Case Study

On

“ Impact and Role of good governance in best practice and practical framework for
different types of Startups."

In partial fulfillment of the requirement for the award of degree of

“Masters oF Business Administration”
For The Subject Of “Buisness Ethics And Corporate Governance”

Submitted by
Miss. Angel Reginal (09. A) Miss. Vaishnavi Pandhare (112. B)

Under The Guidence Of

Prof. Sheela Bhiwgade

Department of Management
G H Raisoni Institute of Engineering & Technology Nagpur
(Approved by AICTE, New Delhi and Recognized by DTE, Maharashtra)
An Autonomous Institute Affiliated to Rashtrasant Tukadoji Maharaj Nagpur University, Nagpur
Accredited by NAAC with A+ Grade
Session: 2023-2024
 Index

Sr. No. Topic Page No.

1. Introduction 3-4

2. Concept of startups 4

3. Stratup India Policy 4-5

4. Exemption Of Startups 5-6

5. Case Studies : Success Stories Of Good 6

Governance Startups
6. Conclusion 6-7

7. Refrence 8

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 Introduction

Introduction come in various forms, and they can span across different
industries and business models. Here are some common types of startups:

1. Tech Startups: These startups focus on developing innovative technology

products or services. They often involve software, hardware, or a combination
of both. Examples include software companies, app developers, and hardware
manufacturers.

2. E-commerce Startups: E-commerce startups operate online marketplaces,

retail websites, or platforms that facilitate the buying and selling of products
and services. Examples include Amazon, eBay, and Shopify stores.

3. Social Networking Startups: These startups create social media platforms or

apps that connect people and enable them to share content, network, or
communicate. Facebook, Twitter, and LinkedIn are prominent examples.

4. Healthcare and Biotech Startups: These startups focus on developing

innovative solutions in the healthcare and biotechnology sectors. They may
create new medical devices, drugs, or digital health platforms.

5. Fintech Startups: Fintech (financial technology) startups leverage technology

to disrupt and improve the financial industry. They offer services such as online
banking, payment processing, lending, and investment platforms. Examples
include Square, PayPal, and Robinhood.

6. SaaS (Software as a Service) Startups: SaaS startups provide cloud-based

software solutions to businesses and individuals. They often operate on a
subscription-based model. Examples include Salesforce, Slack, and Dropbox.

7. Marketplace Startups: These startups create platforms that connect buyers and
sellers, such as Airbnb for short-term rentals or Uber for ridesharing.

8. Food and Beverage Startups: These startups focus on the food and beverage
industry, offering unique products, meal delivery services, or restaurant
technology innovations.

9. Cleantech Startups: Cleantech startups develop eco-friendly and sustainable

solutions to address environmental issues. This may include renewable energy,
waste management, and water purification technologies.

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10. Subscription Box Startups: Subscription box startups curate and deliver
products to customers on a regular basis. These products can range from
cosmetics and snacks to books and clothing.

These are just a few examples, and startups can span a wide range of other
sectors and niches. The common thread among startups is their pursuit of
innovation, growth, and disruption of traditional industries.

CONCEPT OF STARTUPS

❖A startup company (startup or start-up) is an entrepreneurial venture which is

typically an emerging, fast-growing business that aims to solve an unmet need
by developing a viable business model around an innovative product, service,
processor a platform.

❖ A startup is usually a company designed to effectively develop and validate a

scalable business model.

❖ Start-ups may have high rates of failure, but the minority of successes
includes companies that have become large and influential.

❖ Business models for startups are generally found via a "bottom-up" or "top-
down “approach. A company may cease to be a startup as it passes various mile
stones, such as becoming publicly traded on the stock market in an Initial Public
Offering (IPO), or ceasing to exist as an independent entity via a merger or
acquisition.

❖ Startup India campaign is based on an action plan aimed at promoting bank

financing for start-up ventures to boost entrepreneurship and encourage startups
with jobs creation. The campaign was first announced by Prime Minister
Narendra Modi in his 15 August 2015 address from the Red Fort.

STARTUP INDIA POLICY

■ Start-ups policies; ■ Government initiatives ■ Exemptions for Start-ups ■ Tax

benefits ■ Cooling period for start ups

After this amendment, following entities are recognised as start-ups: An entity

shall be considered as a Startup:

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 Up to a period of ten years from the date of incorporation/ registration, if it is
incorporated as a private limited company (as defined in the Companies Act,
2013) or registered as a partnership firm (registered under section 59 of the
Partnership Act, 1932) or a limited liability partnership (under the Limited
Liability Partnership Act, 2008) in India. ii. Turnover of the entity for any of the
financial years since incorporation/ registration has not exceeded one hundred
crore rupees. iii. Entity is working towards innovation, development or
improvement of products or processes or services, or if it is a scalable business
model with a high potential of employment generation or wealth creation.
Provided that an entity formed by splitting up or reconstruction of an existing
business shall not be considered a ‘Startup’.

Explanation: An entity shall cease to be a Startup on completion of ten years

from the date of its incorporation/ registration or if its turnover for any previous
year exceeds one hundred crore rupees.

EXEMPTIONS FOR STARTUPS

1. Simple process Government of India has launched a mobile app and a

website for easy registration for startups. Anyone interested in setting up a
startup can fill up a simple form on the website and upload certain documents.
The entire process is completely online.

