Small Digital Start-ups Identify Raising Fund As Biggest Challenge: IAMAI

Ahead of the release of Government of India’s Start-up Policy, the Internet and Mobile Association of India [IAMAI] and IMRB International conducted a first of its kind survey of 785 small digital start-ups across the country. The purpose of the Survey was to identify their challenges in the next one year.

Growth, Talent Management and Fund Management are the top three challenges perceived by the small start-ups.

The larger parameters of the challenges included the following subcategories:

Key Business Challenge	Sub Categories
Growth	Growth of the sector vis-a-vis the economy
	Growth of your company vis-a-vis the sector
	Growth in terms of market-share
Talent Management	Lack of skilled personnel
	Attrition rate/latent retention
	Managerial skill vs. Technical skill
Funds Management	Challenges in raising fund
	Revenue expenditure mismatch
	Challenges of monetisation of business model
	Excessive competition crowding out funding
Competition	Increasing customer/client base
	Creating value which has relevance in the market
	Concentrating on innovation
Technology/Design	Ensuring optimum use of technology
	Balancing Quality and Growth
	Using contemporary technology in an efficient way
Regulatory Framework	Lack of reforms in regulatory framework
	Present regulatory framework is market distortionary
	Regulation has loopholes/is inconsistent
Intellectual Property Rights	Patent/Copyright protection

In order to get a better understanding, respondents were asked to rank these challenges. A break-up of the larger parameters indicate the following top 10 challenges.

While challenges in raising funds remain the primary concern, innovation and lack of skilled personnel are other major pain points for all of them. Interestingly, while all companies are concerned about raising funds, issues such as regulatory framework and monetisation of business model is not much of a bother at this stage of their operation. This is reflective of the fact that the government’s move to boost funding and develop a robust ecosystem through a series of programmes is a step in the right direction as far as supporting the small digital start-ups are concerned.

The survey was conducted across the startup innovation corridors in India. The sample break-up of the cities is given below: