“A STUDY ON FINANCIAL PROBLEMS FACED BY START-

UPS”

An internship report submitted in partial fulfilment of requirements for

Master of Business Administration in Finance
2023-2025

Under the guidance of:

College Mentor: Industry Mentor:

Dr. Ankur Mittal Mrs. Mona Choudhary

Professor Finance Manager
UPES, Dehradun DealSquared Pvt. Limited.

Submitted by
Shubham
SAP ID: 500117751
Enrolment Number: R151223004
MBA FINANCE (2023-2025)
School of Business, UPES

Shubham - MBA Finance, UPES 1

 I. STUDENT DECLARATION

I hereby declare that this submission is my own work and that, to the best of my knowledge
and belief, it contains no material previously published or written by another person nor
material which has been accepted for the award of any other degree or diploma of the
university or other institute of higher learning, except where due acknowledgment has been
made in the text.

Shubham
SAP ID: 500117751
Enrolment Number: R151223004
MBA FINANCE
2nd Year Student
School of Business, UPES

Shubham - MBA Finance, UPES 2

 II. ACKNOWLEDGEMENT

I would like to express my sincere thanks to all the members of DealSquared Pvt. Ltd. for
providing their unconditional help and support during my time in the internship as well as for
this report. I would like to express my special gratitude to Mrs. Mona Kumari for giving me
this opportunity to work as a finance intern at DealSquared Pvt. Ltd.

I would also like to thank all the other members of the company who helped and guided me
with all my queries while I was getting familiarized with the company’s atmosphere. This
was a very enriching experience, and I learnt a lot of things through my practical work during
this internship. Finally, I would also like to thank my internal mentor Mr. Ankur Mittal for
guiding me throughout my internship at DealSquared Pvt. Ltd.

Shubham - MBA Finance, UPES 3

 III. INDUSTRY MENTOR CERTIFICATE

IV. FACULTY MENTOR CERTIFICATE

This is to certify that the summer internship report entitled “a study on financial problems faced
by Start-ups” submitted by Shubham to UPES for partial fulfilment of requirements for Master
of Business Administration in Finance is a bona fide record of the internship work carried out
by her under my supervision and guidance. The content of the report, in full or parts has not
been submitted to any other Institute or University for the award of any other degree or
diploma.

Mr. Ankur Mittal

Professor

Shubham – MBA Finance, UPES 5

 School of Business, UPES

Shubham – MBA Finance, UPES 6

 VI. EXECUTIVE SUMMARY

India is a country of many great legends who were famous all over the world because of their
work, sharp mind & high skill. Youths in India are exceptionally talented, highly skilled & full
of innovative ideas. However, they do not get the opportunity due to a lack of solid support &
proper guidance in the right direction. In this way, the BJP government launched the “START-
UP INDIA STAND UP INDIA” scheme on 16 January 2016 to help the youth of India go in the
right direction using their new & innovative ideas. This scheme was launched to motivate &
promote newcomers towards business & grow their career as well as economy of the country.
This program is a big start to enable startups through financial support so that they can use their
innovative ideas in the right direction. There are tremendous opportunities for Start-up
entrepreneurs in India. The key areas are Textile, Media, Health Sector, Event Planning,
Tourism, Automobile, etc. So, there are various opportunities where entrepreneurs can start
their Start-ups. But along with opportunities, there are some challenges also that Startup
entrepreneurs may have to face like Infrastructure Deficit in India, Risk Factors, and Right
Talent Acquisition, etc. Despite these challenges, the Government as well as Startup
entrepreneurs should have to work together to face these challenges & make this program
effective. The study will focus on the Start-up India scheme, opportunities available under this
scheme as well as challenges that may have to be faced & suggestions to overcome the
challenges to make the Start-up India program successful.

Skill India Program, Start-up India, and Stand-Up India program are the buzzwords of today in
the manufacturing, Production, and Services sectors. As present government has taken the oath
to inculcate skills in every youth and help them start-ups establish their enterprise and become
owners of their own rather than doing jobs with some other and intern help in employment and
GDP development. It is also observed that SC/ST/Women categories have been marginalized in
this area since inception and it was the dream of Dr. B. R.

Ambedkar that equal opportunities to be given to them also to grow and showcase their talents,
ideas, and ability to prove themselves as successful entrepreneur, a person and citizen of India.
The present study is to understand the progress of this program and its success. The results of
the study state that nearly 70% of the units expressed growth and expressed that if financial
support had not been availed through this platform, it would be a dream to start up their
industries, and women entrepreneurs also feel that they are more empowered and able to
establish their identity.

