Knock on the government’s door - you will be surprised by what you find
A technology entrepreneur in India is faced with several challenges (and opportunities) while he sets out to create a technology startup.
Apart from identifying the right idea and the right markets and being able to recruit the right team, the most crucial challenge an entrepreneur faces is raising money for the new venture. There are widely known sources of funding for technology startups that one can think of, such as venture capitalists, angels, banks, and friends and family. But, an often-overlooked source of funding, particularly in the early stages of a startup, when private investors hesitate to invest due to the high risk of failure associated at that stage, is government funding. Through an array of programs and initiatives, the government offers funding for technology startups, from early-stage development to full-scale commercialization, which entrepreneurs could take advantage of.
Issues with Technology Start-ups
Getting a startup off the ground is strewn with challenges and difficulties. It is more so in the case of a technology startups as there are specific set of challenges associated with them that need to be overcome. There is always a risk of the technology idea on which the start-up is based (technology risk) will fail or not deliver to the desired level. Also, technology startups will need more resources and infrastructure even at the early stage of development. For example, a software solutions company can start product testing or product development with very little investment and infrastructural support, whereas a material science technology startup will need laboratory facilities to even test their idea and for product development, and these facilities are lot more capital intensive and need a much greater upfront investment.
Since idea testing and product development is such an involved process in the case of technology startups, it also extends the time-frame in which the first product/products can reach the market. Which means, an investor, who invests at an early stage of a technology venture, has to wait for a much longer period to see the returns materialize. From a private investor’s point of view, all these factors add up to a significant and in many cases an unacceptable level of risk. And hence, funding is that much hard to come by for an early-stage technology startup. So, traditionally, entrepreneurs have turned to their own funds, or to the support of friends and family or to sheer ingenuity and resourcefulness to take their venture ahead.
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But, there are government funding sources that have been set-up to specifically support and fund technology-based startups that could be exploited. These funds could be used right from idea validation stage to the full-scale commercialization stage. There are various needs at each stage of technology commercialization and new-venture development that need to be understood before one can fully understand and exploit the funding landscape and funding opportunities offered by the government. The following section gives a brief outline of the various stages involved in starting and growing a technology startup.
| Technology Development Funds | ||
| Organization | Scheme | Funding Amount |
| Department of Scientific & Industrial Research (DSIR) | Phase I: Micro Technopreneurship Support (TS) | Rs. 75,000 subject to 90% of approved project cost |
| Department of Science and Technology (DST) | Instrumentation Development Programme | Up to Rs 35 Lakh sanctioned in recent projects |
| Department of Bio-Technology (DBT) | Small Business Innovation Business Research Initiative (SBIRI) Phase 1 | Upto Rs 1 Crore, upto Rs 50 Lakh as grant and rest as soft loan |
| Department of Bio-Technology (DBT) | Small Business Innovation Business Research Initiative (SBIRI) Phase 2 | Soft Loan upto Rs 10 Crores |
| National Research Development Corporation (NRDC) | Support to Inventors | Rs 2 lakh |
Stages of Technology Commercialization/New Venture Creation
Figure 1 illustrates the five stages of technology commercialization and new venture creation. The first stage is where the entrepreneur recognizes an opportunity that could be exploited by identifying a problem and a corresponding solution for that problem. The next step is the idea validation stage, where the do-ability or proof of concept of the technology is studied by experiments and tests. The third stage is the prototyping and demonstrating the technology at a lab scale. The next step is where the process is scaled up to commercial scale, and all the hurdles of setting up a plant etc. is overcome. The fifth and the last stage in the new-venture creation process is commencing commercial production and getting the product to the customer.
