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Entrepreneurship as a trend in India


1.Should an Entrepreneur in Technology in India pursue a Product Idea or Service Idea?

2.What are the Pros and Cons of Each Choice in Financing?

3.How can an Entrepreneur Pursue a Product Idea and Minimize his/her Risks?

4.How does an Entrepreneur's Personal attributes Influence his/her Course?

5.What are the Challenges and Opportunities in each kind of funding: debt, venture, angel, etc. in the Indian Context?

An entrepreneur is a person who stood for what he/she believed in and was able to transform the lives of others through his/ her actions'. (Swetha and Rao, 2013) Since few past years, it has been analysed that youth of India are very keen take risk and experiment with his ideas and beliefs. In this case report, the concept of entrepreneurship and its various aspects such as finance management and risk management has been illustrated. Furthermore, the study is focused on the challenges and opportunities related to different types of funding in the Indian market. Lastly, personal attributes and factors that influence the entrepreneurship in India have also been highlighted here.  

Now days, every individual is so enthusiast to do what they believe in and eager to explore the possibilities with their abilities and skills. Entrepreneurship is the new trend in the Indian market and every graduate or post graduate from the prestigious college do not want to go for a high paid job, despite set up its own venture and risk for greater return on investment (Thakur, 2016).  In fact, in India entrepreneurship is one of the key driving forces of the Indian markets now. Government is supporting small businesses and start-ups which is encouraging people in entrepreneur-driven innovation. India is changing its traditional business and entrepreneurship rules while setting example world wide by aspiring millions of people about the way they see entrepreneurship (Thakur, 2016).

From the most initial stage, the selection of appropriate and best option between the product or service idea is the difficult and crucial stage. It is affected by many factors such as interest of entrepreneur, nature of organisation and its products and services provided for the customers (Kadam, et al., 2011). Intentions, aims and objective of the organisation/entrepreneur also decide the selection of choice between product and service idea. If the entrepreneur looks out for product idea, it should be based on the innovation and new technological advancement. However, most of product based ideas are aimed at earning high profit and take competitive advantage over other competitors with the new process or approach. It has many legal formalities involved in it such as legal documentation, patent and intellectual rights related legislations. 

In addition to it, providing diversified or unique services to the customers is a matter of experience (Sahay, 2009). The experience of the services can be enhances with the integration of information technology or any innovative product idea as well. Services are generally based on non-profit motives but can be converted into commercialised form by involving addition services. There is no certain parameter to decide of choosing the idea between product and service for an entrepreneur, it is just ground on the thought and love of entrepreneur what he/she wants to offer to their customers.

Choosing between product and service idea

Along with this, before concluding to any selection entrepreneur should determine some aspects like whether the product/service is better then any of the existing options to the customers or the product/service is the real need in the market and prospective buyers will buy it again and again (Westhead and Wright, 2013). Is the new product or service idea will become number one choice of customers over each competitor’s choice? These questions will help in deciding the ultimate answer to the entrepreneur about the selection between the product or service idea.

Drawbacks and Benefits in Financial Management

An entrepreneur needs money or finance to execute its product or service ideas into reality. There are certain stages of entrepreneurship and requirement of different amount of financial support in these stages (Gandhi, 2014).  At the beginning of any plan the product development cost is the only need for an entrepreneur, after that marketing and commercialisation of product/service needs fund, then management of product and establishment of organisation stage comes that requires a huge amount of money.

There are fundamentally four choices of financial sources that are personal funding, angel investors, venture capital funds and corporate investors. Personal funding is further divided into two types first is personal investment of own capital where a person invests its own assets in the form of cash or collateral on assets (Kumari, I. 2014). An individual needs not to pay any interest or share profits with but, in case of any unfortunate happening the cash can not be recovered and can create bankruptcy. Second is borrowing from loved one's or relatives where quick cash can be arranged easily plus entails flexibility in terms of payment options with time relaxation (Kumari, I. 2014). However, only initial capital requirement can be fulfilled, success pressure of the project leads to bitterness in the relationships, unnecessary involvement and disturbance in the project also strains the situation between relatives. 