Shubham – MBA Finance, UPES 7

 CHAPTER 1
1.1 INTRODUCTION

Deal Squared is a premier accommodation service dedicated to revolutionizing luxury stays

while maintaining affordability. Deal Squared understands that travel encompasses more than
simply arriving at a destination, which is why we are committed to providing comfortable,
convenient, and cost-effective accommodation choices throughout different regions of India.
Deal Squared goal is to simplify the process of finding the ideal place to stay and establish
ourselves as your dependable and esteemed choice for all your accommodation requirements.
whether it's budget-friendly accommodations or opulent retreats, we offer a comprehensive
range to cater to your every need. Whether customers are looking for Budget-Friendly
options or more luxurious retreats, Deal Squared provides a comprehensive range of choices,
ensuring all accommodations needs are met.

 Pricing Strategy
DealSquared has designed a pricing strategy that emphasizes *value and flexibility* for its
customers, carefully balancing *comfort, convenience, and cost*. Key aspects of their pricing
approach include:

 Early check-in and late check-out options, giving customers flexibility in their schedules.

 The Best Price Guarantee is tailored especially for business travelers or those with
unpredictable travel plans.

 Promotions like "Stay Longer, Save More", offering better rates for extended stays.

The pricing tiers are:

 Budget Stays: Starting from as low as INR 1,000.

 Mid-Range Stays: Between INR 3,000 to INR 5,000.

 Luxury Stays: Approximately INR 10,000 per night.

 Location
The company operates across various locations in India, though specific regions are not
elaborated on in the slide. However, they appear to partner with renowned hotels and resorts
like Radisson Blu and Hridayesh Resort, suggesting their presence in major cities and tourist
destinations.

Some hotel examples under their service include:

 Radisson Blu Kaushambi

 Fortune Inn Grazia Ghaziabad

 Maha gun Sarovar Portico Suites

8
 Hridayesh Resort & Spa, Jim Corbett

 PRODUCTS AND SERVICES:

 Services B2B
For businesses, DealSquared provides corporate services that focus on high-end hotel
accommodations at discounted corporate rates. The main features include:

 Discounted rates for companies’ employees and customers.

 Collaboration with businesses to offer comfortable and practical accommodations.

 Venues for *meetings, conferences, and corporate events*.

 Customized packages that cater to the specific needs of corporate clients.

 Long-term stay options for business travellers on extended assignments, designed to make
the stay both enjoyable and productive.

 Services B2C
Deal Squared caters to individual customers by offering a variety of housing options to match
different preferences and budgets. Their B2C services include:

 A diverse range of affordable to luxury accommodations.

 Access to books at unbeatable online prices that are better than offline markets. -
Availability of newspapers in different languages* at reasonable rates.

 A smooth and hassle-free customer experience from booking to post-stay through their
customer care services.

This overview highlights Deal Squared’s dedication to providing affordable yet luxurious
accommodation services, tailored to both individual and corporate clients. They stand out by
offering value-added services like flexible pricing, business packages, and personalized
experiences for longer stays.

9
 1.2GROWTH AND FUTURE:

 Current Market Position and Strengths

DealSquared is positioned as a premier accommodation service, focusing on providing
luxury stays while maintaining affordability. It operates across various regions of India,
catering to both budget-conscious travelers and those seeking opulent retreats. DealSquared
has successfully integrated a pricing strategy that offers flexibility, such as early check-ins
and late check-outs, ensuring customer satisfaction. Its partnerships with corporate clients
for B2B services, along with discounted rates, provide it a solid foothold in the corporate
sector.

 Growth Strategies
 Expansion of B2B Services

DealSquared’s corporate partnerships offer a significant opportunity for growth. By

expanding these partnerships to more companies and industries, it can secure more long-term
contracts and increase its recurring revenue. Deal Squared can focus on developing
customized packages for different corporate sectors, such as IT, healthcare, and education,
providing tailored accommodation solutions for their employees and business trips.

 Diversification of B2C Offerings

DealSquared already provides a range of accommodation options for consumers, but by

further diversifying its portfolio (e.g., eco-friendly stays, and adventure accommodations), it
can capture niche markets. Additionally, including new features like local guides, curated
travel experiences, and partnerships with travel influencers can elevate its brand in the B2C
market.

 Geographical Expansion

While DealSquared operates throughout various regions of India, expansion into underserved
or emerging travel markets within the country, such as the Northeast or tier-2 cities, could
increase its market share. DealSquared could also consider expanding internationally,
beginning with popular tourist destinations in South Asia.

 Digital Transformation
 Improving Online Presence and Customer Engagement

Strengthening its website and online booking platform will be key to capturing a wider
audience. Investing in a seamless, mobile-friendly booking experience, coupled with
personalized suggestions based on customer preferences, can improve retention and
conversion rates.

10
 AI and Data-Driven Personalization

By leveraging AI and machine learning algorithms, DealSquared can offer personalized

recommendations based on user behavior and past bookings. This would enhance the
customer experience, leading to greater satisfaction and loyalty.

