How can you get funding for a start-up in Assam? Here's the answer

Guwahati: Assam has launched a series of funding opportunities for new entrepreneurs through different agencies, institutions, and the like.

Funding refers to the money required to start and run a business. It is a financial investment in a company for product development, manufacturing, expansion, sales and marketing, office spaces, and inventory. Many startups, to prevent debts and equity dilution, choose to not raise funding from third parties and are funded by their founders. However, some startups do raise funding, especially as they grow larger and scale up their operations. So how does one get such funding in Assam, the most populous state in the Northeast?

Tejaswini Assam Ideathon 2024, for instance, is a business idea contest aimed at promoting and identifying women from Assam with an entrepreneurial mindset, providing solutions to local problems. 

The initiative is an initiative of the Women's Cell, Industries, and Commerce Department along with the North Eastern Handicrafts and Handlooms Development Corporation Ltd. (NEHHDC), which aims to provide a platform for entrepreneurial women aged between 18 and 50 to pitch their ideas and earn recognition in a wider network.

The competition offers prizes such as the first prize of Rs 1,50,000, the second prize of Rs. 1,00,000, and the third prize of Rs. 75,000 The top 50 ideas will receive expert guidance and mentorship support. The three best student ideas will receive Rs. 25,000 each, along with a prize money of Rs. 50,000 for women in technology. "The grant winners need to inform on the expenditure to the grant provider", a Tejaswini judge told Business North East.

The Venture Labs Foundation is launching an Entrepreneurship in Residence (EiR) and grant under the MeitY TIDE 2.0 program, offering Rs 4 lakh for startups with ideas or Proof of Concepts (POCs) to transform their concept into a working prototype and Rs 7 lakh for startups with prototypes to translate their prototype into a Minimum Viable Product (MVP).

The Food Processing Startup Grand Challenge 2.0 is a national-level initiative by the Ministry of Food Processing and Industries (MoFPI) and Startup India, aiming to stimulate innovation and accelerate technological advancements in the food processing sector. The second round proposed as a run-up to World Food India 2024, aims to stimulate innovation by encouraging startups to develop novel technologies.

ICT-based startups can apply for the MeitY Tide 2.0 grant, which offers Rs 7 lakh for a year to develop a Minimum Viable Product from Proof of Concept. Other types of financing for startups include equity financing, debt financing, and grants.

Saanchi Connect, a leading funding agency said, "Funding start-ups is important as it fuels innovation, creates job opportunities, and drives economic growth".

Other types of funding involve selling a portion of a company's equity in return for capital. On the other hand, Debt financing involves borrowing money and paying it back with interest. As far as grants are concerned, there is no repayment component, and no risk for the financier, startup, or lender. However, startups may need to give up a portion of their ownership to shareholders.

Startups face less pressure to adhere to a repayment timeline, while investors strive to achieve growth targets. Grants are distributed in tranches based on the fulfillment of corresponding milestones, resulting in a status that constantly works to achieve milestones. Equity investors usually prefer involvement in the decision-making process, while debt funds have less involvement. 

Sources for equity financing include angel investors, self-financing, family and friends, venture capitalists, crowdfunding, incubators/accelerators, banks, non-banking financial institutions, government loan schemes, central and state governments, corporate challenges, and grant programs of private entities.

However, those looking for funding opportunities can sometimes be entrapped by fraudsters. The Office of Inspector General (OIG) of USAID mentions ongoing fraud schemes involving the misuse of the agency's name, agency symbols, and letterhead to defraud job applicants, grant applicants, and visa program applicants. The scammers require victims to pay fees associated with job, grant, and visa applications through wire transfers or mobile money applications. The OIG has identified hundreds of likely applicants who have been defrauded by these schemes and incurred hundreds of thousands of dollars in monetary losses.