<p class="title">India's startups will flourish if the regulatory environment becomes more friendly as all other things - funding, talent and ability to connect to the global market - are in place, says a senior IT industry figure.</p>.<p class="bodytext">V Balakrishnan, the former chief financial officer of Infosys Ltd, told PTI that investors are now focusing on B2B start-ups than B2C.</p>.<p class="bodytext">According to him, a lot of churning has happened in the start-up field in the last two years but there is a lot of stability now, and funding has become much more focused with not all companies attracting money.</p>.<p class="bodytext">B2C start-ups had funding challenges which have reduced of late with large players among them having raised money.</p>.<p class="bodytext">"But the B2B market is the focus now; most of the funds are focusing on B2B because the capital requirement is low and I think the exit is also happening in B2B. I think a lot more focus in the VC circles is on B2B companies now than B2C," he said.</p>.<p class="bodytext">The biggest problem faced by startups is on regulatory and compliance front, Balakrishnan said, citing the Income Tax department's notices to startups vis-a-vis the angel tax.</p>.<p class="bodytext">"I think some of the regulatory changes have to be much more friendly for startup companies and compliance regulation should ease because you can't expect a startup started by an entrepreneur who is 25-30 years (old) to comply with some 30 to 40 laws," he said.</p>.<p class="bodytext">He said regulations and compliance have to be made simple and much friendlier for startups.</p>.<p class="bodytext">"The recent notice issued by Income Tax department to all startup companies on funding is not helping because you can't expect a startup company which raised money to pay tax on the capital," Balakrishnan said.</p>.<p class="bodytext">Regulation is a key challenge and there needs to be much more clarity. If that comes, the environment (for startups) will change for the better, he said.</p>.<p class="bodytext">"Startups should have a different environment for regulatory compliance; you can't expect a startup company to adhere to all matured company regulations," Balakrishnan said.</p>.<p class="bodytext">"I think if the regulatory environment becomes much easier, startups will flourish as all other things are there...funding is there, talent is coming in, I think they are also able to connect to the global market," he said.</p>
<p class="title">India's startups will flourish if the regulatory environment becomes more friendly as all other things - funding, talent and ability to connect to the global market - are in place, says a senior IT industry figure.</p>.<p class="bodytext">V Balakrishnan, the former chief financial officer of Infosys Ltd, told PTI that investors are now focusing on B2B start-ups than B2C.</p>.<p class="bodytext">According to him, a lot of churning has happened in the start-up field in the last two years but there is a lot of stability now, and funding has become much more focused with not all companies attracting money.</p>.<p class="bodytext">B2C start-ups had funding challenges which have reduced of late with large players among them having raised money.</p>.<p class="bodytext">"But the B2B market is the focus now; most of the funds are focusing on B2B because the capital requirement is low and I think the exit is also happening in B2B. I think a lot more focus in the VC circles is on B2B companies now than B2C," he said.</p>.<p class="bodytext">The biggest problem faced by startups is on regulatory and compliance front, Balakrishnan said, citing the Income Tax department's notices to startups vis-a-vis the angel tax.</p>.<p class="bodytext">"I think some of the regulatory changes have to be much more friendly for startup companies and compliance regulation should ease because you can't expect a startup started by an entrepreneur who is 25-30 years (old) to comply with some 30 to 40 laws," he said.</p>.<p class="bodytext">He said regulations and compliance have to be made simple and much friendlier for startups.</p>.<p class="bodytext">"The recent notice issued by Income Tax department to all startup companies on funding is not helping because you can't expect a startup company which raised money to pay tax on the capital," Balakrishnan said.</p>.<p class="bodytext">Regulation is a key challenge and there needs to be much more clarity. If that comes, the environment (for startups) will change for the better, he said.</p>.<p class="bodytext">"Startups should have a different environment for regulatory compliance; you can't expect a startup company to adhere to all matured company regulations," Balakrishnan said.</p>.<p class="bodytext">"I think if the regulatory environment becomes much easier, startups will flourish as all other things are there...funding is there, talent is coming in, I think they are also able to connect to the global market," he said.</p>