PROJECT REPORT

[Submitted for the Degree of B.Com. Honours in

Accounting and Finance under the University of Calcutta]

ANGEL TAX ON STARTUPS

Submitted by
Name of the Candidate: SUBHAM GOEL
Registration No.: 017-1121-1158-16
Name of the College: The Bhawanipur Education Society College
Roll No. :1017-61-1091

Supervised by
Name of the Supervisor: PROF. PRITI MODI
Name of the College: The Bhawanipur Education Society College

February 2019

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Annexure- IA
Supervisor’s Certificate
This is to certify that Mr. SUBHAM GOEL a student of B.Com. Honours
in Accounting & Finance of The Bhawanipur Education Society
College under the University of Calcutta has worked under my
supervision and guidance for his Project Work and prepared a Project
Report with the title ANGEL TAX ON STARTUPS which he is
submitting, is his genuine and original work to the best of my knowledge.

Signature
Place: Name:
Date: Designation:
Name of the College

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Annexure- IB
Student’s Declaration
I hereby declare that the Project Work with the title ANGEL TAX ON
STARTUPS submitted by me for the partial fulfilment of the degree of
B.Com. Honours in Accounting & Finance under the University of
Calcutta is my original work and has not been submitted earlier to any
other University/ Institution for the fulfilment of the requirement for any
course of study.
I also declare that no chapter of this manuscript in whole or in part has
been incorporated in this report from any earlier work done by others or
by me. However, extracts of any literature which has been used for this
report has been duly acknowledged providing such literature in the
references.

Signature
Name:
Address:
Registration No.
Place:
Date:

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 ACKNOWLEDGEMENT

Preparation of this project has indeed been a great learning experience and has been
a very enriching exercise in my academic life.
I would like to heartily thank The Bhawanipur Education Society College,
Kolkata that has given me the opportunity to learn something extraordinary at this
under graduation level. It has provided us the opportunity to undertake practical
training, which I personally believe to be the most important aspect of the academic
program.
I would like to express my heartfelt gratitude to my project guidance teacher, PROF.
PRITI MODI, who has played a crucial role in completion of this project by giving
me the valuable inputs and feedback from time to time and further supported me to
complete this project.
Many people, especially my classmates have made valuable comment suggestions
on my project which gave me an inspiration to improve the quality of the assignment.
Nevertheless, I express my gratitude towards our families and peers for their kind
co-operation and encouragement which helped me in completion of this project.

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 Contents

Sr No. Particulars Page No.

1. Chapter 1: Introduction
1.1 Background 6
1.2 Research Methodology 7
1.3 Need for the Study 8
1.4 Objective of Research 8
1.5 Literature Review 9
1.6 Limitations of the Study 10

2. Chapter 2: Conceptual Framework

2.1 National Scenario 12-14

2.2 International Scenario 15-16

Chapter 3: Presentation,Analysis &

3. Findings
3.1 Findings and Discussions 17-25
3.2 Analysis 25-30

Chapter 4: Conclusion,Recommendations
4. & Bibliogrphy 31-35

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 CHAPTER 1 :

INTRODUCTION
1.1 BACKGROUND

Angel tax is a term used to refer to the income tax payable on capital raised by unlisted
companies via issue of shares where the share price is seen in excess of the fair market value of
the shares sold. The excess realization is treated as income and taxed accordingly. The tax was
introduced in the 2012 Union Budget by then finance minister Pranab Mukherjee to arrest
laundering of funds. It has come to be called angel tax since it largely impacts angel investments
in startups.

Simply put, the angel tax is a 30.9 % tax levied on investments made by external investors in
startups or companies. To clarify, the entire investment is not taxed – only the amount that is
considered above “fair value” valuations of the startup, classified as ‘income from other sources’
in the Income Tax Act of India. The problem arises because startups are often valued subjectively
on the basis of discounted cash flows, without taking into account intangibles like goodwill. This
can cause differing interpretations of “fair value” and leave startups vulnerable to unduly high
taxes because the taxman feels the investment is too high over their valuation.

The angel tax dates back to the Finance Budget of 2012 when then finance minister Pranab
Mukherjee announced the introduction of the Finance Act 2012. The taxation is a major thorn in

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the side for many ventures and has forced many angel investors to shy away from offering financial
support to startup dreams.

ANGEL INVESTOR
An angel investor (also known as a business angel, informal investor, angel funder, private
investor, or seed investor) is an affluent individual who provides capital for a business start-up,
usually in exchange for convertible debt or ownership equity. A small but increasing number of
angel investors invest online through equity crowdfunding or organize themselves into angel
groups or angel networks to share investment capital, as well as to provide advice to their portfolio
companies.

1.2 RESEARCH METHODOLOGY

The research is qualitative and deductive. “Qualitative data refers to all nonnumeric data or data
that have not been quantified and can be a product of all research strategies”. The deductive
approach refers to the development of a clear theoretical position prior to the collection of data. In
this study, theoretical chapters are introduced first and then followed by an analysis of qualitative
data. Secondary data is obtained from various literature sources including news, business journals,
academic articles, statistics, databases, official websites.

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 The current study aims to provide an overall picture of the business angel market in India, with a
particular focus on evaluating the impact of business angels and their potential contribution to
reinforcing Research and Innovation (R&I). In order to achieve this objective, the study
methodology followed a four-step process:
 Definition and development of the key research instruments - survey and interview format and
guidelines, agreements with national authorities on producing the special statistical analysis based
on the statistical data available;
 Establishment of a comprehensive information base – application of appropriate data collection
methods and instruments;
 Analysis of the database and presentation of the results;
 Presentation of the study findings - including conclusions and recommendations.

1.3 NEED FOR THE STUDY

The aim of a studies idea is to present and justify the want to look at a studies hassle and to give
the practical methods in which the proposed study must be conducted. The design elements and
processes for engaging in the research are governed by means of standards in the predominant area
in which the problem resides, so tips for research proposals are more exacting and less formal than
a popular mission notion. Research proposals include significant literature evaluations. They ought
to offer persuasive evidence that a need exists for the proposed examine. In addition to providing
a purpose, a proposal describes specific method for conducting the research steady with necessities
of the professional or instructional subject and a announcement on anticipated outcomes and/or
advantages derived from the observe's finishing touch.

1.4 OBJECTIVE OF RESEARCH

The objective of this research is to help the reader to

understand different startup financing sources, especially angel funding. Also, an up-to-date and
comprehensive analysis on the business angel industry and the problematic situations faced by
them.

