​As we embrace the ever-evolving dynamics of the financial world, it's noteworthy to highlight the imminent changes in IPO listing rules. The winds of transformation are sweeping through, ushering in a new era for companies seeking public offerings. The revised IPO rules promise to bring enhanced transparency, investor protection, and efficiency in the listing process. Before we take a look at the changes, we should analyze the reasons behind them: Mandatory T+3 listing would directly help HNIs (High Networth Individuals) clients opting for IPO listing as they will experience a sizable reduction in Interest Payments duration, with the duration coming down from 7 days to a mere 4 days now. Exciting times lie ahead, and together, we'll navigate this transformative journey in the world of IPOs! Let’s explore the changes that have come into effect from December 1, 2023 &amp; the impact it would have on investor sentiment: ​

The revised IPO rules promise to bring enhanced transparency, investor protection, and efficiency in the listing process.

SEBI latest rules for IPO Investors!

​Decode: 28% GST on the Online Gaming Industry and Its Impact 📢 In August 2023, the GST council approved a 28% GST rate on online gaming, casinos, and horse racing. Now apart from the 28% GST tax, the other key thing to understand here is “online gaming’- which has created great confusion among the investor community, gamers, media houses, etc. The 28% GST is only levied on real-money gaming which mainly includes poker, slot machine or casino table games, lottery, sports betting, sports wagering, bingo, and fantasy sports, against which a player gets an opportunity to receive the payment of cash or anything else that can be redeemed for cash or cash equivalents. In this post, we'll explore how the 28% GST tax policy shift is making waves and its impact on both players and the gaming ecosystem as a whole. Get ready for a closer look at the evolving landscape of one of India's most dynamic industries. Discover the implications of the 28% <a href="https://www.linkedin.com/feed/hashtag/?keywords=gst&amp;highlightedUpdateUrns=urn%3Ali%3Aactivity%3A7105455645725720576">hashtag#GST</a> rate on India's booming online gaming sector.​

the GST council approved a 28% GST rate on online gaming, casinos, and horse racing. Now apart from the 28% GST tax, the other key thing to understand here is “online gaming’

​Decode: 28% GST on the Online Gaming Industry and Its Impact 📢

​In the dynamic world of business and innovation, stories of reinvention and evolution often take center stage. One such tale is that of <a href="https://www.linkedin.com/in/ACoAADxrehUBH0qNW57jpCyaxrEl4V-Uvq3Uyis" target="_self"></a><a href="https://www.linkedin.com/in/suniel-shetty/" id="ember39">Suniel Shetty</a>, a name synonymous with Bollywood glamour, who has carved a distinct niche for himself as a stalwart in the startup ecosystem. Sunil Shetty, with his iconic roles in Indian cinema, has been a beloved figure in the entertainment industry for decades. Over 30 years of breathtaking performances on the silver screen across over 130 films, his on-screen charisma, action-packed performances, and versatility as an actor endeared him to audiences of all ages. However, what sets him apart in today's landscape is not just his cinematic achievements but his influential presence and impact in the startup world. Shetty's foray into the startup ecosystem is marked by his role as a brand ambassador for several startup associations. His involvement extends beyond mere endorsements; he has wholeheartedly embraced the startup culture, actively supporting and promoting over 44 innovative ventures. This transition from the glitzy world of Bollywood to the cutting-edge realm of startups is a remarkable transformation, showcasing his adaptability and forward-thinking attitude. Let's delve into the fascinating journey of Suniel Shetty as an angel investor, exploring the startups he's been associated with and the influence he wields in this thriving entrepreneurial landscape. ​

Shetty's foray into the startup ecosystem is marked by his role as a brand ambassador for several startup associations.

Notable Investment by Suniel Shetty

Urban Tots (UT), a Planify’s portfolio company has truly put the pedal to the metal in FY23 after achieving +ve margins. a) Financials: UT, the toy manufacturing company, have achieved a remarkable growth of ~202.83% growth in revenue, i.e Rs. 49.2cr in FY23 and achieved profitability of ur on account of strong book value, the new acquisition of customers and expansion of product base. b) EPS: The EPS has increased from 0.49 to 0.76, representing management’s intentional decisions to create wealth for shareholders. On a unit level, it spent Rs 0.84 to earn a rupee of operating revenue. c) Strong pipeline: The company has a strong order book value worth &gt;Rs. 750cr that needs to be delivered in the next 4-5 years. The continuous expansion of the product base, increasing penetration to overseas, and constant focus towards maintaining quality have opened multiple avenues for the company. The company has a notable customer base ranging from Hamely’s to IOC. d) Future Plans: Remarkable growth and lean cost structure helped UT move into the black. With robust demand driving its success, UT aims to scale its business, to a projected Rs. 100cr. in FY24.

Sky is the limit: Remarkable performance of Urban Tots FY23

VCI Chemical Industries Pvt Ltd signs contract for design, engineering, supervision, training and supply of equipment with ACRE Coking & Refractory Engineering Consulting Corporation (DALIAN), MCC for Greenfield coal Tar Distillation Plant (Kalinganagar, Orissa) along with auxiliary facilities.

What is Angel tax:&nbsp; India has emerged as the&nbsp;3rd largest ecosystem for start-ups globally along with India is now the&nbsp;3rd largest economy in the Asia-Pacific region and the 5th largest in the world. Hence any change in regulations/laws directly or indirectly impacts the world.&nbsp; Recently, the Income Tax Department has issued new angel tax regulations, including a system for assessing the shares that unlisted start-ups offer investors.The Income Tax Act of 1961's Section 56 (2) (viib) discusses the concept of angel tax. According to the Finance Act, 2012, in the IT Act, every start-up (i.e., unlisted companies whose shares are not available for buying on the stock market) that receives funding from an angel investor must contribute a certain amount to the government. However, this tax comes into the picture if the total investment value exceeds the company's FMV (Fair Market Value). If the raised funds are greater than FMV, then it will be categorised as income for the start-up and subject to income tax under the category of "income from other sources", and the tax imposed on it is called angel tax.&nbsp; Let us consider it with an example. Suppose a start-up receives an investment from an angel investor of Rs 15 crore, and the investor gets shares in exchange. However, the total fair market valuation (FMV) of the shares issued is Rs 10 crore. The remaining Rs 5 crore is considered excess money and, therefore, taxable at a rate of 30.9%.&nbsp;

