IDEA FIRST CENTURY

FEATURES OF A GOOD BUSINESS IDEA

• Need
• Market size
• Entry barrier
• Scalability
• Process driven
TYPES OF FUNDING
 1.Own fund
• Founders can depend on themselves for seed
money or initial funding. In most cases the
initial seed money is collected through own
funds and through friends and relatives.
 2.Angel investment
• The process of investing funds into newly
formed business concern of any description
during its launching stage or first scale up is
called Angel investing. Most of the angel
investors purchase equity shares of potential
startup and exit at the time of first IPO. They
can be companies or individuals.
 3.Private equity and venture capital
(Structured funding).
• Private equity and venture capital companies
are specialized investors. Their capital is
formed from high net worth individuals,
pension funds, mutual funds etc. Venture
capitalists focus on scale ups and private
equity focus on reviving of sick companies.
These two groups in common are called
structured funding.
 4.Crowd funding 4 types.
• A . Debt based crowd funding.
Fixed percentage of returns. Most they are unsecured loans.
• B . Equity based crowd funding.
Funders get equity shares and dividends on their money.
• C . Reward based crowd funding.
Funders will provide money in advance for a product before making
that product. Eg Publishers of a book can get the cash in advance and
print the book for the customers.
• D . Donation based crowd funding.
Funders give money for a social cause and they don’t get returns on
their investment.
INCUBATION
 1.Definition
• The process of giving a physical space and
mentoring support for newly formed startup is
called business incubation. In some cases
funding is also included in incubation
programmers. Here the space is available at a
nominal rental amount.
 2.Major incubators in kerala.(KSUM,
LIVE, TBI)

• KERALA STARTUP MISSION

• Head office in kalamassery Cochin.
• Provides shared space for startups at nominal rent.
• Any registered company or a group of students of
educational institutions in kerala can participate in
KSUM idea contest.
• The promoters should pitch theîr idea before the panel
and can get monetary rewards.
IIMK LIVE

• The IIMK LIVE is the incubator in Indian Institute of

Management Calicut. The incubated startups will be
given a space for three years with a nominal rent in
side the IIM campus. The intake happens twice a year,
that is in June and December. Here the applicants
should submit an application online and should pitch
the idea before the concerned panel of professors. The
results of the pitching will be published later and
startup will be admitted if they get selected.
•
NITC TBI

• The NITC TBI is the incubator in National Institute of

Technology Calicut. The incubated startups will be
given a space for three years with a nominal rent inside
the NITC campus. The intake happens more than two
times a year according to number of applications. Here
the applicants should submit an application online and
should pitch the idea before the concerned panel of
professors. The results of the pitching will be published
later and startup will be admitted if they get selected.
INTERNATIONAL PLATFORM FOR INCUBATION – Y
COMBINATOR

• The Y Combinator is an international incubation and

seed funding platform for early stage startups based in
Silicon Valley, USA. They invest 150000 dollars twice a
year.
• Startups move to silicon valley for three months for
refinement of business models and pitching training is
given.
• After three months a Demo day will be conducted for
pitching before selected audience.
• Interviews are now carried out Banglore also.
 TYPES OF ORGANISATION

A . Sole proprietor
• Here a single person starts a business .
• Liability is unlimited.
• No auditing before the income tax slab.
B . Partnership

• At least 2 persons and at most 15 persons.

• Unlimited liability.
• Needs a head office.
• Partnership deed should be written in stamp
paper of Rs 5000.
• Will be audited below IT slab also.
C . Limited liability partnership
• At least 2 persons and at most 200 persons.
Persons.
• Limited liability only.
• Registration package of around Rs 25000.
• Needs a head office and have some limitation
in accepting Foreign direct investment (FDI).
D . Private limited company.
• At least 2 persons and at most 200 persons.
• More legal procedures.
• Registration package around Rs 25000.
• Limited liability for directors.
• Needs a registered office.
• Ignorance of directors is liable.
• Auditing is compulsory.
E . One person company (OPC).
• Only one person becomes director.
• At least 2 persons and at most 200 persons.
• More legal procedures.
• Registration package around Rs 25000.
• Limited liability for director.
• Needs a registered office.
• Ignorance of director is liable.
• Auditing is compulsory.
partnership, llp, pvt ltd, Opc.
 IDEA VALUATION AND COMPANY
VALUATION
• If an innovative idea is identified it can be
converted into monetary terms.
• This is done by taking into account.
• Total market size.
• Scalability.
• Entry barrier.
• Possibility of disruptive models
• ROADMAP TO IPO.
• This includes a description of how the growth
of the company would occur before the first
IPO. That means the investors expect a hike in
value of their shares after a particular period.
IPO roadmap include plans of executions of
the company to attain this share value.