 Future Trends and Opportunities

 Sustainable Tourism

As sustainability becomes a critical factor for travelers, DealSquared can lead in offering eco-
friendly accommodations. Collaborating with eco-resorts or implementing green practices in
existing properties can boost brand loyalty, particularly among younger travelers.

 Work-From-Anywhere Movement

The growing trend of remote work presents an opportunity for extended stay offerings.
DealSquared could cater to the digital nomad market by providing packages for long-term
stays with work-friendly amenities, such as high-speed internet and office spaces.

 Technology Integration

DealSquared could further integrate cutting-edge technologies such as virtual tours, digital
check-ins, and AI-powered chatbots for customer service. This would not only enhance the
customer experience but also streamline operations.

 Strategic Partnerships and Collaborations

 Hospitality Collaborations

Forming partnerships with local and international hospitality chains or homestay providers
can expand DealSquared’s portfolio, offering more options to its customers without the need
for property ownership.

 Event Management Expansion

With its foothold in providing venues for meetings and conferences, DealSquared can grow
into full-fledged event management services, offering complete event planning solutions for
both corporate and private events.

1.2: A STUDY ON FINANCIAL PROBLEMS FACED BY START-

UPS”

A start-up company or start-up or start-up is a young company that is just beginning to

develop. Start-ups are generally small and initially financed and operated by a handful of
founders or one individual. These companies offer a product or service that is not currently
being offered elsewhere in the market, or that the founders believe is being offered in an
inferior manner. In the early stages, start-up companies' expenses tend to exceed their
revenues as they work on developing, testing, and marketing their idea. As such, they often

11
require financing. Start-ups may be funded by traditional small business loans from banks or
credit unions, by government-sponsored Small Business Administration loans from local
banks, or by grants from non-profit organizations and state governments.
Paul Graham says "A start-up is a company designed to grow fast. Being newly founded does
not in itself make a company a start-up. Nor is it necessary for a start-up to work on
technology, or take venture funding, or have some sort of "exit". The only essential thing is
growth. Everything else we associate with start-ups follows from growth."

 Start-up India:

Startup India is an initiative of the Government of India.

The campaign was first announced by Indian Prime Minister, Narendra Modi during his 15
August 2015 address from the Red Fort, in New Delhi. The action plan of this initiative, is
based on the following three pillars:

 Simplification and Handholding.

 Funding Support and Incentives.
 Industry-Academia Partnership and Incubation.

An additional area of focused relating to this initiative, is to discard restrictive States

Government policies within this domain, such as License Raj, Land Permissions, Foreign
Investment Proposals, and Environmental Clearances. It was organized by The Department
for promotion of industry and internal trade (DPI&IT). A startup defined as an entity that is
headquartered in India, which was opened less than seven years ago, and has an annual
turnover less than ₹25 crore (US$3.5 million). Under this initiative, the government has
already launched the I-MADE program, to help Indian entrepreneurs build 1 million mobile
app start-ups, and the MUDRA Banks scheme (Pradhan Mantri Mudra Yojana), an initiative
which aims to provide micro-finance, low-interest rate loans to entrepreneurs from low
socioeconomic backgrounds. Initial capital of ₹200 billion (US$2.8 billion) has been
allocated for this scheme.

 2018 Start-up State Ranking are as follows:

 Best performer: Gujarat

 Top performers: Karnataka, Kerala, Odisha, and Rajasthan

 Leader: Andhra Pradesh, Bihar, Chhattisgarh, Madhya Pradesh, and

Telangana

 Aspiring leaders: Haryana, Himachal Pradesh, Jharkhand, Uttar Pradesh,

and West Bengal
 Emerging states: Assam, Delhi, Goa, Jammu & Kashmir, Maharashtra,
Punjab, Tamil Nadu, and Uttarakhand
 Beginners: Chandigarh, Manipur, Mizoram, Nagaland, Puducherry, Sikkim,
and Tripura
Kerala has initiated a government start-up policy called "Kerala IT Mission" which focuses
on fetching ₹50 billion (US$700 million) in investments for the state's start-up ecosystem. It

12
also founded India's first telecom incubator Start-up village in 2012. The state also matches
the funding raised by its incubator from the Central government with 1:1. Telangana has
launched the largest incubation centre in India as "THub". Andhra Pradesh has allocated a
17,000-sq.ft. Technological Research and Innovation Park as a Research and Development
laboratory. It has also created a fund called "Initial Innovation Fund" of ₹100 crore (US$14
million) for entrepreneurs.