​Changes in the previous tax regulation Earlier, the angel tax applied to the funds raised by residents of India, however in the new regulation – the same is also applicable to foreign investors.The excess investment, by domestic and foreign investors, is considered as ‘income from other sources’ and the government levies an ‘Angel Tax’ on it since it primarily affects <a target="_blank" href="https://www.planify.in/angel-investing/">angel investors in start-ups</a>. Exceptions:&nbsp;&nbsp;&nbsp;<ol><li>Type of Investors:&nbsp;Not all foreign investors are eligible for the angel tax. The exemptions have been provided to below listed classes of foreign investors:</li></ol>a)&nbsp; &nbsp;Government-related investors, like central banks, sovereign wealth funds, and global or multilateral organisations or where ownership of the government is 75% or more. b) banks or organisations in the insurance business;&nbsp; c) Entities registered with SEBI Registered Category-I FPIs, specific categories of endowment and pension funds. d)&nbsp; Broad-based pooled funds with 50 or more investors that are not a hedge fund or a fund that employs complex trading strategies.&nbsp; e)&nbsp; Investors from 21 countries have been exempted: Australia, Singapore, Germany, Japan, Korea, the UK, and the US among others.&nbsp; 2. The government-recognized start-up:&nbsp;Foreign investors are not required to pay any angel tax while investing in a government-recognized (Department for Promotion of Industry and Internal Trade - DPIIT registered) start-up in India.​All that a start-up needs to do is apply for eligibility to DPIIT along with necessary documents and returns which will then be sent to CBDT (Central Board of Direct Taxes) for final approval. The CBDT reserves the right to decline the exemption status for a company.Now, according to the revised rules, the companies need to meet certain requirements to be eligible for the exemption-<ol><li>As per earlier rules, the exemption from angel tax was for companies with turnover up to Rs 25 crores, but as per new rules, the exemption limit has been extended to companies with turnover less than Rs 100 crores and those companies should be less than 10 years old.&nbsp; &nbsp; </li><li>If the aggregate amount of paid-up share capital and share premium of the firm after the issue or proposed issue of shares doesn't exceed Rs 25 crore. This means that small-scale angel investors who invest under Rs 25 crore in start-ups are exempted from the tax.&nbsp; </li><li>Further, investments made by listed companies with a net worth of at least ₹100 crore or a total turnover of at least ₹250 crore will be fully exempt from the tax; so will investments made by non-resident Indians.&nbsp;&nbsp; </li><li>Also announced that start-ups will not be required to present the fair market value of their shares issued to certain investors including Category-I Alternative Investment Funds (AIF).</li></ol> Changes in the valuation Methodology: Now, the next question arises how is this tax calculated?&nbsp;&nbsp; Earlier, CBDT prescribed the below-mentioned methodologies for the valuation of equity shares and preference shares under Rule 11 UA of the Income Tax Rules 1962 for the issuance of shares to Resident investors:<ol><li>For Equity Shares: Discounted free cash flow method and Adjusted Book Value method and </li><li>For Preference Shares:Any internationally accepted valuation method </li></ol>However, recently,&nbsp;The CBDT notified amendments to Rule 11 UA of the Income Tax Rules 1962, for the valuation of the equity shares and compulsorily convertible preference shares (“CCPS”) for angel tax provisions with effect from&nbsp;25th September 2023. a) Adjusted Book Value Method: This method retains its previous formula without any changes. b)&nbsp;DCF Method:&nbsp;Under this approach, fair value is calculated using the Discounted Cash Flow (DCF) method, with a valuation report obtained from a Merchant Banker. This is also similar to the earlier formula without any changes. However in the case of preference shares earlier, the valuation using the DCF method could also have been carried out by a Chartered Accountant. As per the amended rules, valuation can only be carried out by a Merchant Banker. c)&nbsp;Venture Capital Scenario:&nbsp;Shares may be valued at the same price at which a Venture Capital Undertaking raised funds from a Venture Capital Fund, Venture Capital Company (VC), or an Alternative Investment Fund (AIF), provided the total consideration received from the new investor does not exceed the total consideration received from VC/AIF.A maximum gap of 90 days is allowed between the valuation of shares and their issuance to such VC or AIF. d) Comparable Company Multiple, Probability-Weighted Expected Return, Option Pricing, Milestone Analysis, or Replacement Cost Method:&nbsp;Valuation under this method is conducted based on a report from a Merchant Banker. These methods are internationally accepted <a target="_blank" href="https://www.planify.in/valuations/">valuation methodologies</a> and are widely used. e)&nbsp;Notified Entity Scenario: Shares can be valued at the same price at which the company received funds from a notified entity. Similar to method (C), a maximum gap of 90 days is permissible between the valuation and issuance to such notified entity. Fair Market Value of Unquoted Equity Shares <ol><li>Consideration received from Resident -&nbsp;Method (a), (b),(c), &amp; (e)is used to determine the value at the option of assesses. </li><li>Consideration received from Non-Resident -&nbsp;Method (a) to (e) is used to determine the value at the option of the assessee. When a company receives any consideration for the issue of shares from a non-resident entity notified by the Centre, the price of the equity shares corresponding to such consideration may be taken as the (FMV of the equity shares for resident and non-resident investors. On similar lines, price matching for resident and non-resident investors will be available concerning investment by venture capital funds or specified funds.&nbsp;</li></ol>​Fair Market Value of Convertible Preference Shares (CCPS): a) Method (b), (c), &amp; (e) of the above-listed methods is available at the option of the assessee or based on FMV of equity share determined based on Method (a), (b), (c), &amp; (e) at the option of assesses where the consideration received from Resident. b) Method (b) to (e) of the above-mentioned methods is available at the option of the assessee or based on FMV of equity share determined based on Method (a) to (e) at the option of the assessee where the consideration received from non-Resident.