Angel investors, exchange their cash with a share of equity in the company as they have the wealthy background and invest their money in the market like this. Investment size is less than $1 Million and they are often deal individually or in groups. They are serious investors than relatives or friends (Collins, et al., 2016). They give you guidance and access to their important contacts because they are also experienced in the market. They have flexible business agreements than venture capital firm. On the other hand the control and management of the company can be forced to loose because of greater risk nature of angel investment.

Apart from this, venture capital funding and corporate investors are related with the professional investors that exchange their large amount of money with the share of equity in the company (Collins, et al., 2016). They look out for big investment and even more return on investment. They get their money out if the company is acquired by some other company or exposed to public investment. As a merit they provide a large sum to any entrepreneur and give their best expertise and professional help in existing or growing new venture (Gandhi, 2014). These venture capitals and corporate investors hold well renowned positions in the market and thus bring credibility to the company. The connection in financial and capital market of venture capitalists is so strong that gives incredible network to new entrepreneurs (Kumar, 2012).

Financing entrepreneurship in India

On the other side a demerit, venture capitalists are just behind the return on investment they have made by hook or crook they want to earn money; they can even throw you out from your own company for this. The more indulgence of upper experienced capitalist or corporate investors may complex the management situations. Moreover, the venture capital includes two types of funding, direct funds via corporate venture funds and indirect funds via independent venture funds.

Contrary to all this, there are some facilities of funding offered by government of India as well as banks (Bessant and Tidd, 2015). Bank uses collateral to secure their loan, but individual can take sufficient guaranteed amount of cash and in case of adverse condition declare him/herself bankrupted to protect its assets. As a disadvantage bank repayment conditions incorporates interest and dues on time (Vega and Lam, 2015). In addition government grants, grants are free money and have very law interest rate in case of loans but, it has lots of red tape and availability of funds is very rare and approachable.

The start-ups or entrepreneur should always analyse the external and internal environment of the market that can impact their product ideas. The product idea is founded on the high calibre, innovation and skills of entrepreneurs (Manimala and Wasdani, 2015). In addition to this, there are many risks that are involved in the entrepreneurship which should be invigilated from the start. These risks can be minimised with some precautions and approaching them efficiently. First is product risk that is related with failing, theft or stealing of product idea. Product should be closely analysed before launching in the market and factors that can affect its growth (Kumar, 2012). Idea can be stool by the competitor that can be only protected with limited access or share with only trustworthy people of product idea. Moreover, physical robbery and theft can be protected by camera security, limited access of data and advanced lockers. Additionally, insurance is the best way to minimise these risks.    

Financial risks involve the funding problem or physical lose of money. Physical lose can be secured by the above methods for robbery and theft. However, funding risks can be prevented by legitimate paper work and proper accounting and recording of cash flows (Greene, 2016).  Team risk is another risk where employees are being enticed by rivals to disclose important information. This can be minimised again with limited access of data, office security, hiring of trustworthy employees. Execution risk is failure in the management and administration of product, it can be minimised with strategies and proper analysis of market conditions (Kshetri, 2014). Proper legalisation of the product and protection from piracy or duplicate of the product idea by patent, copyright and intellectual property right also resolves the risk involved in execution of product idea in entrepreneur.

There are various personal attributes that influences the entrepreneurship choices in Indian context such as personal qualities or traits of an entrepreneur, family background, social challenges, financial aspect, technological and policy aspect. Personal traits or qualities are individual’s personality like passion for business, risk taker, ability, courage, innovator, ambitiousness, decision maker, negotiating skills, beliefs, values, morals and openness for changes and continuous learning. On the other hand the family background is equally important, because in India people live together with their parents and their decisions are influenced by their parents thoughts and beliefs too (Gopalaswamy and Mathew, 2012). Conservative and narrow family background can challenge the individual highly; on the other hand people with open family and modern acceptance will invest their energy freely.

