Friday, December 30, 2016

Happy New Year 2017

Wednesday, December 28, 2016

Working Capital In Nutshell

As an entrepreneur, you must have heard time and again that working capital management is crucial to the successful operation of a business. So, what is this concept? It is the total amount of finance a company needs to invest for running its operations in the short-term. More often than not, the term “working capital” is used interchangeably for gross and net working capital, but the two are different concepts.

Sunday, December 25, 2016

Season's Greetings

Season's Greetings and a Merry Christmas to you and your family!

Monday, December 12, 2016

4 Facts About Market Sizing

Whether you are an entrepreneur writing a business plan or a recognized firm seeking to introduce a new product or service, you will need to estimate the size of the market you plan to serve. Easy as it may sound, this is the trickiest and most crucial segment of building or growing a business. You can even decide if the project is worth starting or taking further at all. Here is our basic guide to market sizing to help you start right.

1. What is Market Sizing?

When you quantify your target market on the number of possible users or revenue generation potential, it is called market sizing.

Tuesday, December 6, 2016

The Why And How of An Elevator Pitch

As a startup founder, you will frequently have to explain just what your company does. This is where the Elevator Pitch (or, Lift Pitch) comes in as a brief summary of your business, the work you do, and why it matters.

It is a short, yet comprehensive, explanation of your business to your customers and investors. The analogy of time involved is drawn with that of an escalator ride ranging up to around 2 minutes. Ideally, every owner of a business, big or small, should be able describe it in 2 minutes or less. For startups, it's even more important because it might be a tool to open the doorway to that meeting with a VC, or it can spark the dialogue that gains you that acquisition deal you were hoping for. The concept is based on the presumption that if you happen to be in a lift with the potential target audience, you should be able to generate enough interest before they reach their floor. Here’s what you should know:

Thursday, December 1, 2016

Do You Really Need A Patent Lawyer?

You have an invention -- something that would fill a need and make life easier. It might even make you some money, if you could get the exclusive right to manufacture it or sell the rights to it. In other words, you need a patent. But the patent attorney wants money to file a patent application for you. Must your invention go waste or should you apply for a patent yourself, without a lawyer?

The Law Does Not Require An Attorney 

Routes for filing a patent application:
  • Through patent attorney/lawyer
  • Through online channels
  • By self in the patent office (physical)

Monday, November 7, 2016

Will GST Lead To Inflation?

With the April 1, 2017 GST deadline fast approaching it is a race against time for the lawmakers, tax department and taxpayers alike. New developments are happening each day. The Goods and Services Tax Council has made the much anticipated move and decided on the final tax rates. While much is still up in the air, the consumers and businesses have their own share of concerns about the possible impact of this mega change. In this post, we are breaking down the two areas of interest based upon information available so far.

Friday, October 21, 2016

Difference Between Memorandum and Articles of Association

Unlike in case of Memorandum of Association (MOA), registration of the Articles of Association (AOA) is a non-binding requirement for a company. Section 5 of the Companies Act 2013 provides that the Articles of a company are to contain the rules and regulations for management. Accordingly, the MOA deals with the powers and limitations of the company, while the AOA deals with the powers/limitations of the management personnel. As mentioned, registration of the Articles is optional.

Sunday, October 16, 2016

What is A Memorandum of Association

The Memorandum of Association (MOA) is a registered document containing all the legal data essentially required for the incorporation of a company and available to the public. Section 4 of the Companies Act 2013 describes the 5 clauses that must be included in the document. The preparation of a Memorandum is a legal requirement for limited liability companies only.

Thursday, September 15, 2016

New Procurement Norms and Fast-Track Exit Procedures

It is mandatory for government departments and public sector units to procure at least 20% from the micro and small organizations. The rule that came into effect from April 1, 2015 was designed to create greater opportunities for micro and small enterprises (MSE). To support the entrepreneurial ecosystem, the Startup India Action Plan recommended additional relaxation for tiny and new business units.

Wednesday, September 14, 2016

Self-Certification for Startups

The Government has brought into effect most of promises regarding ease of doing business as laid out in the Startup India Action Plan. Apart from getting their businesses registered in one-day, startups can now self-certify on labor-related statutory compliances.