‘Safe harbour’ provision - Threshold of 10% For CCPS or Unquoted Equity Shares, where the issue price of the shares exceeds the value of shares as determined by:&nbsp;​<ol><li>Method (a) or Method (b),&nbsp;for consideration received from a resident, by an amount not exceeding 10% of the valuation price, the issue price will be FMV of such shares. </li><li>Method (a) Method (b) or Method (d), for consideration received from a non-resident, by an amount not exceeding 10% of the valuation price, the issue price will be FMV of such shares.</li></ol>​Role of the Assessing Officer (AO) 56(2)(viib) clearly states that the FMV shall be the&nbsp;higher of: a) Value as per NAV or DCF (Rule 11UA(2))ORb) Value to the satisfaction of the AO based on the value of the company as of the date of issue of shares It is clear from the first reading that in case the AO is unsatisfied with the assumptions used to compute the valuation or believes the value to be lower,&nbsp;the disjunctive OR allows for the higher value to be the Fair Market Value (FMV).​Ideally, the Assessing Officer should not have the discretionary power&nbsp;to disregard&nbsp;a valuation acceptable to the entrepreneurs and a group of sophisticated investors and arrived at by a professional in the form of a qualified Chartered Accountant or a Category I Merchant Banker.&nbsp;Many start-ups have faced a challenge whereby the AO takes the lower value as the FMV and taxes the entire premium as income in the hands of the companies. This results in the law not being fully enforced, leading to consistent bias against the companies. Do you know, that in 2018, more than 2000 start-ups received a legal tax order via MCA against the share premiums?&nbsp; Pros:&nbsp; a) Inclusion of more methods of valuation to give flexibility to the assessee and the Valuers b) A safe harbour of 10% variation in valuation price and issue price is acceptable. c) Earlier the valuation rules required the valuations to be carried out on the date of the transaction which was practically impossible to comply with. However, as per new regulation, the valuation date for issuance of the report can be considered up to 90 days, before the issuance of shares, which is in line with the requirement of FEMA Regulations d) In the case of investment by venture capitalists, the price negotiated by <a target="_blank" href="https://www.planify.in/venture-fund/">venture capital</a> investors may be considered an acceptable price. This is the significant positive step where the transaction involves registered / sophisticated investors negotiating price acts as the base of valuation. Cons: <ul><li>&nbsp;Funds received from non-residents may be subject to tax in case valuation is rejected by the Assessing officer and big negative for the investor community.</li><li>​Increased compliance burden and risk on amounts received from non-residents.</li><li>Not in line with Government policy for ease of doing business</li><li>Multiple valuers and multiple reports for the same transaction as different laws recognise different valuers, ie. Companies Act recognises only Registered Valuers as Valuers and Income Tax recognises only Merchant Bankers as Valuers.</li><li>Different requirements for resident and non-resident investors and thus increasing complexity of regulations</li></ul> Conclusion: It is worth noting that out of the $10 Bn of investment into the Indian start-up ecosystem in 2022, only 10% of it came from domestic investors. The recent regulations raise a question about the viability of the inspirational start-up initiatives launched by the company such as Make in India and Start-up India. Hence, the regulations or laws levied by the government should be conducive to the start-up ecosystem.&nbsp;.

India has emerged as the 3rd largest ecosystem for start-ups globally along with India is now the 3rd largest economy in the Asia-Pacific region and the 5th largest in the world. Hence any change in regulations/laws directly or indirectly impacts the world.  Recently, the Income Tax Department has issued new angel tax regulations, including a system for assessing the shares that unlisted start-ups offer investors.

Angel tax In India: Blessing in Disguise or Bane for start-ups?

In a resolution passed on November 23, 2023, IXIGO's Board of
 Directors has granted preliminary approval for the company to pursue an initial
 public offering (IPO) of its equity shares. The IPO could include a fresh
 issuance of equity shares and/or an offer for sale of equity shares by eligible
 existing shareholders of the Company. The final structure and size of the IPO
 will depend on market conditions, regulatory approvals, and other factors. For
 more details, please refer to the attached note.

