
observed (ed-tech/health tech)
36 4 12

Analysis – The impact of Covid 19 led to differing opinions in terms of its impact being
positive or detrimental to the country. The majority of the people surveyed believed its
impact to be positive majorly with the negatives trailing behind closely.

Q.13. Do you believe that the impact of Covid 19 has been a negative one exclusively? Or is
there a way founders can use it to their advantage?

Yes, just negative mainly – 12

No, not solely negative – 40

How can it be used to their advantage –

 pivoting business models,

 recovery is likely to be faster, more investor activity
 new business opportunities/newer avenues
 lesser costs involved, WFH benefits
 expansion of business ideals
 faster adoption
  More tech adaption
 More R&D needed

Analysis – While the impact of Covid 19 was felt across the board unanimously, the way it
was perceived was not. Majority of the respondents didn’t believe it to be a solely negative
one for the country and the ecosystem. They believed that a lot of opportunities presented
themselves as a blessing in disguise as a by product of the pandemic. However, a small chunk
of the respondents did believe the pandemic to have a negative impact primarily.

Q.14 Please elaborate on the changes that Covid has brought along in this space in terms of
– sectoral preference, inclination towards entrepreneurship and the funding
activity levels in the country

1. Increased inclination towards entrepreneurship – 52 respondents affirmed

2. Sectoral preference –
 Huge shift towards IT
 B2B sectors like SaaS, tech products are seeing traction
 In B2C, consumer brands, health tech and ed tech
 Start-ups from sectors which promote minimal human connect and made lives
go on despite the world being shut down
 Inclination towards eco-friendly, sustainable, vegan, handmade, self-care,
health care, fitness, pharma
 Noticeable change in the local logistics industry
 Media creation and entertainment
 All things digital
 Essentials are doing fairly well
3. Funding activity –
 Passive, savings are popular
 Govt spending is increased
 Big ticket deals will remain few
 Early-stage funding is yet to make a come back
 Fairly easy funding, FDI has increased
 MSME sector has received immense funding
Q.15 Is there a way for start-ups to raise funds a little more seamlessly in the post Covid era?

Crowdfunding (will take time to be more mainstream) 8

Friends & Family 9
Angel investors 5
VCFs 7
Online investor market 4
Public banks 4
If start-ups register for MsMe then they can 9
Debt financing 6

Fund Raising

Debt financing 6

If start-ups register for MsMe then they can 9

Public banks 4

Online investor market 4

VCFs 7

Angel investors 5

Friends & Family 9

Crowdfunding (will take time to be more… 8

0 2 4 6 8 10

Inference – majority people believe that registering as MsMe & trying to raise money
through friends and family is the easier way to go about it while on the other end of
the spectrum, public banks, online investor market and angel investors are observed.

Combined Analysis – There’s been a noticeable shift towards IT, B2B sectors, health &
wellness and all things digital in terms of sectoral preference and on the other hand, funding
activities seem to have mixed reviews with some claiming for it to have gone passive as a
repercussion of the pandemic while few stating for it to have remained the same and even,
increased due to greater government spending, increase in FDI, MsMe sector being on the
rise etc. The aforementioned funding seems to have found its base in friends & family, MsMe
registering as start-ups and crowdfunding primarily. Few other popular ways to obtain
funding during the pandemic included VCFs, debt financing and angel investors.
Q.16 Do you think India is cultivating into a hub for start-ups? If yes, do you think
things post Covid 19 would continue to look attractive?
1. Yes – 28
a. Cheap employment
b. Ease of doing business
c. Capacity to rapidly respond to the advancing needs
d. Upcoming decade to be shaped by start-ups
e. Having embraced digital transformation/digitized
processes 2. No – 14
a. Only in the big cities where the funding is easily available
b. State of the economy
c. Actual implementation of govt initiatives is negligible
d. Still time for it to get there
3. Can’t say/Unsure/Too early to comment – 10

Analysis – The conclusion that can be drawn based on the responses is that either the
views on the future are very split or its too early to tell. With the positive outlook being
only slightly higher than that of the neutral and negative one.

Analysis summary –
While the Indian start-up ecosystem is extremely nascent, it has gone through a major
and fundamental shift. Its entire foundation and structure has evolved and turned 180
degrees over the past few years. Whether it’s the way it has been viewed/perceived in the
past or the way it’s true potential has been recognized, things have been looking up.

The government has also acknowledged its importance by introducing various initiatives
although they might need a slightly more effective implementation plan and a few tweaks
to have the intended effect. The organic changes and shifts were taken for a toss when the
Covid 19 pandemic hit the space. The effects were indisputable, some good and some bad.
However, with the right measures, bleak times will be endured and the industry is
already being touted as the next genre for wealth creation.