India lacks enough angel investors to fund start-ups: Nasscom

PTI Updated - January 23, 2018 at 01:13 AM.

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Unlike the West, India does not have an adequate number of angel investors who can fuel the growth of the country’s thriving start-up ecosystem, industry body Nasscom has said.

“For a successful start-up ecosystem there is a need for enough angel investors who can support budding entrepreneurs from an early stage. But this is not happening in India and there is a serious lack of it,” Nasscom Vice-President Rajat Tandon told PTI.

“High net-worth individuals and corporate executives, among others, should come forward and participate in this growth story,” he said.

A recent report by Nasscom had said India ranks third among global start-up ecosystems, with more than 4,200 new-age companies.

Tandon said, “The case is very different in countries like the US. People are just waiting to invest in good companies. We should also have something like that.”

“Mainly, investors (in India) are afraid because there is a high risk of failure in these investments and also there is a lack of policy on such investments,” he added.

“Why will investors put money in such companies? They need tax benefits and a number of other things to put in their money. We have already written about these things to the Government and I am sure we can expect something by the year-end,” he said.

In his Independence Day speech, Prime Minister Narendra Modi had announced a new campaign ‘Start-up India; Stand up India’ to promote bank financing for start-ups and offer incentives to boost entrepreneurship and job creation in the country.

“At Nasscom, we are not only encouraging investors but also asking people to mentor start-ups. Like someone has a design business, they can help start-ups develop UIs and guide them in the process. In return they take some equity,” he said.

“And there are people like Ratan Tata and Azim Premji, who are making a slew of investments and helping these young entrepreneurs. They are the inspiration,” he said.

Ratan Tata has invested in a number of companies including Ola, Snapdeal, Paytm, Urban Ladder, and Bluestone. Wipro boss Azim Premji has funded companies such as Myntra and Amagi, among others, through his investment arm Premji Invest.

Published on October 29, 2015 06:25