IXIGO's IPO expected to come by the end of January 2024

IXIGO Greenlights Initial Public Offering (IPO)

Thе Indian startup ecosystem witnеssеd a wееk of modеratе funding activity, as 12 dеals wеrе announcеd, amounting to $159 Mn till H12023.&nbsp; Thе wееk also saw some interesting trends and developments, such as thе dominancе of thе е-commеrcе sеctor, thе traction of sееd funding, and thе еmеrgеncе of nеw vеrticals.&nbsp; Thе dеals comprisеd four growth-stagе dеals grabbing $131.75 million, and 19 еarly-stagе dеals contributing $68.9 million. Growth stagе Dеals Ovеr thе wееk, thrее startups in thе growth stagе got funding. Logistics company Xprеss Bees was at thе forеfront, raising a substantial $80 million. Thе latеst unicorn, Zеpto, followеd suit, sеcuring $31.25 million in an еxtеndеd funding round. Additionally, Eulеr Motors, specializing in thrее-whееlеr еlеctric vеhiclеs, and GoMеchanic, an automobilе sеrvicе and rеpair company, sеcurеd $14.5 million and $6 million, respectively. Early stagе Dеals&nbsp; In the еarly-stagе dеals, Bharat Housing Nеtwork, a tеch platform facilitating co-lеnding in affordablе housing, sеcurеd a notеworthy $14.5 million in its Sеriеs A funding round. Joining thе funding brigadе, 3D dеsigning startup Snaptrudе amassеd $14 million. Thе list of firms making wavеs in this arеna also fеaturеs thе likеs of Sеqurеtеk, Hеarzap, Stackr Labs, Vaarее, Bimaplan, and othеrs.<div class="se-component se-image-container __se__float-center" contenteditable="false"><figure style="width:50%; height:auto;"><img alt="" data-align="center" data-file-name="Screenshot_20231116_113702_Instagram copy.jpg" data-file-size="287234" data-origin="," data-percentage="50," data-proportion="true" data-rotate="" data-size="50%," origin-size="1080,1088" src="https://testing-planify.s3.amazonaws.com/sun_editor/9fddb457-c161-419e-a463-6d617601754f_image.png" style="width:100%; height:auto;"/></figure></div> Anothеr Insight as pеr thе rеport of Entrackr, Thе е-commerce sector sеcurеd thе highest amount of funding this wееk, with four dеals worth $86.8 Mn. Thе largеst deal of thе wееk was raised by Xprеssbееs, a logistics sеrvicе providеr for е-commеrcе companiеs, which sеcurеd $80 Mn in its Sеriеs E round lеd by Invеstcorp, Norwеst Vеnturе Partnеrs, and Gaja Capital. Thе company plans to usе thе funds to еxpand its nеtwork, еnhancе its tеchnology, and launch nеw sеrvicеs.&nbsp; Anothеr notablе dеal in thе е-commеrcе spacе was raised by Zеpto, a hypеrlocal grocеry dеlivеry platform, which baggеd $31.25 Mn in its Sеriеs A round lеd by Lightspееd India Partnеrs and Matrix Partnеrs India. Thе startup aims to usе thе funds to scalе up its opеrations, strеngthеn its tеam, and invеst in tеchnology.

​<div class="se-component se-image-container __se__float- __se__float-center" contenteditable="false"><figure style="width:50%; height:auto;"><img alt="" data-align="center" data-file-name="AG6Ihb1pWpmj5Hk7Wni5prfW7Db7L5_etHvxgVcVvhMiIRbkHSlBTaTi3F6sWv9nO8xCXaNZWmSXKSVPX8_qhg73r7gLdHGmj3yZ2RUC_RBR4Sh1rC7oF6CjLvBRsIlwRpHJtZIsci4UBsAdh6I81PQ" data-file-size="0" data-origin="auto,auto" data-percentage="50," data-proportion="true" data-rotate="" data-size="50%," origin-size="1080,1076" src="https://lh7-us.googleusercontent.com/AG6Ihb1pWpmj5Hk7Wni5prfW7Db7L5_etHvxgVcVvhMiIRbkHSlBTaTi3F6sWv9nO8xCXaNZWmSXKSVPX8_qhg73r7gLdHGmj3yZ2RUC_RBR4Sh1rC7oF6CjLvBRsIlwRpHJtZIsci4UBsAdh6I81PQ" style="width:100%; height:auto;"/></figure></div>​Thе wееk also saw somе nеw vеrticals еmеrging in thе Indian startup landscapе, such as cybersecurity and automotivе sеrvicеs. Sеqurеtеk, a cybеrsеcurity startup that offers еnd-to-еnd solutions for еntеrprisеs, raisеd $8 Mn in its prе-Sеriеs B round lеd by Iron Pillar and Chirataе Ventures. Thе startup plans to usе thе funds to scalе up its businеss, еntеr nеw markеts, and launch nеw products.&nbsp; GoMеchanic, an automotivе sеrvicе providеr that offеrs onlinе booking, doorstеp pickup and dеlivеry, and transparеnt pricing, raisеd $6 Mn in its Sеriеs B round lеd by Sеquoia Capital India and Orios Vеnturе Partnеrs. Thе startup plans to usе thе funds to еxpand its nеtwork, incrеasе its customer basе, and improvе it's tеchnology. The seed funding stagе also gainеd traction this wееk, as thrее dеals worth $3.9 Mn wеrе announcеd. Thе lаrgеst sееd deal of thе wееk was raisеd by Eulеr, a fintеch startup that offеrs crеdit cards for frееlancеrs and small businеssеs, which raisеd $14.4 Mn from Accеl, Matrix Partnеrs India, and othеr invеstors.&nbsp; Thе startup plans to usе thе funds to launch its product, grow its tеam, and build partnеrships. Anothеr intеrеsting sееd dеal was raisеd by Vaaraa, a social commerce platform that connects rural women еntrеprеnеurs with urban customеrs, which sеcurеd $4 Mn from Sеquoia Capital India’s Surgе and othеr invеstors. . The startup aims to usе thе funds to еmpowеr morе rural women, еnhancе its tеchnology, and еxpand its product portfolio.