| Funds for Patent Protection/In-licensing | ||
| Organization | Scheme | Funding Amount |
| Department of Scientific & Industrial Research (DSIR) | Phase II: Supplementary TePP Fund (STF) | Rs. 7,50,000 subject to 90% of total project cost |
| Department of Scientific & Industrial Research (DSIR) | Phase II: Seamless Scale-up Support for TePP projects (S3T) | Rs. 45,00,000 subject to 50% of total project cost |
| Ministry of Micro Small Medium Enterprises (MoMSME) | Support for Entrepreneurial and Management Development of SMEs through Incubator | Rs 6.25 Lakhs |
| National Innovation Foundation (NIF) | Micro Venture Innovation Fund (MVIF) | up to Rs 10-15 Lakhs |
| Ministry of Micro Small Medium Enterprises (MoMSME) | Assistance for Grant on Patent/ GI Registration through the National Manufacturing Competitiveness Council (NMCC) | Rs 25,000 for domestic patents and Rs 2 Lakh for foreign patents |
| Ministry of Communication and Information technology (MIT) | Support International Patent Protection in Electronics and IT (SIP-EIT) | 50% or upto Rs 15 Lakh for filling International patent |
| Council of Scientific & Industrial Research (CSIR) | New Millennium Indian Technology Leadership Initiative (NMITLI) | Grants for Public Institutions and Soft Loan for Private Sector Companies. Few Crore Rs. |

written by Detroit, September 11, 2010
written by I.V.SUBBA RAO, August 16, 2010
RAGHUVAMSI IRON ORE PELLETZATION TECHNOLOGIES (GREEN FIELD PROJECT) SEEKING FOR INVESTORS
GOOD MORNING, I am I.V. SUBBA RAO, I have developed advanced new technology, it is named as iron ore pellitization.. Still it is not introduced in India for small medium and major sponge iron manufacturing industries.
We are planning to set up 50 T.P.D Commercial production plant, its cost is 24 Cores, but we are not financially sound enough. We have applied for patent rights on JULY 2007, regarding this technology so many domestic and other country small scale sponge iron manufactures are contacting through mails and through phones. Lot of customers is interesting to utilize our technology, while before that they want to see the operation plant.
If I set up 50 TPD plant i.e., both ways it is like to pellet plant as well as commercial production plant. If any one help for us financial loan of Rs 24. 0 Cores (Indian currency). I will set up the plant as early as possible (6.0 to 9.0months).
After starting the commercial production we will start clearing ours loan immediately, other wise if want sponge iron material we will supply the material (just like barter system).
Through this technology small, medium and major sponge iron manufacturing industries (Karnataka, Orissa, Jharkand, Chatisgarh, West Bengal and Madhya Pradesh) can use this iron ore power easily. Because of this technology sponge iron and steel manufactures can get lot of marzines / profits, the Indian Sponge Iron /DRI Economic growth turn over gone up to 50,000 Cores per annum.
This product (fines using) is burning problem of India and aboard for sponge iron and steel manufactures. This is unique technology; I have received so many mails with in short time in India and abroad. If any one can give me an appointment I will meet you and explain all other details.
After starting the commercial production we will start clearing ours loan immediately, other wise if want sponge iron material we will supply the material (just like barter system).
But I can not show you any security like property or any other documents.
I am waiting for your early response.
PERSONNEL NOTE: - OUR PATENT IS UNDER PENDING.
Thanking you,
RAGHUVAMSI TECHNOLOGIES
Ho.No.14-5-11.
OPP.BATCHU SRI DEVI HOUSE
SHIVALAYAM STREET
PEDDAPURAM
PIN:-533 437
ANDHARA PREDESH
INDIA-533437.
MOB:-09490188826
written by Reuben Dantes, July 08, 2010
written by Jim Benson, June 14, 2010
written by Roy Sochan, June 10, 2010
I looked at the company and I see they are in Luxembourg with a couple of offices in other countries, such as Russia. Sow how could they help us in India?
written by Jim benson, June 05, 2010
written by Satish Pathak, April 01, 2010
written by Abhinav, March 22, 2010
written by animesh kumar, February 19, 2010
written by M A J Jeyaseelan, January 19, 2010
Every innovator has to protect his innovation while trying to get it funded. We therefore an independent commission which can arrange to evaluate technologies by pooling together relevant experts and getting technologies evaluated in camera with due non disclosure agreements in place.
