Decoding Karnataka’s Multi Sector Startup Policy

Bengaluru is often referred to as the Silicon Valley of India and rightfully so.

Did you know that the city houses roughly 212 software companies?

Now, that’s quite a feat! It also has the highest percentage of engineers in the world. Yes, you heard that right, in the world! Keeping these facts in mind, there’s no surprise why Bengaluru is such a hotbed for entrepreneurs and startups. Given the surge in the number of startups popping up all across the country, it is bang in the centre of all the action, no pun intended.

The Karnataka Government has launched a startup policy from 2015-2020 which aims to create a world-class startup ecosystem through strategic investment and policy interventions, leveraging the robust innovation climate in Bangalore.

This policy, through a variety of ways, aims to provide legs to the many startups coming up in the city specifically and in Karnataka in general. Let’s take a closer look at how the startup policy will manifest itself in this environment.

New Age Incubation Network

This benefit targets engineering colleges, professional and post-graduate institutions in tier-two cities.

What exactly is the benefit:

• Grants to support Op-ex in college incubators.
• Get upto INR 3 Lakhs per project as Annual Financial Support.
• Upto 10 projects per college.
• Training for faculty and students.
• Internship stipends.
• Exposure to international startup destinations, networking events etc
  How the benefit is administered: Through an annual call for selection of new colleges.

Technology Business Incubators

This benefit targets institutes of higher learning with well-developed research and development facilities to foster strong links between R&D and commercialisation of technologies.

What exactly is the benefit: The state support would be for the initial capital cost for equipment, facilities and recurring costs of management of the Technical Business Incubator TBI for three years, which is extendable by another two years.

How the benefit is administered:

• The proposal must be submitted by an eligible academic institution that has adequate expertise and infrastructure to support the TBI.
• The TBI must be a registered Trust/Society/Section 8 Company to avail the incentive.
• The Host Institution is to provide land and built up space for the creation of a TBI.

Idea To Proof Of Concept Funding

The scheme enables technology innovators and entrepreneurs to pursue a promising technology idea and validate proof of concept (POC).

What is the incentive:

• The state support would be in the form of a grant-in-aid.
• The funding will be released in installments against agreed milestones.
• The funding level is up to INR 50 Lakhs.

How the incentive is administered:

• A biannual call for proposals to be made for selection.
• Selection through the state level screening committee.
• Selected implementation partners to help the Government of Karnataka with the implementation and periodic monitoring and review.

Creating Incubation Infrastructure

The state will invite globally well known accelerators and incubators to set up world class incubation centres, accelerators, or expand existing facilities on a PPP basis.

What exactly is the benefit: The centre must provide facilities like R&D labs, common centre for prototyping, common testing/QA/QC labs, design studios and tool rooms, fab labs, biotech wet labs, greenhouses animal houses, infrastructure support, mentor and investment connects, legal and accounting services.

How the benefit is administered: Either through the partner RFPs or in partnership with industry associations.

Startup Fund Of Funds

A fund of funds will be allocated for investing in venture funds that invest in startups in various sectors. A portion of the fund of funds shall be utilised for angel stage funding.

What is the benefit: Mobilising INR 2,000 Cr of funding for investments into startups through Government intervention alone.

How the benefit is administered:

• Selection of fund manager to operate and mobilise funds.
• Investment committee with experts from Government, academia and industry.
• Investment in venture funds with credible background in operating technology sectors.

Channelising Innovation For Social Impact

This grand challenge is for entrepreneurs with workable and scalable solutions to challenges faced by society.

What is the benefit:

• The winners of the grand challenge will be awarded an initial and follow-on funding.
• Winners will be assisted to implement their pilots.
• Winners will automatically qualify for incubation space on a preferential basis.

How the benefit is administered: Five grand challenges per year. Selection committee to identify challenges having social and governance impact. Selection through open competition.

Incentives And Concessions

Once registered under the KSUC your startup shall be eligible for the following incentives:

• Self-certifications for various statutory permissions.
• VAT/ CST/ ST exemptions.
• Reimbursements of patents spends.
• Reimbursements of marketing spends.
• Subsidised seats in Government supported incubators.
• A better deal for women entrepreneurs in incubators.
• Access to idea to a POC Funding.
• Participate in Government sponsored exposure visits.
• Make a difference through “Grand Challenges.”
• Avail funding under the Government of Karnataka’s fund of funds.
• Other incentives under the Government of Karnataka policies

How Do You Know Whether You’re A Karnataka Startup?

You are a Karnataka startup if:

• Yours is a Technology-based startup.
• Your revenues are clocking under INR 50 Cr.
• Your company/entity is not older than 4 years if you are an IT-based company and 7 years if you are a BT startup.
• More than 50% of your qualified workforce is in Karnataka.

You are not excluded under the other exclusion principles under the policy.
This is everything that comprises the Government of Karnataka’s startup policy 2015-2020.

For any more information contact the Karnataka Startup Cell at: startupcell@bangaloreitbt.in. We also have a few seats left in our Bangalore Scholarship Program which involves a subsidised price for Bengaluru-based tech startups who qualify for the programme. So, don’t waste any more time and apply here.

[This post first appeared on 91springboard’s blog and has been reproduced with permission. 91springboard is a vibrant coworking community created for startups, freelancers and business owners with a startup mindset.]

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