​<div class="se-component se-image-container __se__float- __se__float-center" contenteditable="false"><figure style="width:50%; height:auto;"><img alt="" data-align="center" data-file-name="JDXJGJxWfxNzbFzJKDWfReH9ck1OqMbJpUS-rsJQ2iz6Re84i3hnvMavvZVB3nyVTm-ZqgvH2RtAFPQ9mSPqGvB9PInNyN7_NIS1lkIJ5ronYnILpf_D3lKOYnlGkcoOxQdRKm_wS-TWQqawYhSkYMg" data-file-size="0" data-origin="auto,auto" data-percentage="50," data-proportion="true" data-rotate="" data-size="50%," origin-size="1080,1088" src="https://lh7-us.googleusercontent.com/JDXJGJxWfxNzbFzJKDWfReH9ck1OqMbJpUS-rsJQ2iz6Re84i3hnvMavvZVB3nyVTm-ZqgvH2RtAFPQ9mSPqGvB9PInNyN7_NIS1lkIJ5ronYnILpf_D3lKOYnlGkcoOxQdRKm_wS-TWQqawYhSkYMg" style="width:100%; height:auto;"/></figure></div>Thе Indian startup funding landscape continues to еvolvе rapidly despite thе challenges posed by thе COVID-19 pandеmic. According to a rеport by Inc42, Indian startups raisеd $25 Bn in funding in 2022, a dеclinе of 40% from $42 Bn raisеd in 2021. Howеvеr, thе rеport also highlights somе positivе trеnds, such as thе increase in sееd and bridgе funding, thе risе of еmеrging startup hubs, and thе growth of thе unicorn club.&nbsp;

Thе Indian startup ecosystem witnеssеd a wееk of modеratе funding activity, as 12 dеals wеrе announcеd, amounting to $159 Mn till H12023.  Thе wееk also saw some interesting trends and developments, such as thе dominancе of thе е-commеrcе sеctor, thе traction of sееd funding, and thе еmеrgеncе of nеw vеrticals.