The government of Madhya Pradesh has collaborated with the Small Industries Development
Bank of India (SIDBI) to create a fund of ₹200 crore (US$28 million). Rajasthan has also
launched a "Start-up Oasis" scheme. To promote start-ups in Odisha, the state government
organized a two-day Start-up Conclave in Bhubaneswar on November 28, 2016. Kerala has
initiated a government start-up policy called "Kerala IT Mission" which focuses on fetching
₹50 billion (US$700 million) in investments for the state's start-up ecosystem. It also
founded India's first telecom incubator Start-up village in 2012. The state also matches the
funding raised by its incubator from the Central government with 1:1. Telangana has
launched the largest incubation centre in India as "T-Hub". Andhra Pradesh has allocated a
17,000sq.ft.

Technological Research and Innovation Park as a Research and Development laboratory. It

has also created a fund called "Initial Innovation Fund" of ₹100 crore (US$14 million) for
entrepreneurs. The government of Madhya P r a d e s h has collaborated with the Small
Industries Development Bank of India (SIDBI) to create a fund of ₹200 crore (US$28
million). Rajasthan has also launched a "Start-up Oasis" scheme. To promote start-ups in
Odisha, the state government organized a two-day Start-up Conclave in Bhubaneswar on
November 28, 2016.

1.3 Here are the 19 plans Modi has for start-ups:

 Self-certification: The start-ups will adopt self-certification to reduce regulatory

liabilities. The self-certification will apply to laws including payment of gratuity,
labour contract, provident fund management, and water, and air pollution acts.

 Start-up India hub: An all-India hub will be created as a single contact point for
start-up foundations in India, which will help the entrepreneurs exchange knowledge
and access financial aid.

 Register through the app: An online portal, in the shape of a mobile application,
will be launched to help start-up founders easily register. The app is scheduled to be
launched on April 1.

 Patent protection: A fast-track system for patent examination at lower costs is being
conceptualized by the central government. The system will promote awareness and
adoption of the Intellectual Property Rights (IPRs) by the startup foundations.

 Rs 10,000 crore fund: The government will develop a fund with an initial corpus of
Rs 2,500 crore and a total corpus of Rs 10,000 crore over four years, to support
upcoming start-up enterprises. The Life Insurance Corporation of India will play a
major role in developing this corpus. A committee of private professionals selected
from the start-up industry will manage the fund.

13
 National Credit Guarantee Trust Company: A National Credit Guarantee Trust
Company (NCGTC) is being conceptualized with a budget of Rs 500 crore per year
for the next four years to support the flow of funds to start-ups.

 No Capital Gains Tax: At present, investments by venture capital funds are exempt
from the Capital Gains Tax. The same policy is being implemented on primary-level
investments in start-ups.

 No Income Tax for three years: Start-ups would not pay Income Tax for three years.
This policy would revolutionize the pace with which start-ups would grow in the
future.

 Tax exemption for investments of higher value: In case of an investment of higher

value than the market price, it will be exempt from paying tax.
 Building entrepreneurs: Innovation-related study plans for students in over 5 lakh
schools. Besides, there will also be an annual incubator grand challenge to develop
world-class incubators.

 Atal Innovation Mission: The Atal Innovation Mission will be launched to boost
innovation and encourage talented youths.

 Setting up incubators: A private-public partnership model is being considered for 35

new incubators and 31 innovation centres at national institutes.

 Research parks: The government plans to set up seven new research parks, including
six in the Indian Institute of Technology campuses and one in the Indian Institute of
Science campus, with an investment of Rs 100 crore each.

 Entrepreneurship in biotechnology: The government will further establish five new

biotech clusters, 50 new bio incubators, 150 technology transfer offices, and 20 bio-
connect offices in the country.

 Dedicated program in schools: The government will introduce innovation-related

programs for students in over 5 lakh schools.

 Legal support: A panel of facilitators will provide legal support and assistance in
submitting patent applications and other official documents.

 Rebate: A rebate amount of 80 percent of the total value will be provided to the
entrepreneurs on filing patent applications.

 Easy rules: Norms of public procurement and rules of trading have been simplified
for the start-ups.

 Faster exit: If a start-up fails, the government will also assist the entrepreneurs in
finding suitable solutions for their problems. If they fail again, the government will
provide an easy way out.

14
 1.4 Reasons behind limited start-ups in India:
The failing start-up problem in India has become a big issue in the start-up
ecosystem. As per statistics, the majority of entrepreneurs fail while trying
to establish their businesses. After studying failed start-ups in India, I have
compiled a list of several major reasons behind their failure. From the lack
of talent to changing market dynamics, these top reasons can become a
nightmare for any entrepreneur who wants to start a new venture in the ever-
changing Indian market.
 Not Understanding the Needs of the Society: Most successful business ideas
arise from the needs of society. Since high school, teenagers become a part of
the competition to get the best college and eventually, the best job. Due to
competition, most people spend countless hours in studies and disconnect
themselves from society. The divide between the tech-driven lifestyle of
millennials and the lack of understanding of society’s demands contribute to
failing business models. Educational pressure is one of the many reasons that
experts believe to be the source of the lack of understanding between people and
society.