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1.5 LITERATURE REVIEW
The application of the term "angel" to a kind of investor originally comes from Broadway theater,
where it was used to describe wealthy individuals who provided money for theatrical productions
that would otherwise have had to shut down. In 1978, William Wetzel, then a professor at the
University of New Hampshire and founder of its Center for Venture Research, completed a
pioneering study on how entrepreneurs raised seed capital in the USA, and he began using the term
"angel" to describe the investors who supported them. A similar term, "patron," is commonly used
in arts.

Angel investors are often retired entrepreneurs or

executives, who may be interested in angel investing for
reasons that go beyond pure monetary return. These
include wanting to keep abreast of current developments in
a particular business arena, mentoring another generation
of entrepreneurs, and making use of their experience and
networks on a less than full-time basis. Because
innovations tend to be produced by outsiders and founders
in startups, rather than existing organizations, angel
investors provide, in addition to funds, feedback, advice
and contacts. Because there are no public exchanges listing
their securities, private companies meet angel investors in
several ways, including referrals from the investors' trusted
sources and other business contacts; at investor conferences and symposia; and at meetings
organized by groups of angels where companies pitch directly to investor in face-to-face meetings.

In order to highlight possible risks and opportunities Business angels possess the understanding of
their core principles is vital. One of the plainest definition runs, angel investors to be wealthy
investors who provides capital for new business ventures. As Farlex Financial Dictionary explains,
angel is a high net worth individual who provides financing to a start-up, either in exchange for
convertible debt or equity. Among start-ups, they are thought of as a bridge between loans from
family and friends and venture capital, though angels are themselves often personally connected
to the business. As it was fairly noted, angels take on a great deal of risk when they invest in these
startups; they are also subject to dilution at the start-up's IPO. Therefore, they usually require a
high rate of return in exchange for their financing – the characteristics to be acknowledged
properly. Collins English Dictionary states angels to be investors in a business venture, especially
in its early stages. The more diverse definition provides Business angels to be individual investors
who invest directly or through their personal holding their own money predominantly in seed or
start-up companies with no family relationships. Mason and Harrison defined Business angels as
a high-net-worth individuals, acting alone or in a formal or informal syndicate, who invests his or
her own money directly in an unquoted business in which there is no family connection and who,
after making the investment, generally takes an active involvement in the business, for example,

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as an advisor or member. Family-related investments, as a part of the Business angel’s market
would add to the breadth of the scope of what is already a heterogeneous concept. At this point it
would be beneficial to note that separation between Business angels and friend and relative
investors has not been clearly defined.

1.6 LIMITATIONS OF THE STUDY

The extent of the thesis represents a central limitation, given how the data sample is comprised of
eight interviews. Although this is considered to be a relatively large sample in qualitative studies,
this permits personal opinions that do not necessarily reflect reality to be given too much attention
in the thesis. Additionally, it is problematic to generalize any results, given how the thesis is a
comparative study of two specific environments. An interesting approach could therefore be to
expand the scope of the thesis to include more clusters or regions, in order to increase the validity
of the results. However, this would negatively impact the meticulousness of the analysis for each
environment, given the timeframe available for conducting the thesis. Additionally, this would
involve a significantly larger data sample (i.e. more participants), which is unfavorable given the
qualitative approach of the study.

It is also necessary to point out how the empirical context of the thesis is a limitation, due to how
the studied environments are very complex and dynamic. This makes it problematic to assess the
results across different points in time, which hampers the reliability of the thesis. Hence, we need
to emphasize that the purpose of the thesis is to examine the current conditions.
In order to further examine the research question of this thesis, it may be pertinent to combine the
qualitative approach with a quantitative analysis. This could increase both the validity and
reliability of the thesis. However, the quantitative data ought then to be of such an extent that the
results could be relied on as representative for both capital markets, which naturally may be
problematic to achieve

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 CHAPTER 2 :

CONCEPTUAL FRAMEWORK
START-UP COMPANY

A startup or start-up is started by individual founders or entrepreneurs to search for a repeatable

and scalable business model. More specifically, a startup is a newly emerged business venture that
aims to develop a viable business model to meet a marketplace need or problem. Founders design
startups to effectively develop and validate a scalable business model. Hence, the concepts of
startups and entrepreneurship are similar. However, entrepreneurship refers all new businesses,
including self-employment and businesses that never intend to grow big or become registered,
while startups refer to new businesses that intend to grow beyond the solo founder, have
employees, and intend to grow large. Start-ups face high uncertainty and do have high rates of
failure, but the minority that go on to be successful companies have the potential to become large
and influential. Some startups become unicorns, i.e. privately held startup companies valued at
over $1 billion. According to TechCrunch, there were 279 unicorns as of March 2018, with most
of the unicorns located in China, followed by the United States. The largest unicorns founded as
of October 2018 included Ant Financial, ByteDance, Didi Chuxing, Uber, Xiaomi, and Airbnb.

TYPES OF START-UP COMPANIES

According to Marmer, Hermann and Berman (2011), who conducted an analysis on more than 650
web start-ups across the USA (Silicon Valley), Internet start-up companies can be divided into
three basic types. The first type of the start-up companies is called "The Automizer" whose
characteristics are being focused on customers, attracting customers who show interest in a
product, fast performance, common automatization processes that were previously performed
manually, a large market, struggle on the existing market, use of new technologies, strong
technology-oriented developers, etc. A subtype of this type of Start-up Company is called "The
Social Transformer" to which belong the start-ups that are characterized by the existence of a
critical mass, increased subscriber growth, and networking. These start-ups typically create new

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ways to connect people and therefore need more capital. Business people and teams meet more
frequently in this type of start-up than in an IT-oriented one.

Another type of start-up companies is "The Integrator" which belongs to start-ups characterized
by high security, early profit, targeting small and medium-sized enterprises as well as smaller
markets, high probability that it will keep small teams even after scaling (growth and expansion),
etc.

The third type is called "The Challenger", characterized by start-up companies having very high
sales, as well as customer dependence, and also by complex and rigid markets, repeatable sales
processes, more time in relation to the first and second type, in need of more capital, business-
oriented teams. This type also has a large number of users and needs large teams in case of start-
up scaling, etc. Cassar (2004) stated in his research that the financing and collection of investments
at the initial stage of development, as well in the expansion phase will depend on the characteristics
and features of each type of enterprise.