Weekly Funding Insights

<div class="se-component se-image-container __se__float- __se__float-center" contenteditable="false"><figure style="width:50%; height:auto;"><img alt="" data-align="center" data-file-name="TcWPXHyWC4DEdPOgYw_Cjd8GGONuEIZvGAv1I9zRxPfiFZnQMYnirKrZJTjjcYri5O3_oTcIruL44YHicf5FTJgyJ1p9spsPwzxtAca5GFC6ELbAbEtzd3yXWdpGNhU-CNil1yj7UTMkY5rLzzRa29o" data-file-size="0" data-origin="auto,auto" data-percentage="50," data-proportion="true" data-rotate="" data-size="50%," origin-size="862,630" src="https://lh7-us.googleusercontent.com/TcWPXHyWC4DEdPOgYw_Cjd8GGONuEIZvGAv1I9zRxPfiFZnQMYnirKrZJTjjcYri5O3_oTcIruL44YHicf5FTJgyJ1p9spsPwzxtAca5GFC6ELbAbEtzd3yXWdpGNhU-CNil1yj7UTMkY5rLzzRa29o" style="width:100%; height:auto;"/></figure></div> According to thе rеport Indian Startups funding H1-2023 by Entrackr, This piе chart illustrates the distribution of dеals across diffеrеnt stagеs of funding in H1 2023. Thе majority of thе dеals (218) wеrе іn thе early stages of seed and prе-sееd funding, which togеthеr accountеd for morе than 40% of thе total dеals. Thе nеxt most common stagе was Prе Sеriеs A, with 75 dеals, followеd by Sеriеs A, with 83 dеals. Thе growth stagе dеals, which includеd Sеriеs B, C, and D, had 53 dеals in total.&nbsp; How to Choose the Right Type of Capital for Your Startup? The right type of capital for your startup depends on various factors, such as: Stage of development: Different types of capital are more suitable for different stages of your startup journey. For example, grants and angel investors are more common for early-stage startups, while VCs and banks are more common for later-stage startups. Funding needs: Different types of capital can provide different amounts of money and have different costs and risks. For example, equity financing can provide more money and have lower costs and risks than debt financing, but it also requires giving up more ownership and control. Growth potential: Different types of capital have different expectations and returns on their investment. For example, VCs and corporate challenges are more interested in startups that have high growth potential and can generate large profits or impact, while NBFIs and government loan schemes are more interested in startups that have steady cash flow and can repay their debt. ​Best Practices&nbsp; for Raising Capital​ Raising capital is not an easy task, and it requires a lot of planning, preparation, and persistence. Here are some of the best practices and tips for raising capital for startups: <div style="text-align: justify">​Know your needs and goals:&nbsp;&nbsp;Before seeking capital, you should have a clear idea of how much money you need, what you need it for, and what you want to achieve with it. You should also have a realistic and detailed budget, timeline, and milestones for your startup. This will help you determine the best source of capital for your startup, and how to pitch and negotiate with potential funders.</div>​ Know your alternatives: You should also research and explore the different sources of capital available for your startup, and compare their pros and cons. You should also consider the trade-offs and implications of each source of capital, such as the cost, risk, control, and value. You should also have a backup plan and a contingency fund in case your primary source of capital fails or falls short. ​Know your market and customers: You should also have a deep and thorough understanding of your market and customers, and how your product or service solves their problem or meets their need. You should also have a clear and compelling value proposition, competitive advantage, and growth strategy for your startup. This will help you demonstrate and validate the potential and viability of your startup, and how you can generate revenue and profit. ​​Know your team and partners: You should also have a strong and diverse team and partners for your startup, and how they contribute to your vision and mission. You should also have a clear and effective communication and collaboration system for your startup. This will help you build and maintain trust and credibility with your funders, and how you can execute and deliver your product or service.​ Know your funders and investors: You should also have a targeted and customized approach for each funder or investor you approach, and how you can align your goals and interests with theirs. You should also have a clear and concise pitch deck, business plan, and financial model for your startup, and how you can answer their questions and concerns. You should also have a clear and fair valuation, term sheet, and exit strategy for your startup, and how you can negotiate and close the deal.

Conclusion Startup capital is essential for launching and growing a new business, but it is not easy to obtain. Entrepreneurs need to consider the different sources and methods of raising money, and weigh the pros and cons of each option. They also need to have a clear and compelling business plan, a realistic and achievable budget, and a strong and convincing pitch. By doing so, they can increase their chances of getting the startup capital they need, and turn their idea into a successful venture. With a substantial dry powder reserve exceeding $18 billion as of December 2022, investors are treading carefully. This caution stems from the possibility of down rounds, where financings occur at lower valuations than before. The changing fortunes of Indian startups highlight the need for a strategic and resilient approach to fundraising.

Starting a new business is an exciting and challenging endeavor, but it also requires a lot of money. Entrepreneurs need startup capital to fund their initial expenses, such as product development, market research, inventory, office space, hiring, and marketing. Without enough startup capital, a business may fail before it even launches.

How do Startups Get Capital: A Guide for Entrepreneurs

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