 Lack of fresh and Innovative Ideas: Almost every niche market in India is
suffocated with multiple startups trying to provide solutions to the same
problem. This calls for entrepreneurs to be inventive and push the boundaries
using innovation to stand out. Due to competition, the urge to grab market share
makes an entrepreneur vulnerable to mistakes by producing the wrong product.
 Lack of People with Hands-on Experience: The startup ecosystem in India has
a dearth of talent due to issues like brain drain. Due to the competition among
startups, the idea of training a new employee goes right out of the window as
time is a critical factor. Nobody wants to spend resources training the new crop
when you can get experienced personnel. This has created a void of experienced
professionals, who can contribute from the first day itself. By hiring amateurs,
which most Indian startups do, they fail to provide a better product, which
eventually leads to a startup’s demise.

 Limited Access to Funding: Entrepreneurs have to fight hard to get funding for
their startups nowadays. To get started, they use their savings or take money
from friends and family. Very few are lucky to get angel funding. Moreover,
venture capitalists tend to finance only those business ideas that can provide a
good return on investment. This results in the majority of young entrepreneurs
missing VC funding. As a result, most Indian entrepreneurs are not able to
continue their ventures due to lack of funding.

 Lack of Understanding between Technical and Management Teams: There

is a big difference between a technical graduate and a management graduate. For
a startup to succeed, a complete understanding is needed between the two. The
lack of technical know-how among management graduates and the lack of

15
 managerial knowledge among technical graduates is one of the common reasons
behind the failure of startups in India.

 Offering extremely High Salaries: Startups in India face a serious shortage of

talent pool. To bring experienced professionals on board, they offer high salaries
to keep the startup in safe hands. However, offering high salaries to employees
makes the startup eat into its resources. The shortage of funds leads to instability
within the startup, which leads to bad decisions.

 Lack of Interpersonal and Soft Skills: Most entrepreneurs in India are found to
lack interpersonal and soft skills. Due to poor communication skills, an
entrepreneur increases the failure rate of his/her startup. The lack of such
essential skills makes a startup unable to compete in the international market.
Also, entrepreneurs face a lot of difficulty in pitching their business ideas to a
venture capitalist with poor communication.

 Not Able to Address the Issue of Scalability: Over one-third of the Indian
population is on the Internet. Startups that have successfully built a product
based on the needs of society and are running profitably, will face the issue of
scalability. In such cases, lack of awareness or no mentorship becomes the
deciding factor behind a startup’s failure. Due to inexperience, entrepreneurs fail
to understand the changing needs of their product’s growing consumer base.

 Unaware of Changing Market Dynamics: Market dynamics keep

changing with new trends becoming outdated in no time. Before a startup
knows what hit them, it is often too late to react and change the strategy.
Such scenarios arise when a startup’s core team is unable to make timely
decisions due to a lack of industry insight, not conducting thorough research
about the niche market, targeting a wide market segment, and more.
 Every founder cannot be the CEO: There can be only one CEO, even if
there are many founders. Only one person sets the vision, and the others
execute after there is broad agreement over what needs to be done. Too
many people trying to display the big picture is a waste of time and shows
role ambiguity. “Too many cooks spoil the broth” comes in when everybody
is the boss. Direction comes from a single person and that position must be
stable, secure, and given space to experiment, with a reasonable error
margin.

 Meritocracy: This should be ruthlessly executed from the top down. The agenda
is to build a business and not protect anyone. Right people doing the right task is
the only way to build a business. With a well-laid appraisal mechanism, talent
must be timely rewarded and given a greater platform so that they feel as much a
part of the venture as the founders. It takes 8-10 years to build a good/great
business, and without a performing team that sticks around, it is simply not
possible.

16
 CHAPTER 3: LITERATURE REVIEW

3.1 The Imperfect Education System and Conservative Lifestyle:

The education system is one of the hindrances for start-ups. In college, students are usually
trained with advanced techniques, but lack of marketing, sales, and operational ability and
leadership skills needed to advance their enterprises. In addition, a conservative lifestyle also
contributes as one of the obstacles. As the culture of the family remains, the family remains
sceptical to change and prefers options that can provide a steady income rather than engaging
in risk. This places pressure on the budding entrepreneur who falls victim to the dichotomy of
providing for the family instead of following some “whimsical” dream (Au & Kwan, 2009).