Sunday, September 11, 2016

One-Day Company Registration

At the time of announcing the Startup India Action Plan and Budget 2016, the Government had promised to expedite business registration processes as a measure of improving ease of doing business. One-day business registration, after some initial technical glitches, has become a reality. Private companies, OPCs and public companies can now get up and running fairly quickly.

Wednesday, September 7, 2016

Collateral-Free Loans for Small Businesses

Startups, micro and small enterprises usually do not find much favor with banks. To break this pattern in India, the Government has come up with various schemes that ensure small business loans at relatively easier terms. Most schemes are backed by credit guarantee and refinance for the lending institution. It helps the borrowers by doing away with the requirement of collateral or third-party guarantee. It protects the lenders’ interest in case of a default, making them more willing to sanction loans to micro and small players. It is important to note that banks may insist on personal guarantee by proprietor/partners, which is not considered a third-party guarantee. This is because in case of proprietorship or partnership, the owners have unlimited liability.

Wednesday, August 24, 2016

Fast-track Patent Registration in India

India wants to establish itself as a patent registration hub, such that the startups from anywhere can register here. Towards this end, the Government has implemented a lot of intellectual property related proposals laid out in the Startup India Action Plan (Read here). The proposals now have a concrete structure in the form of the Patent (Amendment) Rules, 2016. These Rules aim at lower costs and faster turnarounds. 
For the first time, the definition of startups has been introduced, taking the number of possible types of applicants to four – individuals, small entities, other than small entities, and startups. The Government is extending the benefits under the Startup Intellectual Property Protection (SIPP) scheme and the startups must satisfy the eligibility criteria.

Thursday, August 18, 2016

GST For Ecommerce: What It Means

The Goods and Services Tax is soon going to be a reality in India. While the Government is still finalizing the rate and fleshing out the details, here is a look at what GST means for ecommerce, one of the biggest startup sectors. The Draft Bill talks about two key players:

Monday, August 1, 2016

What is a Patent?

The Indian law for patents is enshrined in the Patents Act, 1970 as amended by the Patent (Amendment) Rules, 2016. So what is a patent? A patent is an exclusive monopoly given by the Government to an inventor over his creation (innovation) for a limited period of time. Innovation can be understood as a brand new item or process, which is ingenious and has commercial applicability. The ownership of a patent confers on the patentee the exclusive right to use, make or sell his/her creation for the term of the grant. Patent is a form of intellectual property and such rights are enforceable in the court of law.

Thursday, July 28, 2016

Is Silicon Valley Being Irrational About Tech Startups?

Reproduced from our original post on LinkedIn (June 1, 2016)
Donald Trump says a lot of things, mostly crass, divisive and slighting. He has spoken once again - this time about a possible tech startup bubble, which is due to pop. 
"I’m talking about companies that
have never made any money,
that have a bad concept and
that are valued at billions of dollars,
so here we go again."

Monday, July 25, 2016

How To Choose Your Business Structure

If you are looking to start a new business, making your way through the legalities is the going to be the least interesting part. Though, you’ll do well to acknowledge that they actually form an essential part of initial business planning that converts your idea into a reality.
For instance, legal business structure is an enabler without which business operations or growth could get into a deep freeze. Let’s say, you are setting up as an online retailer. Nearly all marketplaces will ask for your business registration before discussing anything else. Similarly, most investors, credit suppliers, and channel partners would want to see your company’s existence in government records. Not to mention, it is a prima facie indicator of the seriousness and trustworthiness of an enterprise.

The choice largely boils down to compliance burden, tax implication, and ease of operation. Following are the possible ways to get going in India:

Thursday, June 23, 2016

After The Brexit Referendum

Updated: June 27, 2016

The much speculated Grexit is no more a threat, at least for now. Instead, last Friday, June 23, 2016, the Britons did something unthinkable – the Brexit. A lot happened during the referendum campaingning - arguments, fear mongering, gossiping, and even, false promises. The results have brought in a fresh wave of shock, allegations, disillusionment, and desperation. While all this may not seem to matter now as the deal is sealed, the possibilities (read, fallout) that may become realities still command attention. Some of the notable events so far:

