Frequently asked Questions - Startup

1. What is a startup?
Answer:
A startup is a is an entrepreneurial venture which is newly emerged business venture (not
more than seven years old as on 20th September 2018 from the date of incorporation/
registration or up to ten years in case of Biotechnology sector)-
 registered as private limited company or registered as a partnership firm or a limited
liability partnership,
 having annual turnover not exceeding Rs. 25 crore for any of the financial years since
incorporation/registration, and
 working towards
a) innovation, development or improvement of products or processes or
services, or
b) if it is a scalable business model with a high potential of employment
generation or wealth creation.

2. What is founder?
Answer:
The entrepreneur who started a business. If multiple entrepreneurs were involved in the
creation of the company, they are referred to as the founders. The origin of the word is that a
founder originally meant a person who forges steel; similarly, the founder of a company is
forging the new entity.

3. What are the five stages of your business lifecycle?

Answer:
Stage 1: Seed and Development (Idea Stage)
This is the very beginning of the business lifecycle, before your startup is even
officially in existence. You’ve got your business idea and you are ready to take the
plunge. But first you must assess just how viable your startup is likely to be.
Stage 2: Startup
Once you have thoroughly canvassed and tested your business idea and are satisfied
that it is ready to go, it’s time to make it official and launch your startup. Many
believe this is the riskiest stage of the entire lifecycle. In fact, it is believed that
mistakes made at this stage impact the company years down the line, and are the
primary reason why 25% of startups do not reach their fifth birthday.
Stage 3: Growth and Establishment (Revenue Stage):
If you’re at this stage, your business should now be generating a consistent source of
income and regularly taking on new customers. Cash flow should start to improve as
recurring revenues help to cover ongoing expenses, and you should be looking
forward to seeing your profits improve slowly and steadily.
Stage 4: Expansion
At this stage you might feel there is almost a routine-like feel to running your
business. Staff is in place to handle the areas that you no longer have the time to
manage (nor should you be managing), and your business has now firmly established
its presence within the industry. Here you might start to think about capitalizing on
this certain level of stability by broadening your horizons with expanded offerings
and entry into new geographies.
 Stage 5: Maturity and Possible Exit
Having navigated the expansion stage of the business lifecycle successfully, your
company should now be seeing stable profits year-on-year. While some companies
continue to grow the top line at a decent pace, others struggle to enjoy those same
high growth rates.

4. What are the different categories in the Manipur Startup application?

Answer:
(a) General (b) Women, and (c) Student

5. What is 'Business to Business - B to B'?

Answer:
Business to business, also called B to B or B2B, is a form of transaction between businesses,
such as one involving a manufacturer and wholesaler, or a wholesaler and a retailer. Business
to business refers to business that is conducted between companies, rather than between a
company and individual consumers. Business to business stands in contrast to business to
consumer (B2C) and business to government (B2G) transactions.

6. What are the B2B Examples?

Answer:
Business-to-business transactions and large corporate accounts are commonplace for firms in
manufacturing. Samsung, for example, is one of Apple's largest suppliers in the production of
the iPhone. Reports in late 2017 estimated that Samsung could pull in as much as $22 billion
from the OLED displays it supplies for Apple's iPhones in 2018. Apple also holds B2B
relationships with firms like Intel, Panasonic and semiconductor producer Micron
Technology.

B2B transactions are also the backbone of the automobile industry. Many vehicle components
are manufactured independently, and auto manufacturers purchase these parts to assemble
automobiles. Tires, batteries, electronics, hoses and door locks, for example, are usually
manufactured by various companies and sold directly to automobile manufacturers.

Service providers also engage in B2B transactions. Companies specializing in property

management, housekeeping and industrial cleanup, for example, often sell these services
exclusively to other businesses, rather than individual consumers.

7. What is 'Business to Consumer - B2C'?

Answer:
Business to consumer (B2C) refers to the transactions conducted directly between a company
and consumers who are the end-users of its products or services. The business to consumer as
a business model differs significantly from the business-to-business model, which refers to
commerce between two or more businesses. While most companies that sell directly to
consumers can be referred to as B2C companies, the term became immensely popular during
the dotcom boom of the late 1990s, when it was used mainly to refer to online retailers, as
well as other companies that sold products and services to consumers through the internet.

8. What is 'Business to Government - B2G'?

Answer:
Business-to-government or B2G refers to business conducted between private sector firms
and governments.
 An example of a business-to-government service would be a small business' providing IT
consulting to a local government agency. The B2G category covers contracts of all sorts – for
goods, services and information – between businesses of all sizes and government at all levels
(state, local and central).

9. What is a 'Target Market'?

Answer:
A target market is the market a company wants to sell its products and services to, and it
includes a targeted set of customers for whom it directs its marketing efforts. Identifying the
target market is an essential step in the development of a marketing plan. A target market can
be separated from the market as a whole by geography, buying power, demographics and
psychographics.

10. What is an 'Investment'?

Answer:
An investment is an asset or item acquired with the goal of generating income or appreciation.
In an economic sense, an investment is the purchase of goods that are not consumed today but
are used in the future to create wealth.

11. How solving problems is connected with successful entrepreneurs?

Answer:
. “A startup is a company working to solve a problem where the solution is not obvious and
success is not guaranteed,” says Neil Blumenthal, cofounder and co-CEO of Warby Parker.

Becoming a successful entrepreneur isn’t about being able to raise huge sums of cash or
having the knowledge and skill to expertly apply the latest marketing strategies. It’s about one
thing: solving problems. True entrepreneurs know that the best companies are those that are
founded to meet a demonstrated need amongst their markets.