2. Reduction in cost the government also provides lists of facilitators of patents

and trademarks. They will provide high quality Intellectual Property Right
Services including fast examination of patents at lower fees. The government
will bear all facilitator fees and the startup will bear only the statutory fees.
They will enjoy 80%reduction in cost of filing patents.

3. Easy access to Funds A 10,000 crore rupees fund is set-up by government to

provide funds to the startups as venture capital. The government is also giving
guarantee to the lenders to encourage banks and other financial institutions for
providing venture capital.

4. R&D facilities Seven new Research Parks will be set up to provide facilities
to startups in the R&D sector.

5. Tax holiday for 3 Years Startups will be exempted from income tax for 3
years provided they get a certification from Inter-Ministerial Board (IMB).

6. No time-consuming compliances Various compliances have been simplified

for startups to save time and money. Startups shall be allowed to self-certify

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compliance (through the Startup mobile app) with 9 labour and 3 environment
laws.

in the success and sustainability of startups. These fledgling enterprises, often

characterized by limited resources, rapid growth, and fierce competition, can .

Case Studies: Success Stories of Good Governance in Startups

• HubSpot: Founded in 2006, HubSpot is a marketing software company

known for its strong commitment to good governance. The company
maintains a clear separation of duties between its CEO and CFO,
conducts regular board meetings, and has established a code of conduct
and whistleblower policy. These governance practices have allowed
HubSpot to attract top talent and earn the trust of investors.
• Airbnb: Airbnb, the short-term rental giant founded in 2008, has also
thrived thanks to good governance. The company boasts a board of
directors with experienced business leaders and independent directors, a
code of conduct, and a whistleblower policy. These governance measures
have enabled Airbnb to rapidly scale its business and become one of the
world's most valuable startups.

Conclusion

In the world of startups, where every decision can make or break a company,
good governance stands as a cornerstone of success. By embracing good
governance practices, startups can establish trust with investors, mitigate the
risk of fraud and corruption, and champion transparency and accountability.
These principles empower startups to navigate the challenges they face on their
path to achieving their goals and making a lasting impact in their respective
industries.

Understanding corporate governance

Governance is a shared responsibility of the founders, investors, and the board.
Alignment between these stakeholders ensures that companies are well-
governed and leads to benefits which contribute to long-term success and
sustainability. Key benefits include:

Improved financial performance: Effective governance helps companies make

sound strategic decisions and allocate resources more effectively, leading to
better economic outcomes for all stakeholders.
Accountability and ownership:
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 Well-governed companies have defined delegation of power which brings
accountability and ownership to the individuals for their actions and decisions.
This leads to transparency, trust and credibility which are important for the
long-term success of the company

Attracting and retaining investors:

By demonstrating a commitment to transparency, accountability and ethical
behaviour, well-governed companies can attract and retain investors and
improve their access to capital.

Enhancing reputation and brand value:

Companies with strong corporate governance structures are seen as trustworthy
and ethical, which enhances their reputation and brand value. This can lead to
increased customer loyalty, stronger partnerships, and a better ability to attract
and retain top talent.

Proactive risk management:

By implementing risk management policies and procedures, companies identify
and manage risks before they become significant problems, which reduce the
likelihood of financial losses, regulatory penalties, and reputational damage.
Establishing the board
Finance and external audit
Have someone oversee the finance function
Company should adopt accounting policies and consistently apply them
Company should appoint a competent audit firm and complete audit on time
Track key performance parameters, related-party transactions and cash on a
monthly basis; disclose to key shareholders

Compliance monitoring
The company should be aware of compliance requirements Statutory and
regulatory compliances should be met to keep the operations and company
running

Expansion of the board role Expand the board role to add experts from time to
time as needed, including investor nominees
Conduct four meetings in a year i.e., one in a quarter with a predefined agenda
The board meeting should be minted and decisions & resolutions passed should
be documented in compliance with applicable law The board should oversee
compliance, governance and financial reporting matters
The delegation of responsibilities should be approved by the board
Delegation of powers involving matters subjected to investor rights should
follow the due process of investor approval
Secretarial and other compliances

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 Knowledge about growing compliance requirements, both local and
international (as required), should be proactively obtained with external help if
needed. The board should be provided with periodic reporting on the
compliance status

References
• Startup Governance Playbook. Deloitte, 2023.
• "The Importance of Good Governance for Startups." Harvard Business
Review, 2022.
• "Good Governance: A Key Ingredient for Startup Success." Forbes, 2023.
• "How Good Governance Can Help Startups Scale." Inc. Magazine, 2023
• "How HubSpot Built a Strong Culture of Good Governance." HubSpot
Academy, 2023
• "Airbnb's Commitment to Good Governance." Airbnb Newsroom, 2023.
• https://www.linkedin.com/pulse/crucial-role-good-governance-startups-
rajveer-singh
• https://scholar.google.com/scholar?hl=en&as_sdt=0%2C5&q=Impact+an
d+Royle+of+good+goverance+in+best+practice+and+practical+framewo
rk+four+different+types+of+startups.&btnG=
• https://www.researchgate.net/publication/247833485_Effective_governan
ce_for_start-
up_companies_Regarding_the_board_as_a_strategic_resource

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THANK
YOU