2.1 NATIONAL SCENARIO

STATE INITIATIVE
Kerela has initiated a government startup policy called "Kerala IT Mission" which focuses on
fetching ₹50 billion (US$700 million) in investments for the state's startup ecosystem. It also
founded India's first telecom incubator Startup village in 2012. The state also matches the
funding raised by its incubator from Central government with 1:1. Telangana has launched
the largest incubation center in India as "T-Hub". Andhra Pradesh has allocated a 17,000-sq.ft.
Technological Research and Innovation Park as a Research and Development laboratory. It has
also created a fund called "Initial Innovation Fund" of ₹100 crore (US$14 million) for
entrepreneurs. The government of Madhya Pradesh has collaborated with the Small Industries
Development Bank of India (SIDBI) to create a fund of ₹200 crore (US$28 million). Rajasthan
has also launched a "Start-up Oasis" scheme. In order to promote start-ups in Odisha, the state
government organised a two-day Start-up Conclave in Bhubaneswar on November 28, 2016.

EXEMPTION AVAILABLE FROM THIS TAX

The government issued a notification in April this year to give exemption to startups under Section
56 of the Income Tax Act in cases where the total investment including funding from angel
investors did not exceed Rs 10 crore. For the exemption, startups were also required to get approval
from an inter-ministerial board and a certificate of valuation by a merchant banker. According to
the notification, the exemption would apply only when the angel investor had a minimum net worth
of Rs 2 crore or an average returned income of over Rs 25 lakh in the preceding three financial
year.

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Startup Recognition:
Under the Startup India Action Plan, startups that meet the definition as prescribed under the
G.S.R. notification 501 (E) are eligible to apply for recognition under the program. The Startups
have to provide support documents, at the time of application.

Eligibility Criteria for Startup Recognition:

a. The Startup should be incorporated as a private limited company or registered as a
partnership firm or a limited liability partnership

b. Turnover should be less than INR 25 Crores in any of the previous financial years

c. An entity shall be considered as a startup up to 7 years from the date of its incorporate or
10 years in case of Startups in the Bio Technology sector

d. The Startup should be working towards innovation/ improvement of existing products,

services and processes and should have the potential to generate employment/ create
wealth.

Startup India: Tax Exemption under Section 56 of the Income Tax Act (Angel Tax)
Post getting recognition a Startup may apply for Angel Tax Exemption.
Eligibility Criteria for Tax Exemption under Section 56 of the Income Tax Act:
a. The entity should be a DIPP recognized Startup

b. Only a private limited company may apply for Tax Exemption under section 56 of the
Income Tax Act

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 c. The investor’s net worth should be more than INR 2 Crore as on the last date of the
preceding financial year or the average income should be more than INR 25 lacs per annum
for the preceding three financial years.

Startup India: 80 IAC Tax exemption:

Post getting recognition a Startup may apply for Tax exemption under section 80 IAC of the
Income Tax Act. Post getting clearance for Tax exemption, the Startup can avail tax holiday for 3
consecutive financial years out of its first seven years since incorporation.
Eligibility Criteria for applying to Income Tax exemption (80IAC):
a. The entity should be a recognized Startup

b. Only Private limited or a Limited Liability Partnership is eligible for Tax exemption under
Section 80IAC

c. The Startup should have been incorporated after 1st April, 2016.

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2.2 INTERNATIONAL SCENARIO
STARTUPS AND TAXATION : THE GLOBAL SCENARIO
The problem becomes even more stark when taken in the global context. As mentioned earlier,
more and more governments are recognising the usefulness of encouraging and inviting angel
investors to boost their startup economies. To this end, many global startup hubs in fact offer
amazing tax cuts and incentives to attract investors.
China’s global presence is built on the backs of many startup ventures. Baidu, Tencent, and
Alibaba are a few well-known names that have emerged from the Chinese market. These and other
Chinese unicorns have been able to prosper thanks to preferential tax policies that allow 70 percent
of total investment to be deducted from taxation two years after investment in high-tech startups.
Neighbour Singapore also offers tax incentives to startups and investors, even offering qualifying
startups up to Singapore $200,000 tax exemption on their first three consecutive years of
assessment (YAs).

In Europe, countries like Germany and UK have passed laws and implemented policies to offer
generous tax incentives to startups and angel investors. Across the world, Australia’s tax incentives
for investment in innovative startups (introduced in 2016) have been called “arguably the most
generous in the world”. Against such a backdrop, the problems posed by India’s Angel Tax become
even starker.

Canada
According to the Business Development Bank of Canada, there are 20,000-50,000 angels in
Canada. Over 3000 are members of 35 angel groups that belong to the National Angel Capital
Organization (NACO).

China
Prior to 2000, it was difficult for startups in China to find local angel investors. Entrepreneurs such
as Jack Ma of Alibaba Group needed to raise funds from Softbank, Goldman Sachs, Fidelity and
other institutions. However, by 2015 several Chinese Angel groups were in operation.

Russia
In 2012, the International Business Angels Assembly took place in the Russian Federation. This
was an exclusive event devoted to private investing into innovative projects in Eastern Europe.

United Kingdom
A study by NESTA in 2009 estimated that there were between 4,000 and 6,000 angel investors in
the UK with an average investment size of £42,000 per investment. Furthermore, each angel
investor on average acquired 8 percent of the venture in the deal with 10 percent of investments
accounting for more than 20 percent of the venture.
In terms of returns, 35 percent of investments produced returns of between one and five times of
the initial investment, whilst 9 percent produced returns of multiples of ten times or more. The

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mean return, however, was 2.2 times investment in 3.6 years and an approximate internal rate of
return of 22 percent gross.
The UK Business Angel market grew in 2009/2010 and, despite recessionary concerns, continues
to show signs of growth. In 2013, this dynamic kept going on in the UK as angel investors were
named by two-thirds of technology entrepreneurs as a means of funding. By 2015, angel
investments had increased throughout the UK, with the average number of investments made by
angels at 5, compared to 2.5 in 2009. The same report also found an increase in angel investors
making impact investments, with 25% of angels saying they had made an impact investment in
2014.

United States
Geographically, Silicon Valley dominates United States angel investing, receiving 39% of the
$7.5B invested in US-based companies throughout Q2 2011, 3–4 times as much as the total amount
invested within New England. Total investments in 2011 were $22.5 billion, an increase of 12.1
percent over 2010 when investments totalled $20.1 billion. In the United States, angels are
generally accredited investors in order to comply with current SEC regulations, although
the JOBS Act of 2012 loosened those requirements starting in January 2013. Reaching nearly $23
billion in 2012 in the US, angel investors are not only responsible for funding over 67,000 startup
ventures annually, but their capital also contributed to job growth by helping to finance 274,800
new jobs in 2012. In 2013, 41% of tech sector executives name angel investors as a means of
funding.

