Angel investors will think twice

Entrepreneur News:

The government’s proposal to introduce start up tax only spells doomsday for the just grooming start up initiative. On one side the MSME wants to increase the base of upcoming entrepreneurs in the country and one the other side the union government plans to kill the very idea of start up, with this rude weapon. Not only will this tax have adverse effect on the grooming industry, it will also make the angel investors or seed investors think twice on investing. And when they turn choosy, only one in a ten or twenty will be funded and the remaining will turn obsolete. Even in spite of being a developed nation US has proposed and supported the `JOBS ACT.’ Whereas on the other hand when we need more start ups to bring in a better financial results this new initiative of the government is just suicidal. And would you imagine a whopping 30% of the funded amount will only drown the initiative to unreachable solitude.

Even industry experts feel that this proposal of the union government could have come from the financial administration heads keeping in view of the 2G irregularities. But considering that if a rule is framed and works evenly on the elite and the struggling alike would only mean a bomb on the city with criminals. Does that mean the common’s death is not in concern feel business pundits.

Indian Angel Network co-founder, Saurabh Srivastava, who has been a part of investments in over 30 start ups in the last 6 years, felt, ` For example an angel investor may invest Rs 1 Cr in the Company that has no revenues and no profits and the tax official, unless otherwise “persuaded,” would tax the company at 30% for no reason at all and convert an investment into income.’ The angel investment funds on ideas and not many might take off. And once the project take off the venture capitals come into the scene. It really becomes difficult for Angel investments to operate felt IAN. He said, `For VC’s to fund 10 companies we need 1000 entrepreneurs to be funded by angels. It is hard to think of a more retrograde measure and one can only hope the framers of this clause did not fully appreciate the unintended damage it would do. It deserves to be withdrawn immediately.’

Hope the government headed by a great financial wizard who had changed the face of the nation by his policies as a Finance Minister, must talk to his colleague and look into the longer repercussions the policy would hold and try to get it withdrawn.

FYI:

It is the firm belief of Way2World that every new idea when nourished in the right direction can be an opportunity to sow seeds for an Enterprise development, while building the Brand equity for proper penetration. All Innovators are creators and are sure to rise iconic, when they utilize their new found innovations for better humanity.