3.2 Lack of Support Networks and Entrepreneurship Ecosystem:

One of the major challenges is that there is severe shortage of start-up support networks and
entrepreneurship ecosystems. In many western countries, there are special institutions serve
as incubators, start-up accelerators, start-up competitions for entrepreneurs to put their ideas
to test and obtain necessary guidance. In India, incubators, start-up accelerators, and start-up
competitions are slowly making their way into the first-tier cities, but there truly are not
enough to go around. As a result of this shortage, many start-ups fail at the “idea” stage of
their business. The ecosystem usually does not directly provide funding to start-ups; they just
serve as platforms that link investors and entrepreneurs so that entrepreneurs can obtain
necessary funding to test out their ideas. The lack of these facilities makes it more difficult
for entrepreneurs to find investors. In return, investors are more difficult to find entrepreneurs
as well. Even if entrepreneurs can find investors, they will face an entirely different set of
challenges. Indian culture inherently does not promote entrepreneurship. Conversely, it
encourages stability, employment at large state-owned or private organizations and, above all,

17
teaches people to be risk averse. Even if young Indian individuals have intention to start their
own business, their family usually places a considerable amount of negative pressure on them
to forget entrepreneurship and look for a “stable job” instead.

3.2 India lacks enough angel investors to fund start-ups:

Unlike the West, India does not have an adequate number of angel investors who can fuel the
growth of the country’s thriving start-up ecosystem, industry body NASSCOM has said. “For
a successful start-up ecosystem there is a need for enough angel investors who can support
budding entrepreneurs from an early stage. But this is not happening in India and there is a
serious lack of it,”
NASSCOM Vice-President Rajat Tandon told PTI. “High net-worth individuals and
corporate executives, among others, should come forward and participate in this growth
story,” he said. A recent report by NASSCOM had said India ranks third among global start-
up ecosystems, with more than 4,200 new-age companies. Tandon said, “The case is quite
different in countries like the US. People are just waiting to invest in good companies. We
should also have something like that.” “Mainly, investors (in India) are afraid because there is
a high risk of failure in these investments and also there is a lack of policy on such
investments,” he added. “Why will investors put money in such companies? They need tax
benefits and several other things to put in their money. We have already written about these
things to the Government, and
I am sure we can expect something by the year-end,” he said. In his Independence Day
speech, Prime Minister Narendra Modi had announced a new campaign „Start-up India;
Stand up India‟ to promote bank financing for start-ups and offer incentives to boost
entrepreneurship and job creation in the country. “At NASSCOM, we are not only
encouraging investors but also asking people to mentor start-ups. Like someone who has a
design business, they can help start-ups develop UIs and guide them in the process. In return
they take some equity,” he said. “And there are people like Ratan Tata and Azim Premji, who
are making a slew of investments and helping these young entrepreneurs. They are the
inspiration,” he said. Ratan Tata has invested in several companies including Ola, Snapdeal,
Paytm, Urban Ladder, and Bluestone. Wipro boss Azim Premji has funded companies such as
Myntra and Amagi, among others, through his investment arm Premji Invest.

 M.Jegadeeshwaran, S.Kaleeshwari (2021) This paper certainly deals with startup

India action plans and other schemes like MUDRA, ATAL INNOVATION
MISSION, etc., and their role in supporting startups. The researcher highlighted the
challenges of startups. As per DPIIT (department of Promotion of Industry and
Internal Trade) in India Maharashtra state has the highest number of startups and 3783
and Karnataka ranks second with 2938 DPIIT-recognized startups.

 Dr. Sujata Chincholkar (2021) In her paper titled 'Bottleneck to Success: scaling up
Issues of Startups' studied many start-ups that encounter major setbacks at the scaling-
up stage. Her qualitative study examines the problems encountered by start-up
companies while scaling up the business. The results show that the non-availability of
financial resources, acquisition of the right talent, and acceptance of the product are
some of the major challenges faced by startups while scaling up by developing a
model.

 Mohan Kumar (2021) has done a research paper on 'Startups, Barriers and its
Opportunities in India' His study reveals that there are a lot of barriers for the startups

18
 that need to be worked on such as towards. Like, a lack of technical education, and no
transparency of government funding schemes. The government will have to open such
private intermediary centres that will work under the supervision of the government,
and they will be rated according to their work. These private intermediary centers will
help all those startups who want to take advantage of the government scheme but do
not know how. Therefore, the government should need to lot of taking care of startups
so that startups can run at full speed and contribute to the Indian economy.

 Dr. Walter D’Souza (2021) published a research article on the topic of startups titled
'Indian startups – issues, challenges and opportunities.' The paper discussed a few
issues and challenges that an Indian startup must face and the opportunities that the
country can provide in the current ecosystem.

 Arana Kausar & Md. Aziz Ahmed (2020) in their paper titled ‘a study on Financial
Literacy Creating Sustainable Startups in the Indian Context’ discussed case studies
of the failure of startups in India due to financial illiteracy, financial insufficiencies,
no market requirements of products or services and concluded that there is a big need
for financial literacy among the entrepreneurs. Poor financial literacy will drive
inventors away and will put entrepreneurs at risk of failing. Each investment must be
evaluated for its returns, for this knowledge of financial management is indispensable.
We need sustainable startups for better products and job creation for economic
growth.