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 CHAPTER 3 :

PRESENTATION,ANALYSIS &
FINDINGS
3.1 FINDINGS AND DISCUSSIONS
INVESTMENT PROFILE

Angel investments bear extremely high risks and are usually subject to dilution from future
investment rounds. As such, they require a very high return on investment. Because a large
percentage of angel investments are lost completely when early stage companies fail, professional
angel investors seek investments that have the potential to return at least ten or more times their
original investment within 5 years, through a defined exit strategy, such as plans for an initial
public offering or an acquisition. Current 'best practices' suggest that angels might do better setting
their sights even higher, looking for companies that will have at least the potential to provide a
20x-30x return over a five- to seven-year holding period. After taking into account the need to
cover failed investments and the multi-year holding time for even the successful ones, however,
the actual effective internal rate of return for a typical successful portfolio of angel investments is,
in reality, typically as 'low' as 20–30%. While the investor's need for high rates of return on any
given investment can thus make angel financing an expensive source of funds, cheaper sources of
capital, such as bank financing, are usually not available for most early-stage ventures.

SOURCE AND EXTENT OF FUNDING

Traditional methods represent a logical sequence for start-up companies to start raising money,
and most start-up companies enter the entrepreneurial world in this way. If the start-up project
founders do not have their own financial resources and cannot independently raise the start-up
without external investments they usually turn to the traditional financing sources such as : bank

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loans, 3F (i.e. Friends, Family and Fools), seed investments, business angels and venture capital
investments.

 Bank loans are probably one of the oldest formal financial sources for many entrepreneurs
and genuinely mean that an individual or company can take a loan from one or more
banking institutions. Most start-up companies seek to avoid bank loans as they are usually
related to complex procedures and are given based on company`s or individual`s credit
history and property. Since start-ups are usually founded by young people who, in many
cases do not own property, it is hard to get a bank loan. Astebroa and Bernhardt`s research
(2003) shows a very high and positive correlation between bank loan and sustainability of
the start-up company. Nevertheless, an unconditional correlation between bank loan and
sustainability is negative. The reason for this negative correlation is a growing number of
start-up companies that have received some other form of investment and at the same time
successfully exist in the market. A recent research on a very large data panel shows that
high-tech start-ups are unlikely to use bank loan and it is much harder for them to get one
compared to the start-up companies in other industries.

 3F - Friends, Family and Fools – before they turn to external formal financing sources
(business angels, different funds or banks) entrepreneurs should try to collect their initial
funds from those people who are closest and familiar to them such as friends and family
(informal sources of financing) before they turn to external investments such as business
angels, various funds or banks (Krishnan, 2010). This is the "first line" of investors and it
is often called "Fools" because they invest their money into start-up companies although
all data shows that a great number of start-up companies fail within the first three years of
doing business. However, before turning to larger and more powerful investors, it is
important that the start-up companies receive initial investments. This shows that the
entrepreneur believes in his idea and that his family and closest friends are also ready to
take the risk and invest in their business idea. Potential risks of such a financing are
disagreements that may occur in the families or between friends if the project fails in the
end (Lopac, 2007).

 Seed investments are also known as initial investments that help start-up companies in
expanding their business. Start-up companies engaged in technology development with
rapid growth potential due to the nature of their business often explore seed investments in
order to accelerate their growth and the development of their products. A very popular way
of funding start-up companies and receiving seed investments are private investors who
want to invest their capital into potentially successful businesses. It is rather common that
seed investments are collected at the earliest stage of fundraising and they usually include
personal savings and funds from family members and friends.

 Business angels are investors who help entrepreneurs to realize their business ideas. In
addition, business angels help by sharing their knowledge, experience and financial
resources not only with start-ups but also with established businesses that already have a
track record but are temporarily in financial difficulties. The greatest value of business
angels is the so-called "smart funding" that includes providing skills, expertise and business

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 contacts, while most common reasons for investing are acquisition of profit, encouraging
entrepreneurship, business activity and creating new value. Before investing in a company
takes place, a contract defines the relationship between the start-up founder and the
business angel as an investor. The contract generally contains an investment value, the
investment time period, the investment price and an exit strategy from the company.
Sharpe, Cosham, Connell and Parnell (2009) conducted a study in the UK which proved
that business angels have a major role in funding high-tech start-ups in their early stages.
One of the reasons for that is the governmental support through tax exemption of their
investments. Giurca Vasilescu believes that business angels are the most important link
between funding and developing companies, from the start-up stage to the stage in which
companies are ready to be on the capital market. Moreover, business angels provide
financial and managerial support which is the additional option for survival of the
companies. Venture Capital investments or risk capital investments can come from
individuals, companies or funds that invest in individual companies in order to help their
development.

 Venture Capital investments are not the same as bank loans because after investing Venture
funds seek for a corresponding part of the ownership in the company, while banks enter
into a financing for an exactly determined time period and with precisely defined interest
rates. Venture Capital (VC) is not affected by company`s cash flow and it does not create
any costs, while bank loans are always time-limited and during the entire repayment time
they burden the company`s cash flow.

Angels typically invest their own funds, unlike venture capitalists who manage the pooled money
of others in a professionally managed fund. Although typically reflecting the investment judgment
of an individual, the actual entity that provides the funding may be a trust, business, limited liability
company, investment fund, or other vehicle. A Harvard report by William R. Kerr, Josh Lerner,
and Antoinette Schoar provides evidence that angel-funded startups are more likely to succeed
than companies that rely on other forms of initial financing. The paper by Kerr et al., found "that
angel funding is positively correlated with higher survival, additional fundraising outside the angel
group, and faster growth measured through growth in web site traffic".

Angel capital fills the gap in seed funding between "friends and family" and more robust start-up
financing through formal venture capital. Although it is usually difficult to raise more than a few
hundred thousand dollars from friends and family, most traditional venture capital funds are
usually not able to make or evaluate small investments under US$1–2 million. Thus, angel
investment is a common second round of financing for high-growth start-ups, and accounts in total
for almost as much money invested annually as all venture capital funds combined, but into more
than 60 times as many companies.

There is no "set amount" for angel investors, and the range can go anywhere from a few thousand
to a few million dollars. In a large shift healthcare/medical accounted for the largest share of angel

19
investments, with 30% of total angel investments, followed by software (16%), biotech (8%) ,
industrial/energy (8%) , retail (5%) and IT services (5%). While more readily available than
venture financing, angel investment is still extremely difficult to raise. However some new models
are developing that are trying to make this easier.

Much like other forms of private equity, the investment decision-making has been shown to suffer
from cognitive biases such as illusion of control and overconfidence.

STARTUP INDIA

Startup India is an initiative of the Government of India.

The campaign was first announced by Indian Prime Minister, Narendra Modi during his 15 August
2015 address from the Red Fort, in New Delhi. The action plan of this initiative, is based on the
following three pillars:

1.Simplification and Handholding.

2.Funding Support and Incentives.
3.Industry-Academia Partnership and Incubation.

An additional area of focused relating to this initiative, is to discard restrictive States Government
policies within this domain, such as License Raj, Land Permissions, Foreign Investment Proposals,
and Environmental Clearances. It was organized by The Department of Industrial Policy and
Promotion (DIPP). A startup defined as an entity that is headquartered in India, which was opened
less than seven years ago, and has an annual turnover less than ₹25 crore (US$3.5 million). Under
this initiative, the government has already launched the I-MADE program, to help Indian
entrepreneurs build 1 million mobile app start-ups, and the MUDRA Banks scheme (Pradhan
Mantri Mudra Yojana), an initiative which aims to provide micro-finance, low-interest rate loans
to entrepreneurs from low socioeconomic backgrounds. Initial capital of ₹200 billion (US$2.8
billion) has been allocated for this scheme.

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HIGHLIGHTS OF THE ACTION PLAN

1. Simplification and Handholding

 Compliance Regime based on Self-Certification - Startups shall be allowed to self-certify

compliance (through the Startup mobile app) with 9 labour and environment laws. In case
of the labour laws, no inspections will be conducted for a period of 3 years. Startups may
be inspected on receipt of credible and verifiable complaint of violation, filed in writing
and approved by at least one level senior to the inspecting officer. In case of environment
laws, Startups which fall under the ‘white category’ (as defined by the Central Pollution
Control Board (CPCB)) would be able to self-certify compliance and only random checks
would be carried out in such cases.

 Startup India Hub - To create a single point of contact for the entire Startup ecosystem
and enable knowledge exchange and access to funding.

 Rolling-out of Mobile App and Portal - To serve as the single platform for Startups for
interacting with Government and Regulatory Institutions for all business needs and
information exchange among various stakeholders.

 Legal Support and Fast-tracking Patent Examination at Lower Costs - Under this
scheme, the Central Government shall bear the entire fees of the facilitators for any number
of patents, trademarks or designs that a Startup may file, and the Startups shall bear the
cost of only the statutory fees payable. Rebate on filing of application: Startups shall be

21
 provided an 80% rebate in filing of patents vis-a-vis other companies. The scheme is being
launched initially on a pilot basis for 1 year; based on the experience gained, further steps
shall be taken.

 Relaxed Norms of Public Procurement for Startups - In order to promote Startups,

Government shall exempt Startups (in the manufacturing sector) from the criteria of “prior
experience/ turnover” without any relaxation in quality standards or technical parameters.
The Startups will also have to demonstrate requisite capability to execute the project as per
the requirements and should have their own manufacturing facility in India.

 Faster Exit for Startups - Startups may be wound up within a period of 90 days from
making of an application for winding up on a fast track basis, as per the recently tabled
Insolvency and Bankruptcy Bill 2015, which has provisions for voluntary closure of
businesses. This process will respect the concept of limited liability.

2. Funding Support and Incentives

 Providing Funding Support through a Fund of Funds with a Corpus of INR 10,000
crore - In order to provide funding support to Startups, Government will set up a fund with
an initial corpus of INR 2,500 crore and a total corpus of INR 10,000 crore over a period
4 years (i.e. INR 2,500 crore per year) . The Fund will be in the nature of Fund of Funds,
which means that it will not invest directly into Startups, but shall participate in the capital
of SEBI registered Venture Funds.

 Credit Guarantee Fund for Startups - Credit guarantee mechanism through National
Credit Guarantee Trust Company (NCGTC)/ SIDBI is being envisaged with a budgetary
Corpus of INR 500 crore per year for the next four years.

 Tax Exemption on Capital Gains - With this objective, exemption shall be given to
persons who have capital gains during the year, if they have invested such capital gains in
the Fund of Funds recognized by the Government. In addition, existing capital gain tax
exemption for investment in newly formed manufacturing MSMEs by individuals shall be
extended to all Startups.

 Tax Exemption to Startups for 3 years - The profits of Startup initiatives are exempted
from income-tax for a period of 3 years. The exemption shall be available subject to non-
distribution of dividend by the Startup.

 Tax Exemption on Investments above Fair Market Value - Under The Income Tax Act,
1961, where a Startup (company) receives any consideration for issue of shares which
exceeds the Fair Market Value (FMV) of such shares, such excess consideration is taxable
in the hands of recipient as Income from Other Sources. Investment by venture capital
funds in Startups is exempted from operations of this provision. The same shall be extended
to investment made by incubators in the Startups.

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3. Industry-Academia Partnership and Incubation

 Organizing Startup Fests for Showcasing Innovation and Providing a Collaboration

Platform - To bolster the Startup ecosystem in India, the Government is proposing to
introduce Startup fests at national and international stages.

 Launch of Atal Innovation Mission (AIM) with Self-Employment and Talent Utilization
(SETU) Program - The Atal Innovation Mission will establish sector specific incubators
and 500 'Tinkering Labs' to promote entrepreneurship, provide pre-incubation training and
a seed fund for high-growth startups. Three innovation awards will be given per state and
union territory, along with three national awards, as well as a Grand Innovation Challenge
Award for finding ultra-low cost solutions for India.

 Harnessing Private Sector Expertise for Incubator Setup - To ensure professional

management of Government sponsored / funded incubators, Government will create a
policy and framework for setting-up of incubators across the country in public private
partnership.

 Building Innovation Centres at National Institutes - In order to augment the incubation

and R&D efforts in the country, the Government will set up/ scale up 31 centres (to provide
facilities for over 1,200 new Startups) of innovation and entrepreneurship at national
institutes.

 Setting up of 7 New Research Parks Modeled on the Research Park Setup at IIT
Madras - The Government shall set up 7 new Research Parks in institutes with an initial
investment of INR 100 crore each. The Research Parks shall be modeled based on the
Research Park setup at IIT Madras.

