Incubation Process

Kerala Startup Mission (KSUM) is designed to provide a springboard to budding

entrepreneurs who wish to launch themselves into the world of technology based
business careers. Entrepreneurs’ bright ideas to develop a product or service using
advanced technology solutions can find a fertile ground in Kerala Startup Mission.
KSUM is designed to provide entrepreneurs all the support to make technology based
business ventures successful. The highly innovative and productive environment of
KSUM provides entrepreneurs the right ambiance to build up technology ventures at
international standards. KSUM is restricted to high tech startups with technology
products and innovations with in a limited time frame that literally makes the
entrepreneur to seriously work on his product idea and boost him to come up with a
‘Market viable prototype.

The incubations stages comprised of;

a) Pre-incubation Stage (3-6 months)

b) Incubation Stage (6-12 months)
c) Accelerator Stage (3-6 months)

Pre-incubation Stage

Preincubation stage mainly focuses on ideation stage, where technologist having a

potential innovative idea can be provided with a co-working space. During this period,
the entrepreneur takes up the role of a ‘techno-evangelist’ who develops the idea to
into a proof of concept and prepares him for understanding the technical feasibility of
the idea proposed. Sometimes, a number of potential innovations or startup teams may
come out of this co-working eco sytem. KSUM will be supporting the startups by
mentoring or by creating right platform for networking. Once a marketable
technology/product idea evolved, a company can be formed and KSUM can look at for
Incubation Stage. KSUM shall assist the innovator in getting grants from DST/DSIR for
the ventures.

Incubation Stage

Incubation stage will be 6-12 months where startup companies graft product
development and prepare themselves for marketing. During this stage, the
entrepreneur takes up the role of a ‘Technopreneur’, who brings all his efforts (such as
technology, team, seed money) to build a market viable prototype (MVP’s). KSUM at
this stage will allot them specific seats/modules along with funds or grants as
applicable under department scheme and right mentorship. KSUM can also offer a
wide array of value added services like entrepreneur trainings and workshops, skill
development programmes, leadership programmes, R&D facilities, International tie-
ups etc to speed up the incubation cycle. The incubation stage enables the entrepreneur
to be ready with an ‘innovative technology’ in the form of marketable product that can
primarily drive the market, and which is easy to pitch before an investor/VC in future.

Accelerator stage

Accelerator stage will be of 3-6 months, and this will be a business tools box and a
holistic business advisory service, resembling the traditional management consulting
or mentoring, but adjusted to fit for the startups. The focus of accelerator stage shall be
on rapid growth and to sort out all organizational, operational, financial and strategic
difficulties that may be facing the business under KSUM guidance through a highly
systematic approach. The startup shall be presented to VC’s and investors (Strategic &
Financial).

Membership Criteria

The selection of entrepreneurs for membership in KSUM will be based on the

recommendation of an expert committee specifically set up for the purpose. The criteria
for acceptance are the following:

1. The business activity proposed is in the advanced technology area. The company
must meet the definition of a "technology-based company" (An organization which
pursues commercial applications of science/technology-based innovations; employs a
high percentage of technicians, engineers or scientists; or requires extensive R&D to
produce new products or services).

2. The venture proposed is a corporation, partnership or sole proprietorship.

3. Demonstrate a need for incubator services.

4. Demonstrate capability for business viability and growth.

5. The business plan submitted by the entrepreneur is sound.

6. In the absence of a proper business plan, the request for membership will be accepted
provisionally if business proposal looks promising prima-facie to the expert committee.

7. The entrepreneur will submit a proper business plan to TBI, which will be reviewed
by the expert committee before final acceptance.
8. The business proposed should have significant technology content / employment
potential / revenue generation potential / export earning potential.

9. The entrepreneurs may or may not have a track record in undertaking

entrepreneurial ventures.

10. A first time entrepreneur should have the requisite aptitude in promoting the
venture. The expert committee will assess this through personal interview, review of
past activities, background check, references etc.

Selection Process

i) Determination of eligibility by TBI based on preliminary application.

ii) TBI and the entrepreneur will sign a mutual nondisclosure agreement (NDA)

iii) Submission of complete application package:

a) Copy of the entrepreneur’s business plan

b) Entrepreneur's tax returns for prior three years if applicable.

c) Details of company's corporate structure, bylaws, ownership, etc.

iv) TBI sets up an expert committee to evaluate the application.

v) The expert committee reviews the application based on but not limited to the
following criteria:

a) Merit of the business proposal

b) Background and experience of the entrepreneur

c) Financial viability

d) Status of the business plan, market research and feasibility studies

e) Growth potential

f) Applicant’s commitment-both financial and personal time-to the venture

g) Business references
h) Make up of the management team

i) To what extent is the entrepreneur developing technology, or using technology for a

unique business purpose?

j) How effectively does the entrepreneur demonstrate an understanding of the

environment facing the venture in its target markets, and a reasonable strategy to
achieve stability and growth?

k) How clear is the entrepreneur's need for the types of services that the incubator
offers?

l) Is the venture product or service-based? Product-based ventures, by their nature,

have a greater potential for significant economic impact, but innovative service
businesses will also be considered for the program.

m) Market knowledge and experience (market definition, markets serviced,

competition, SWOT analysis etc.)

vi) The entrepreneur gives a presentation of the business plan to the expert committee
and clarifies all the questions.

vii) Due diligence by the expert committee (including background and credit check of
entrepreneur)

viii) Decision by expert committee.

ix) if the company is found to be

Post Admission Process

Once the decision is made to admit the entrepreneur to the incubation programme of
TBI, the following activities are undertaken:

1) License agreement is executed between TBI and the entrepreneur.

2) Jointly set short-term objectives for the venture’s performance.

3) Develop a written plan of work for the venture.

4) Set up the venture's financial management and budgeting systems.

5) Identify mentors, consultants, service providers or resource centres to assist the
entrepreneur in achieving his goals.

Review

KSUM will review the formal performance of each company. The expert committee
gauges the progress of the company against its objectives. The expert committee also
evaluates the quality and impact of the business assistance provided by T-TBI. Any
further assistance in the form of mentors, consultants, service providers or resource
centres required by the entrepreneur is identified during this review.

Duration of Incubation Programme

The duration of license to operate in the incubator program shall be for a term of 6
months namely ‘Pre-Incubation’. An extension of one more term of 1 year shall be
considered on a case-by-case basis based on the recommendation of the expert
committee. These entrepreneurs shall move out of incubator at the end of the license
period whether they have graduated* or not.

The entrepreneur has to submit a formal application to the expert committee

highlighting all factors responsible for the delays in the plan. The application should
show the strategies adopted by the venture in overcoming the problems faced by the
company.

Graduation

The venture shall graduate from the incubation programme when any one of the
following conditions is fulfilled.

i) The revenue stream of the company is adequate for self-sustenance.

ii) The entrepreneurs have been able to tie up investors to finance the expansion plans
of the venture and the incubator support is no longer necessary.

iii) The entrepreneurs have sold the venture to a larger company.

iv) Expiry of the period specified in the license agreement.

If any of the above events takes place the venture will be treated as graduated from
incubation programme and the membership in the incubator will be discontinued.