12. What is 'Turnover'?

Answer:
Turnover is an accounting term that calculates how quickly a business collects cash from
accounts receivable or how fast the company sells its inventory.
Two of the largest assets owned by a business are accounts receivable and inventory. Both of
these accounts require a large cash investment, and it is important to measure how quickly a
business collects cash. Turnover ratios calculate how quickly a business collects cash from its
accounts receivable and inventory investments.

13. What is Net Profit?

Answer:
Often referred to as the bottom line, net profit is calculated by subtracting a company's total
expenses from total revenue, thus showing what the company has earned (or lost) in a given
period of time (usually one year). Also called net income or net earnings.

14. What is an 'Asset'?

Answer:
An asset is a resource with economic value that an individual, corporation or country owns or
controls with the expectation that it will provide a future benefit. Assets are reported on a
company's balance sheet and are bought or created to increase a firm's value or benefit the
firm's operations. An asset can be thought of as something that, in the future, can generate
 cash flow, reduce expenses or improve sales, regardless of whether it's manufacturing
equipment or a patent.

15. What is 'Debt'?

Answer:
Debt is an amount of money borrowed by one party from another. Debt is used by many
corporations and individuals as a method of making large purchases that they could not afford
under normal circumstances. A debt arrangement gives the borrowing party permission to
borrow money under the condition that it is to be paid back at a later date, usually with
interest.

16. What is 'Return on Equity (ROE)'

Answer:
Return on equity (ROE) is the amount of net income returned as a percentage of shareholders'
equity. Return on equity (also known as "return on net worth" [RONW]) measures a
company's profitability by revealing how much profit a company generates with the money
shareholders have invested.

ROE is expressed as a percentage and calculated as:

Return on Equity = Net Income/Shareholder's Equity

ROE is useful in comparing the profitability of a company to that of other firms in the same
industry. It illustrates how effective the company is at turning the cash put into the business
into greater gains and growth for the company and investors. The higher the return on equity,
the more efficient the company's operations are making use of those funds.

17. What does Commercial Off-The-Shelf (COTS) mean?

Answer:
A COTS product is usually a computer hardware or software product tailored for specific uses
and made available to the general public. Such products are designed to be readily available
and user friendly. A typical example of a COTS product is Microsoft Office or antivirus
software. A COTS product is generally any product available off-the-shelf and not requiring
custom development before installation.

18. What does Modified Off-The-Shelf (MOTS) mean?

Answer:
Modified off-the- Shelf (MOTS) is a type of software solution that can be modified and
customized after being purchased from the software vendor. MOTS is a software delivery
concept that enables source code or programmatic customization of a standard prepackaged,
market-available software.
MOTS is designed to be used for organizations that prefer predeveloped software, which can
be slightly or substantially customized to meet business objectives. MOTS-based software
solutions provide partial or complete access to the source code of the underlying software.
The software buyer can review the code and product literature to modify the appearance,
functionality and/or the business logic of the software.

19. What is GOTS?

Answer:
A GOTS (government off-the-shelf) product is typically developed by the technical staff of
the government agency for which it is created. It is sometimes developed by an external
 entity, but with funding and specification from the agency. Because agencies can directly
control all aspects of GOTS products, these are generally preferred for government purposes.

20. What does Proof of Concept (POC) mean?

Answer:
A proof of concept (POC) is a demonstration, the purpose of which is to verify that certain
concepts or theories have the potential for real-world application. POC is therefore a
prototype that is designed to determine feasibility, but does not represent deliverables.

Proof of concept is a term with various interpretations in different areas. POC in software
development describes distinct processes with different objectives and participant roles. POC
may also refer to partial solutions involving a small number of users acting in business roles
to establish whether a system satisfies certain requirements. The overall objective of POC is
to find solutions to technical problems, such as how systems can be integrated or throughput
can be achieved through a given configuration.

In the business world, POC is how startups demonstrate that a product is financially viable.
POC involves extensive research and review, and is submitted as a single package to
concerned parties. It includes examination of the revenue model, in which companies show
projected revenue from products and services, and indicate development cost, long-term
finance projections and how much the service costs to maintain and market. It is an excellent
way for a business to evaluate itself internally and at proposed acquisitions and projects.

21. What is business ‘pitch’?

Answer:
A pitch is a presentation of a business idea to potential investors. People pitch a business
because they need resources. If the goal is to raise startup cash, the target of the pitch is an
investor. Other businesses pitch to potential customers to sell their product. Finally, some
organizations pitch because they need a partner or resource to help them accomplish their
mission.

It's important to remember that a pitch to an investor may not strictly seek startup capital. For
example, a business may need an investment when it has an unexpected but very profitable
order beyond its current capacity. Such a pitch is easier to make because investors feel far
more secure with the purchase order in hand.

22. What are Elevator & Live Plan Pitches?

Answer:
The most important pitch to bring to your first meeting with a potential customer is the
elevator pitch. The idea of an elevator pitch is that it's short, just like an elevator ride. If
executed well, this short pitch will spark the curiosity of the client and encourage them to ask
more questions. Because of its brevity, an elevator pitch works great when seeking investors.

Another type of pitch is the live plan pitch, which relies more on visual aids than on speaking.
The general idea of this pitch is to hand all of the customer's representatives a neatly
formatted single page containing relevant information such as a market summary, financial
information, or related legislation. This type of pitch is particularly effective when meeting
with individuals and organizations who value empirical data, such as accounting firms,
financial planners, and banks. With a bit of customization, this type of pitch can be delivered
to a variety of investors or customers.