 Promoting Startups in the Biotechnology Sector - 5 new Bio-clusters, 50 new Bio-

Incubators, 150 technology transfer offices and 20 Bio-Connect offices will be set up in
research institutes and universities across India. BIRAC AcE Fund in partnership with
National and Global Equity Funds (Bharat Fund, India Aspiration Fund amongst others)
will provide financial assistance to young Biotech Startups.
 Launching of Innovation Focused Programs for Students - An innovation core program
targeted at school kids aims to source 10 lakh innovations from five lakh schools, out of
which the the best 100 would be shortlisted and showcased at an Annual Festival of
Innovations, to be held in Rashtrapati Bhavan. A Grand Challenge program called NIDHI
(National Initiative for Developing and Harnessing Innovations) shall be instituted through
Innovation and Entrepreneurship Development Centres (IEDCs) to support and award INR
10 lakhs to 20 student innovations. Uchhattar Avishkar Yojana, a joint MHRD-DST
scheme has earmarked Rs. 250 crore annually to foster "very high quality" research
amongst IIT students.

 Annual Incubator Grand Challenge - The government will identify and select ten
incubators, evaluated on pre-defined Key Performance Indicators (KPIs) as having the the

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 potential to become world class, and give them Rs.10 crore each as financial assistance to
ramp up their infrastructure.

The aforesaid policy interventions have provided the initial impetus to spur growth of startups in
India. However, it is now being realised that much ground needs to be covered to maintain this
momentum. Some of the challenges being faced by startups are highlighted below.

a) Presently, obtaining recognition as a startup and subsequent approval for availing tax holiday is
a two-step procedure.

Initial recognition is granted to startups with innovative offerings or that are capa ble of generating
substantial employment opportunities. These conditions are very subjective and can lead to varied
interpretations impacting chances of obtaining approval. It is required that the definition is made
more liberal to allow more ventures within its ambit.

To avail tax holiday, a startup is required to obtain a separate approval. Further, a separate approval
is required for being eligible to issue fresh shares at a premium and remain outside the rigours of
angel tax. Govern ment may consider combining these approvals/procedures with initial
recognition procedure only to provide relief to start-ups.

b) Another major issue being faced by startups is arising on account of ‘angel tax’. The tax
department has wanted to tax amounts received on issuance of shares supposedly in excess of their
fair value. The issue created confusion when many startups received notices/adverse tax orders for
the aforesaid reason. This was widely publicised inviting immediate action from the Government.
As a result, it was clarified that startups would not get caught within rigours of angel tax subject
to riders on premium quantum being less than Rs 100 million, turnover thresholds being
reasonable, etc. Although, this brought some relief to the startup community, the conditions
imposed are prescriptive and will make this applicable only to a small section of the aggrieved lot.

c) Another issue being faced by startups is attraction and retention of desired human r esources.
Given that they are generally short on funds, for such purposes they generally resort to issuance of
Employee Stock Options (ESOPs). Under the existing tax regime, tax is payable by employees on
exercise of ESOPs. This has huge impact on cash flow of such employees as there is a need for
upfront payment of tax on exercise of ESOPs. Given this, employees are sometimes reluctant to
accept ESOPs as an alternative to cash component in salary. Thus, the Government may look at
the possibility of postponing taxes of ESOPs (especially in case of employees of start-ups) to date
of actual sale by employees.

d) At present, there are multiple regulators like RBI, DIPP and CBDT dealing with different facets
that impact startups. It is advisable that a single body for regulating startups be set up to facilitate
ease of doing business for new age ventures. Alternatively, the Government may evaluate
introducing single mother regulation for startups on the lines of SEZ Act, which will have an
overriding effect on all other laws.

In spite of above challenges that continue to haunt the community, startups have made reasonable
progress and contributed significantly to infrastructure development, generation of employment,

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etc. in India. The need of the hour is to make the startup ecosystem more conducive and adaptive
to help them realise full potential.

3.2 ANALYSIS
Ashish Gupta is the cofounder of Junglee, which was sold to Amazon for $240 million in 1998,
and a venture capitalist. But for thousands of angel investors dotting India’s startup landscape, he
is the one with the Midas touch. He was an angel investor in Flipkart when it was just a Bengaluru
based online vendor of books. His investment of Rs 10 lakh galloped into Rs 133 crore almost a
decade on, when Flipkart was sold to Walmart. Gupta’s venture capital ambitions floundered when
his fund Helion Ventures shut shop 3 years ago, but he has aced it as an angel, making smart
investments in ventures such as MakeMyTrip and data analytics company Mu Sigma.

While Gupta’s Flipkart deal shone the spotlight on the dramatic returns angels make — those who
typically put Rs 1 crore or less in a startup, when it is little more than a bold plan — observers
contend that this has led to other less welcome consequences. Angels are rushing in but many
newbies offer poor inputs, cut few deals and harbour unrealistic expectations, putting a strain on
India’s startup ecosystem.

“Everyone with some money to burn wants to become an angel investor today,” grumbles K
Ganesh, a startup market veteran who has cofounded ventures such as TutorVista and Portea
Medical. Now, he operates GrowthStory, an incubation and ideation business. “Few of them
understand the nuances of angel investing (rate of returns, balancing a portfolio), but are entranced
by headlines of returns generated by Flipkart and Co.” At his peak, Ganesh juggled over two dozen
angel investments, including one in Little Eye Labs, which was sold to Facebook.

According to Sanjay Nath of Blume Ventures, an earlystage investor, angels can be broadly
divided into three categories. The first is the intelligent angel, who offers both capital and value
addition; the second provides just money; and the third offers nuisance capital. It is the last

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category that vexes entrepreneurs and later-stage investors because they are often stumbling blocks
in a company’s evolution.

While there is a glut of new angel investors, industry veterans are showing restraint. Veteran angel
investors such as Rajan Anandan, MD of Google India, and Anupam Mittal, founder of People
Group, have made few deals this year as they focus on consolidating their bets. Post-
demonetisation, angel investing had slowed down. The imposition of angel tax has also made the
operating environment tough.

Debashish Bhattacharya knows how difficult it has become. He and his team of four have been
running Brin, a brand of ready-to-consume tea, which is available in 100 stores in Pune and
Bengaluru. But its ambitious expansion plans have been throttled by lack of capital. The firm sells
barely 10,000 units of its beverage, when there is demand for five or six times that. “No Indian
investor wants to take the risk and back a company in a new market,” he says. “Instead, we were
able to convince an American angel to invest in us. Indian angel investors, Bhattacharya says,
don’t understand the fast-changing consumer market.

Angel investing has seen multiple waves in India.

The first saw Silicon Valley successes such as
Kanwal Rekhi making investments to get
homegrown startups going. Then, a second lot,
who had tasted success with their businesses, like
Deep Kalra of MakeMyTrip, got into the game,
followed by venture capitalists like Gupta of
Helion. Entrepreneurs like Sachin and Binny
Bansal, founders of Flipkart, too, backed startups
in segments ranging from health tech to electric
automobiles.