  • UK stands divided on voting lines
  • David Cameron quits
  • Pound tanks to a 31-year low, currently trading at 1.34 per Dollar
  • Approximately, $2 trillion wiped out from world markets
  • UK set to lose its AAA rating: S&P
  • Boris Johnson garners support for his claim to the Prime Minister's office
  • Post results Bregret sets in
  • Over 300,000 Britons sign up for a fresh Parliamentary debate of Brexit
  • EU asks for exit process to start as early as Tuesday, June 28, 2016
  • Call for a second independence referendum in Scotland has increased; it voted 62% in favor of staying with the EU
Friday's events not only stumped the experts worldwide, they also brought the judgement of the average English voter into question. It may be hard to imagine how the political ambitions of an unloved former London Mayor (Boris Johnson) and a repeatedly rejected Nigel Farage could blind the public to reason. Farage, the UK Independence Party chief, has a history of losing each of his attempts in the General Elections. "Google Trends" probably holds the answer. It reported a spike of 1024% in searches related to Brexit after the results were formally announced!

Saturday, June 18, 2016

Why Are Startups Losing Valuations?

There has been a barrage of not-so-good news for the startup community, with funds flow ebbing and investors toning down their expectations. Morgan Stanley Institutional Fund Trust Mid Cap Growth Portfolio, Fidelity Rutland Square Trust Strategic Advisers Growth Fund and Valic Company I Mid Cap Strategic Growth Fund have marked down the value of their investments in Flipkart. On the other side, Zomato too was marked down by HSBC. RBI Governor recently remarked, “If the only reason you are getting revenues, not profit, is because you are selling based on 50 per cent discount, it can’t be viable in the long run.”

Thursday, May 19, 2016

Oil Price Trend Update

We published an article, What Is Keeping The Oil Prices Low? in February that highlighted the reasons behind the current downturn in crude oil prices and its impact. The following is an update on that material.

The June WTI is trading close to $48.35, while the July Brent is at $49.11, implying an improvement by about 49% from our last post. At any point in time, there is a complex dynamics behind crude oil trends that combines the impact of long and short-term factors. Read How is Oil Price Really Determined?

The Supply Side

OPEC has released its May 2016 report and has predicted non-OPEC oil production to come down by 0.74 million barrels per day (mb/d) this year. The OPEC think-tank is exploiting its dominant market position and financial bandwidth to wait out its rivals.
Accordingly, it has given no indication of any production cuts and the results are evident. The biggest impact of the low price regime is expected to reflect in the U.S. With profits under severe pressure, the supply is likely to contract by 0.43 mb/d in 2016. As many as 69 U.S. shale oil companies have already filed for bankruptcy in the current year alone. China, Mexico, UK, Kazakhstan and Colombia are also expected to reduce production in 2016. On the other hand, Canada, Brazil, Russia and Malaysia might increase their output. In addition, Iran has ramped up its production faster than anyone thought. Nevertheless, the oversupply is believed to be shrinking and these cyclical headwinds are supporting the current prices.

Friday, May 13, 2016

Why Are Some Startups Wary Of Equity Venture Capital

On an average, out of every 10 startups 1 will be truly successful; 3 will completely fail; and the rest will tide along till they too collapse, or get taken over. The reasons could be numerous, ranging from weaker domain expertise to lack of planning. However, limited access to required funds still poses the biggest challenge for a budding enterprise. Once the seed capital (mostly supplied by entrepreneur’s own savings or by friends or family) runs out, the need to arrange alternative means to remain afloat becomes an imperative.

Friday, April 29, 2016

10 Tax Announcements All Startups Should Know

Startups and MSMEs have caught the Government’s attention as potential sources of economic growth and employment generation in India. The Prime Minister rolled out Startup India Action Plan in January this year, indicating that the Government is serious towards creating an enabling environment for this sector.

Eurion Constellation published an article series on some of its key announcements:

The current year’s budget has made its recommendations and some implementation deadlines have passed. So, now is the time to evaluate whether the startup sector is really on the path to the promised land. In this series, we will cover the important new announcements and concrete policy steps taken, beginning with tax sops.

Thursday, March 17, 2016

How the Presumptive Scheme Taxes More Than the Actual Profits

Finance Bill 2016 has introduced section 44ADA to extend presumptive tax scheme to professionals. Opinions remain divided on whether 50% is too high a rate. Another implication of it has stumped partnership firms, where taxable profits end up more than the actual profits!

Tuesday, March 15, 2016

Budget 2016 Rationalizes Presumptive Tax Provisions

One of of the key challenges faced by the Government today is increasing the ease of doing business in India that will provide impetus to self-employment and instill confidence among the investor community. Presumptive taxation is one such provision in the Income Tax Act. If you are a startup, micro or small enterprise you might want to consider it.