 Srinivas Subbarao Pasumarti & Anubhab Patnaik (2020) in their research paper
analysed the different problems faced by entrepreneurs. Major startup entrepreneurs
encounter obstacles in finding and allocating of right resources which are the basic
needs of any enterprise. the paper attempts to highlight the challenges faced by
entrepreneurs of the SME sector such as difficulty in choosing the right resources,
finding needed resources that are completely new and not available anywhere, lack of
training and research and development, and time and funding for development of
needed resources, etc. Are the obstacles leading to close or shift to alternate business
ideas? the paper finally concludes that large number of startups face difficulty in
development not only in the early stage of inception but also in their advance stages
too. Some problems can be passed through proper planning and strategy, but others
need government intervention and new reforms. The startup entrepreneur must check
all probable ways to solve the problem in advance and especially try for alternative
solutions.

 Trilok Kumar Jain (2019) in his paper titled ‘Policy Initiatives for Startups: the India
Story’ explores the case study on startup initiatives in India. The researcher views the
language barrier as the most concerning issue among entrepreneurs. Youth have an
inferiority complex towards speaking English, only those who know better English
and read English well are getting benefits from policy initiatives.

 Dr.G Sureshbabu and Dr.K Sridevi (2018) in their research paper titled ‘A study on
issues and challenges of startups in India’ highlighted about startup scenario,
ecosystem, issues, challenges, and opportunities for startups in India.

 Ganesaraman Kalyanasundaram (2018) in his research paper ‘Why do startups fail-

a case study based on empirical analysis in Bangalore’ explored the real case studies

19
 how they lead to take towards failure and the precautions to be taken by new
entrepreneurs.

 Sarika Sharma, Mrinal Raj, Tanya Gandhi (2018) in their research paper titled
„Challenges and Issues Faced by Startup Companies in India‟ describe the startup
financing cycle and the journey of Indian startups. Entrepreneurs are facing
marketing, financial, and other challenges although the government is hardly trying
for ease of doing business.

 Mohammed Habeebuddin, D. Sakriya (2017) in their paper titled „Startups in India

and Challenges‟ discussed the various challenges and issues of startups that hinder
growth. This paper deals with secondary data and focuses on opportunities available
for Indian entrepreneurs like large population, demographic dividend, etc.

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 CHAPTER 2: RESEARCH METHODOLGY

Objectives of the study are as follows:

 To study the financial problems faced by start-ups in India.

 To study the Women entrepreneurs in India.

 To find out the reasons behind few or limited start-ups in India.

 To highlight the importance of financing agencies for start-ups in

India.

 To understand the Entrepreneurial Development Plan.

Significance of the study:

The importance of studying financial problems faced by startups cannot be overstated.

Startups are the lifeblood of any entrepreneurial ecosystem, and their financial health
is critical to their success. The study of financial problems faced by startups can help
identify the factors that contribute to their success or failure, as well as provide
valuable insights into the challenges they face during their initial stages of operation.

This study is significant because it will contribute to the existing body of knowledge
on financial problems faced by startups. By exploring the various financial challenges
faced by startups, the research methodology used for this study will help in
understanding the possible solutions to overcome them. This knowledge will be
particularly useful to policymakers, investors, and entrepreneurs who need to make
informed decisions regarding the allocation of resources, investment opportunities,
and the development of effective financing strategies for startups.

Furthermore, this study will help in identifying the factors that contribute to the
success or failure of startups in terms of their financial viability. The research
methodology used for this study will involve a comprehensive analysis of the
financial data of startups, interviews with entrepreneurs, and a review of existing
literature on the subject. Through this analysis, the study will provide valuable
insights into the financial practices of successful startups and the pitfalls to avoid.
In conclusion, the significance of this study lies in its potential to contribute to the
development of effective policies and strategies that can help startups overcome their
financial challenges and achieve long-term success. By identifying the factors that
contribute to their financial health and providing insights into the strategies they can
use to overcome their challenges, this study will be an invaluable resource for anyone
interested in the success of startups. It will provide a framework for policymakers,
investors, and entrepreneurs to develop effective financing strategies and allocate

21
resources in a way that maximizes the chances of success for startups, thereby
contributing to the growth and development of the entrepreneurial ecosystem.

• Data Collection Method: The data collected in this research project is

based on secondary data. The facts and figures are taken by the different
resources.