For entrepreneurs, angel investors can make the

difference between a business taking off the ground
or crashing and burning. The initial fund injection
helps ventures validate their business models and
build pilots. Several Indian angel investors have
made killer deals: Geereddy Reddy, who put
money in redBus, and MV Krishnan, who invested in Grabhouse, have both netted handsome
returns. This model is now under stress.

TooMany,TooLittle

Angel clubs such as Mumbai Angels and Indian Angel Network have become too large, complain
entrepreneurs who prefer focused angels with domain or industry expertise. VC and seed funds,
which compete and collaborate with angels, are building their parallel networks. We prefer to focus
our investments on a select bunch of investors. In our last 10 deals, we haven't collaborated with

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angel investors at all, says Anand Lunia, cofounder of India Quotient, an early-
stageinvestor.

Saurabh Srivastava, cofounder of Indian Angel Network (IAN), a Delhi-based group with about
850 members, says 10 to 12 people are being added every month. However, there are growing
concerns since many of the new entrants are focused solely on returns and not on nurturing their
investments. For the past six years, we have debated on capping numbers to try and keep operations
manageable, says Srivastava. IAN focuses on people who have built and sold ventures, rather than
on assorted businesspeople. It has one investor taking a lead role in negotiations and that simplifies
deal-making with entrepreneurs. When there are three, four or more angels, that's where trouble
starts, he adds.

At large angel clubs, there's a stampede for deals in a few areas like artificial intelligence and
machine learning while other segments languish. Entrepreneurs find themselves juggling a clutch
of investors even to raise Rs crore. Entrepreneurs end up managing the investors egos and
expectations rather than their own businesses, says Ganesh. To finalise an exit, entrepreneurs have
to scramble for paperwork and signatures from angels in different locations and convince them
about the looming deal. In startups, where time is money, these delays can mean the difference
between sinking and surviving.

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Entrepreneurs are worried. Utsav Bhattacharjee, a doctor who went to IIM-Bengaluru, started
Reculta, a software platform to manage campus placements, a little over a year ago. His first dose
of funding happened by chance from a contact on LinkedIn, an investment banker in Singapore,
who added both money and value to the fledgling venture. However, since then, he has been
struggling. Investors are unable to grasp his business model and has offered little to boost the
firm’s fortunes.

The growing number of angels doesn't translate into a greater number of deals. Data from Tracxn,
an aggregator of deal information, shows the strain in the space. The number of deals fell from
366 in 2016 to barely over 100 so far in 2018. Few expect any uptick in this trend. The number of
angel rounds in the July-September quarter of 2018 was just 24, down from 50 in the corresponding
quarter last year. Venture capitalists offering Series A investments too have pared their bets, faced
with poor angel investment climate. Experts say that as these investors focused their bets on select
ventures, early-stage investing, especially angel deals, suffered.

According to CB Insights, a tracker of deal data, just $206 million of angel and seed-stage deals
were closed in 2017, compared with $283 million in 2016. This was the smallest amount of early-
stage investing in tech-driven startups since 2014, the agency estimates.

The structural issues with India¡¦s startup ecosystem are reflected in the skewed funding there.
While startups seeking early investment are feeling the heat, there is a lot of interest towards
unicorns valued at a billion dollars or more which went up from just four in 2014 to 13 this year.
Several other firms such as BlackBuck and Rivigo, logistics startups, Udaan, a B2B player, and
ShareChat, a vernacular social networking platform, have seen their valuations explode. Investors
have fallen over themselves to back these red-hot ventures and corner follow-on rounds in them.

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Meanwhile, an NCR-based startup that is trying to build blockchain-based solutions for the
insurance sector, has got the short end of the stick. Days after finalising a term sheet, a nonbinding
agreement with investors, for Rs 2 crore, the founders saw investors walking away from the deal.
The startup barely survived the blow, as it lost employees and businesses, and its plans were set
back by six months due to the missed funding tranche. In Bengaluru, an 18-month-old startup
focused on healthcare monitors saw a Rs 1.5 crore deal vanish due to the differences in valuation
made by an angel with a background in tech and another with two decades plus experience in
healthcare.

Siddharth Ladsariya, an angel investor with over 100 deals to his credit, says the criticism is
overdone. The primary job of this class of investors is to give an entrepreneur vital money and
boost very early plans for the venture, says Ladsariya, who has backed ventures ranging from Ola
to Oyo. You can't expect most investors to have their fingers burnt. This disconnect happens when
angels, who enter the market to build an alternate asset class or kill time, and entrepreneurs, who

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expect the moon from these early investors, can't find a common ground.

Despite these air pockets, angel investors will not be flying away. As the country seeks to build
Startup India, it needs more, not less, of angel investors. Investors should be motivated to put their
money in ventures in small-town India. Organisations such as Venture Catalysts are planning to
spread its network across 50 cities, from around a dozen now. We need to model our angel
investment ecosystem on places such as London that offer tax sops to investors rather than impose
additional burdens on their investments, says Apoorv Ranjan Sharma, cofounder of Venture
Catalysts.

The taxation limits investors from putting their money and trust on fledgling and early-stage
startups, which in effect stifles more people to come forward and start their own. The concern has
been raised year after year by multiple entities, from entrepreneurs to angel investors. Many
unlisted and early-stage startups rely heavily on funding from angel investors to build the
groundwork necessary to get further funding from VC groups. Taxing this investment discourages
and drives away angels, effectively stifling the much-needed flow of money to the fledgling
startups.

The issue takes a darker turn, with multiple incidents reported of entrepreneurs being shaken down
by IT officials over alleged questions on the valuation of the funding. Place yourself in the shoes
of these desperate entrepreneurs who work to their bones to get the funding, only to have a cruel
twist of fate take that dream away based on unfounded presumptions. This brings to light the
double standards of multiple governments who on one hand seek more and more individuals to
take up the startup dream, only to crush these very dreams with something as harsh as the Angel
Tax. While aimed to curb money laundering and check undisclosed income, in its enthusiasm, the
government is likely doing more harm than good.