Friday, March 4, 2016

Did Budget 2016 Snub Indian Taxpayers?

Budget 2016 has left behind a trail of disgruntled taxpayers with some strong pressure for rollback, particularly in case of EPF taxation. The measure in itself may not be "anti-people", but the lack of clarity in budget speech definitely led to some misinterpretation and the Government had to clarify. Read details about why taxpayers are unhappy about certain proposals and what is the Government's rationale behind them. 

Our pre-budget poll revealed a clear inclination towards change in tax slabs and increase in the exemption limit u/s 80C. However, none found way to the Finance Bill 2016.

Monday, February 29, 2016

Budget 2016-17 Key Tax Proposals

A quick look at 14 key tax proposals from Budget 2016, explained through infographics.

Watch this space for more insights

Sunday, February 28, 2016

Indian Economic Survey 2015-16 Highlights

Some key statistics from the Economic Survey 2015-16, presented as a part of the Budget session 2016. These include past year's performance and forecast for next period, explained through infographics.

Friday, February 26, 2016

Budget 2016 Poll Results: Startups and SMEs

Results for Pre-budget opinion poll for startups, micro, small, and medium enterprises conducted by Eurion Constellation.

View complete results below:

Budget 2016 Poll Results: Individual Taxation

Results of pre-budget opinion poll for individual tax payer conducted by Eurion Constellation, put together in infogarphics.
 View complete results below:

Tuesday, February 16, 2016

How is Oil Price Really Determined?

Throughout the history, oil prices have had a roller-coaster ride and the trends do not make sense all the time. The current downturn has once again brought into focus the complex dynamics behind this crucial commodity. This article covers the very starting point in this story – the determinants of oil price. The rate of crude oil is impacted by the demand-supply dynamics, but contrary to popular belief, it is primarily set by the derivatives market.

Thursday, February 11, 2016

What Budget 2016 Might Bring For Startups and SMEs

The Union Budget 2016 is expected to have a big focus on developing entrepreneurial ventures and supporting the existing micro, small and medium enterprises (MSMEs). The Government shares the industry’s view that this segment will drive the future economic growth in a big way and generate employment opportunities. Some of the key demands of the industry are around tax reforms, infrastructure and regulatory simplification.

Wednesday, February 10, 2016

Startup India Action Plan: Procurement Norms and Exit Provisions

Through its draft Startup India Action Plan, the Government has indicated its commitment towards a conducive ecosystem for startups. Continued from our previous post in this series, the new norms for eligible enterprises are as follows:

Tuesday, February 9, 2016

Individual Taxpayers' Expectations from Budget 2016

The Budget Session 2016 will commence from February 29th and individual taxpayers are waiting with high hopes. While Finance Minister Arun Jaitely has already made it clear that it is not going to be a populist budget, revisions are expected in the areas where changes are overdue.

Saturday, February 6, 2016

Startup India Action Plan: Intellectual Property Rights Support

Acknowledging the legal and infrastructural hurdles faced by startups, the Modi Government has announced some key initiatives through its flagship Startup India Action Plan. The proposed regulatory simplification for new ventures eligible under the Plan are:

Tuesday, February 2, 2016

What Is Keeping The Oil Prices Low?

While the last two years altogether have been a volatile period for oil prices globally, they have been in a free fall since the last quarter of 2015. Benchmark Brent closed at $33.10, while WTI closed at $32.30 on last Wednesday, January 27. The prices have fallen by about 70% from June 2014 peak prices. [May 2016 Update: July Brent is trading at $49.35, while June WTI is at $48.30. Read our update synopsis] Interestingly though, the supply side players do not appear to be relenting anytime sooner. In fact, analysts expect that the production is going to increase in near term, pushing the prices down even further. So, what is really going on with the oil industry?

Sunday, January 31, 2016

Free Personal Financial Budget

Eurion Constellation is happy to bring you free downloadable personal budget spreadsheets created in MS Excel.This simple but useful financial planning model can be used for weekly, monthly and yearly cashflows. You may choose to leave out weekly budgets by entering data in the monthly section on each tab. This will involve replacing the formulas with hard coded numbers. The yearly data in all cases will be calculated automatically.

Get your copy today!