Most of the time those who evaluate technologies on behalf of VCs or Govt Agencies are management or financial experts who have no idea of the commercial potential of new technologies
Also most technology evaluations are done mainly from a short term financial perspective.
A country that wishes to promote innovation must first learn to evaluate technologies from technology perspective first. This is where our promotional schemes are woefully inadequate.
While someone claiming to produce petrol out of water might get overnight publicity, there is no place where a genuine innovator can get his technology claims independently evaluated.
written by Abhinav, January 18, 2010
I had quit my job last year to pursue my entrepreneurial dream. Much of my savings have been spent on marketing studies for my venture and my parents are taking care of my expenses now.
I would like to ask the DARE magazine to put some more research before they actually write something about any such govt funding.
written by Bhavesh Bati, December 10, 2009
Thank You...
written by sandeep sharma, December 08, 2009
Second aspect is have you seen how do people work in such institutions - avoiding their sleep, working day and night, no holidays, no diwali or holi or christmas, 24X7 active, leaving their family but with utter motivation, nothing else. Though it is not to be mentioned but just to clear the clouds.
It is true that lack of fund has hampered many of the initiatives which could be pursued otherwise. But this is what it is. Only the pressure from knowledge society may sensitise Government towards knowledge holders and it will happen at any cost, if not now, maybe 5yrs, 10yrs down the line. Innovation and Inclusive development are the key towards a sustainable economy and every country needs to resort to these now or in future when more touch times are awaited.
written by anil k gupta, December 07, 2009
as regards innovations by NIF, i think the fact it has scouted through Honey bee network more ideas, traditional knowledge practices ( not all unique), innovations and children creativity than any other program in post independence history of the country ( in fact the world should hold it in good standing. But criticism on account of doling out small grants is valid and absolutely correct. keep it up
written by Vikram S Puri, December 06, 2009
Apart from the starting disadvantage of very low funding assistance, the process itself is mired in bureaucracy and babudom. An analysis of how many applications have been received, processed and accepted will reveal the true and correct picture.
Agencies like the Technology Development Board are best place to really jumpstart innovation in India but alas, see the implementation of their own policies as an impediment to their calm and ineffective existence.
Till the time the government can see its way to more transparency, more participation by private and ngo associations for industry and and interaction platform, these schemes will remain what they are today - peanuts for monkeys.
Its easy to criticise without offering a solution - here are some simple possibilities that can possibly be implemented without too much effort or rancor:
A clear policy, an example of previously funded projects and their track record published on the net, availability of members of the decision making committee for one-on-one meetings / video / internet conferences are some easy ways forward.
The Indian Entrepreneur has many things to contend with, many fires to fight and many hills to climb - it would help if the stepladders provided by the government were to be reliable, consistent and dependable.
written by A.S.Rao, December 05, 2009
written by M A J Jeyaseelan, December 05, 2009
What is clearly implied is that if you are an innovator, you must first think of an idea that can be commercialized within these funding limits. Are these people living in the real world. Do they know what it takes to develop, prototype, test and commercialize any innovative technology. No doubt, the schemes of the Department of Biotechnology seem more realistic. Does the country need innovative technologies only in the biotechnology sector. What about innovations in other sectors. Just because, we have already a few big companies operating in sectors like software, pharmaceuticals, etc. do we want to shut out innovations in these areas?
Look at the innovation database of the National Innovation Foundation. It is plain pathetic. I do not think anyone who looks at the database would ever be enthused to take up the innovation challenge.
As Ravi has pointed out all our innovation initiatives are a crying shame. Let me give you my own example. I have been working on a software innovation in the area of database technology for many years and finally managed to commercialize it last year. It has cost me about Rs. 2.5 Crore. I would spend about a crore more in the marketing exercise. Of course I believed in the power of my idea. So put all my Rs 35 Lakh of Provident Fund as the initial capital and then used commercial revenues earned from initial innovation to support follow up innovation activities.
I am not complaining. But the question the country must ask itself is : Should every innovator risk his life's savings to make innovations work.
written by Maj Gen Pinak Pani Das, December 05, 2009
contact at 01126124216 for inputs.
written by Ravi, December 04, 2009
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