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 CHAPTER 4 :

CONCLUSION,
RECOMMENDATIONS
& BIBLIOGRAPHY
It is well known that a very small number of start-up companies succeeds, and continues to develop
and make a profit after the market launch of products and services. Start-up companies which are
mainly defined as newly founded companies are usually associated with high-tech projects, and
are often lost on the way from the founding the start-up to achieving a business success. In the
research of the start-up scene in India the basic limitation is the sample size. Data on the number
of start-up companies is based solely on the information gathered by searching the information
received from the association and website. The lack of earlier research against which the results
could be compared to is also a limiting factor. Despite these limiting elements, this analysis has
shown compliance with the ways of financing start-ups in the world, i.e. the Indian start-up
companies prefer traditional and informal financial sources with emphasis on private financing
and financial assistance from friends and family. After surviving the first experimental phase, the
entrepreneurs gain enough courage to find financial support from other funding sources, such as
business angels and seed investments, although the level of company development and the
experience of entrepreneurs are not necessary associated with the financing methods.
Risks are an indispensable part of startup success. However, an alert and insightful mind is
necessary while making decisions relating startup activities to reduce any risk of failure. Although
challenges are a part of every startup, the determination to overcome these challenges even in times
of distress and doom is what makes a successful startup. Startups that succeed are the ones that are
always in search of business opportunities, they are diligent in grabbing and exploiting them
besides finding innovative ways to tackle the challenges that are faced by all Startups & learn from
their own mistakes and stay focused on their vision. With the current startup ecosystem in India
on a move, there is no major reason why a great idea shouldn’t succeed with the right ingredients
of running Startup businesses.

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Our research found that only two
out of our five Business Angels
consciously used their
fundamentals for their first
investments. However, nowadays
all the angels to some extent make
use of what they have learned in
their previous career phases.
Some of them regarding the industries they invest in, to be able to evaluate the market potential or
to contribute nonmonetary value; others use their fundamentals rather to give advice on a broader,
more strategic level.
The three possible ways in which investment criteria and strategies can develop either endlessly
or limitedly:
a) The flexible path, which is characterized by steady change in the relevance and the application
of an investment strategy or criterion. This path can mainly be found in the early stage of the
investment process and is both influenced by fundamentals and experiential learning.

b) The semi-flexible path, which is characterized by investment criteria and strategies that initially
can be very volatile in their application, however that become increasingly anchored over time.
This path applies mainly in the later stages of the investment process and is clearly shaped by
experiential learning.
c) The fixed path, which is initially proceeding comparable to the semi-fixed path, however
investment criteria and strategies following this path become fixed at a certain point of time. This
path, also predominantly shaped by experiential learning, was the most common one within our
findings, occurring throughout the whole investment process.

RECOMMENDATIONS
The study shows that even though Business angels can turn to be a rather good solution for an
emerging or start-enterprise the good results go hand-to-hand with high risks. As the boldest risk
for sequent and transparent development of this group of investors and further positive outcome
for entrepreneurs, the lack of unified understanding and absence of well-formed legislative base is
named. The clarity on alternative investors and their main characteristics is highly needed in order
to protect entrepreneurs form possible unfair investor actions and provide them with trustable
informative base. At the same time, unified legislative position of the authorities may enhance the

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participation of potential or latent Business angel investors. If alternative investors, including
Business angels are well explained and organised several positive effects could be achieved:
• Local governments may bring extra attention to locally or nationally important economic sectors,
though using various tax discount systems.
• The willingness of the entrepreneurs to evaluate the possibilities of alternative investors might
enhance if legislative framework, taking in account their true needs, is organised.
• Unified legislative approach would be possible if a certain agreement on definitions and ethics
of Business angels are reached.
• The contractual relationships between entrepreneur and investor could in few aspects be
standardized.

The association admits that using over-standardised legislative approach towards alternative
investment market could not be the best possible action. Even though the core systematisation is
welcomed, Business angel investors should be left with the opportunity to invest in high-risk
projects and start-ups in less known areas. Keeping this in mind, and being aware of Business
angel cross-the-board investments it is assumed that the best possible approach to create
fundamental principles of Business angel investors is to form as a single approach for all. Taking
the performed overview several suggestions for further research can be highlighted. Moreover, the
analysis of regulatory aspects and performed support activities in different member states could
enhance the overall understanding of alternative investment market. Knowing the cross-border
character of angel investments, the data on investment amount as well as residential belonging of
the investor should be divided. As a last but not least, unified Indian thresholds of different angel
investor participation levels could be formed. Keeping in mind the main angel investor target
audience is SMEs, the proper support to the entrepreneurs should be organised in a way they feel
acquainted with the main principles and opportunities alternative investment possess. All the up

33
mentioned suggested activities and further research suggestions are seen as core elements for a
single European alternative investment market development. By ensuring coherent alternative
investment environment and identifying its key issues, the proper evaluation and sound
understanding of related risk management and opportunities would than significantly develop.

In this connection, the Government has over the past two years rolled out measures such as
allocation of funds to support startups, setting of specialised Mudra bank for the SME sector,
preferential procurement norms, etc. The Government also introduced tax sops for newly set-up
businesses. Some of these have been elucidated below.

— Subject to obtaining recognition (through easy registration process), startups can avail tax
holidays in initial few years

— Carry forward of tax losses shall not lapse even when there is change in majority shareholding
(subject to conditions)

— To promote startup culture and to incentivise individuals to set up such ventures, capital gains
arising on sale of residential property are treated as tax exempt in case the proceeds are invested
in a start-up.

Again, the discretionary powers of DIPP or IMBC for granting Start-up India registration for
income tax benefits should be more automated and process driven rather than giving discretionary
powers to the officers to determine if the start-up is innovative or not or whether it would generate
enough employment or not. The Government is doing its bit and the Country and the Start-up
ecosystem has come a long way in last few years. However, a lot still has to be done and creating
the conducive environment for both budding entrepreneurs and domestic investors is very
important.

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BIBLIOGRAPHY
 https://www.investopedia.com/terms/a/angelinvestor.asp

 https://economictimes.indiatimes.com/small-
biz/startups/newsbuzz/individual-angels-may-get-tax-relief-
too/articleshow/63086094.cms

 https://en.wikipedia.org/wiki/Startup_India

 https://www.forbes.com/sites/andrewweinreich/2018/12/19/how-data-will-
transform-the-future-of-angel-investing/#1034613b112b

 https://www.emeraldinsight.com/doi/abs/10.1108/SEF-11-2014-
0210?journalCode=sef

 https://www.forbes.com/sites/krnkashyap/2018/12/01/the-8-most-prominent-
angel-investors-in-india/#58945b266081
 https://www.insightsonindia.com/2019/01/18/angel-tax/

 https://www.startupindia.gov.in/content/sih/en/startupgov/startup-
recognition-page.html

 https://www.livemint.com/Money/Xx3lRfCG6AF0y5K7pmtjxL/Opinion--
Burden-of-angel-tax-for-startup-investors.html

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