Types of financing options for entrepreneurship

Furthermore, factors like need for control is also driving factor that impacts on the entrepreneurial decision when funds are taken from the market. The financial assistance plays a very significant role in the success of the product idea, notwithstanding it comes with rice where innovator has to loose some control over his/her product (Raposo, et. al., 2011). Thus, it is very clear that there are certain factors that influences and ensures the product idea development and implementation. 

With different types of funding, there are integral challenges and opportunities which cannot be ignored. In Indian aspects, there are some differences from the rest of the world due to market trend, government policies, culture and personal behaviour of individuals. At first challenges related to the start-ups in India are as follows: there are very few incubators or angel investors that assist entrepreneurs (Santhi and Kumar, 2011). Because of the high risk involved in the start-up people fear loosing their money. Along with this, venture capital or corporate investors has their own problems example, need for good expertise in the organisation, lack of return on investment for more than first five years, market risk due to intense competition and several product ideas in the market (Santhi and Kumar, 2011). Lack of skilled and training labour in less capital investment is also one big problem faced by the venture start-ups (Sharifi1and Hossein, 2015).

Besides this, Indian government has focused on various start-up financial aspects to provide opportunities and encourage youth of India for large number of entrepreneurship (Anand, 2016). Start-up schemes, small funding, large funding planning and grants from government are the new possibilities for young entrepreneurs. Some of the government initiatives of India entails 'Make in India initiative', Mudra Yojna, SETU Fund, E-Biz portal, Royalty Tax (Wagh, 2016).  Financial hubs and incubators are persistently capturing the market to aid new start-ups. Innovation movement, industry parks, research parks, incubation centres, government proposals, universities assistances are some of the new support system for entrepreneurs.  

Even after this, start ups have enormous benefits in India like relaxation in various legal formation of company that is compliance regime based on self certification in labour law and environmental law, various application and mobile portals as single platform to connect government and regulatory bodies (Wagh, 2016). Further relaxations in the norms of public procurement for entrepreneurs also encourage product ideas in India. Thus, it can be seen that there are various challenges and opportunities in Indian market regarding product idea development.


From the above discussion, it can be depicted that entrepreneurship is the new trend in India. There are various factors that influence the product and service idea choices for an entrepreneur including main sources of funding. Personal assistance, venture capitals, corporate investors and angel investors are basic funding sources of financial assistance for entrepreneurs in India, besides that they all have their share of pros and cons.

There are some personal attributes like family background and control of company that affects the decision of individual while product idea development and execution. Moreover, every funding genre has challenges in the Indian market due to non establishment or lack of start-up concept in India. Lastly, government of India has emphasised on entrepreneurship and start-up in recent past years. It has also initiated various schemes and initiative for convenient funding to the new or existing start-ups.


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Gopalaswamy, A. K., and Mathew, S. K. 2012. Financing technology startups: an entrepreneur's dilemma. Emerald Emerging Markets Case Studies. 2(8), pp.1 – 17.

Greene, C. L. 2016. Entrepreneurship: Ideas in Action. 6th ed. Cengage Learning.

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Swetha, T., and Rao, K. V. 2013. Entrepreneurship In India. International Journal of Social Science & Interdisciplinary Research. 2 (7), pp. 104-116.

Thakur, Y. 2016. In India, entrepreneurship is at on all-time high.[online.] Available at [Accessed on 12 April 2017].

Vega, G., and Lam, M. S. 2015. Entrepreneurial Finance: Concepts and Cases. Routledge.

Wagh, M. 2016. Government initiative for Entrepreneurship development –Start up India Stand up India. International Journal of Commerce, Business and Management. 5(1), pp. 79-84.

Westhead, P., and Wright, M. 2013. Entrepreneurship: A Very Short Introduction. OUP Oxford.

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