 Meaning:
 Secondary data means data that are already available i.e., they refer to
the data which have already been collected and analyzed by someone
else. When the researcher utilizes secondary data, then he must look
into various sources from where he can obtain them. In this case he is
certainly not confronted with the problems that are usually associated
with the collection of original data. Secondary data may either be
published data or unpublished data. Usually published data are
available in:
 various publications of the central, state are local governments;
 various publications of foreign governments or of international
bodies and their subsidiary organizations;
 technical and trade journals;
 books, magazines and newspapers;
 reports and publications of various associations connected with
business and industry, banks, stock exchanges, etc.;
 reports prepared by research scholars, universities, economists, etc. in
different fields; and
 public records and statistics, historical documents, and other sources
of published information.
The sources of unpublished data are many; they may be found in diaries,
letters, unpublished biographies, and autobiographies and also may be
available with scholars and research workers, trade associations, labor
bureaus and other public/ private individuals and organizations.
 Advantages and Disadvantages of Secondary Data:
Secondary data is available from other sources and may already have been used
in previous research, making it easier to carry out further research. It is time-
saving and cost-efficient: the data was collected by someone other than the
researcher. Administrative data and census data may cover both larger and
much smaller samples of the population in detail. Information collected by the
government will also cover parts of the population that may be less likely to
respond to the census (in countries where this is optional). A clear benefit of
using secondary data is that much of the background work needed has already
been carried out, such as literature reviews or case studies. The data may have
been used in published texts and statistics elsewhere, and the data could already
be promoted in the media or bring in useful personal contacts. Secondary data

22
 generally have a pre-established degree of validity and reliability which need
not be re-examined by the researcher who is re-using such data.
Secondary data can provide a baseline for primary research to compare the
collected primary data results to and it can also be helpful in research design.
However, secondary data can present problems, too. The data may be out of
date or inaccurate. If using data collected for different research purposes, it
may not cover those samples of the population researchers want to examine,
or not in sufficient detail. Administrative data, which is not originally
collected for research, may not be available in the usual research formats or
may be difficult to get access to.

 Primary Data (Survey Method):

Primary data first-hand data collected by the fresh data. The sources of primary data
from this study purpose are as follows: Questionnaires

 Secondary data:

Secondary data is already available information collected hence for those own
study purposes and it the published source of information the secondary data
sources for this study purpose are:

1. Articles \ Magazines
2. Website
3. Previous Research

 Hypothesis:

Startups are the engines of innovation and economic growth, but they also face
numerous challenges, especially when it comes to managing their finances. Financial
problems like lack of funding, poor financial planning, ineffective marketing
strategies, and poor cash flow management can quickly derail a startup's progress.

To address these problems effectively, it is essential to develop a hypothesis for

research methodology that can help identify the root cause of the problem and provide
appropriate solutions. A hypothesis is an educated guess based on existing
information that can be tested and validated through research.

23
The hypothesis can be as follows:

• Hypothesis 1: Lack of funding is the major reason for financial problems faced
by startups.
• Hypothesis 2: Improper financial planning and budgeting is a significant
contributor to financial problems faced by startups.
• Hypothesis 3: Ineffective marketing and sales strategies lead to financial
problems for startups.
• Hypothesis 4: Poor management of cash flow is a significant cause of financial
problems in startups.

To test these hypotheses, various research methods can be used, such as surveys,
interviews, case studies, and financial analysis. Surveys and interviews can help
gather data about the financial problems faced by startups, while case studies can
provide insights into the successful financial strategies adopted by startups. Financial
analysis can help identify the key financial metrics that impact the financial health of
startups.

Once the data is collected, it can be analyzed using statistical tools to test the
hypotheses. The results of the analysis can help validate or invalidate the hypotheses
and provide insights into the financial problems faced by startups.

For example, if Hypothesis 1 is found to be true, then it may be necessary to explore

alternative funding sources such as grants, venture capital, or crowdfunding. If
Hypothesis 2 is validated, then startups may need to focus on improving their
financial planning processes, including better budgeting and forecasting.

In conclusion, developing a hypothesis for research methodology is crucial to

identifying and addressing the financial problems faced by startups. By using
appropriate research methods and statistical tools, it is possible to validate the
hypotheses and provide solutions to help startups overcome financial challenges.
Ultimately, this can lead to greater success and growth for startups, which can benefit
the economy as a whole.

 Scope of the Study:

24
The scope of this study is to understand the research methodology used to identify
and analyze the financial problems faced by startups. The study will focus on the
following areas:

1. Identifying the financial problems faced by startups.

2. Analysing the causes of these financial problems.
3. Understanding the impact of these financial problems on the performance of
startups.
4. Identifying the strategies used by startups to overcome these financial
problems.
5. Analysing the effectiveness of these strategies.

The financial problems faced by startups are unique and often unpredictable.
However, these problems can have a significant impact on the performance of startups
and their ability to achieve their goals. Therefore, it is important to understand the
research methodology used to identify and analyze these financial problems.

This study aims to explore the financial problems that startups face and their impact
on the performance of the startups. It also intends to identify the strategies used by
startups to overcome these financial problems and determine their effectiveness. The
study will be conducted by reviewing existing literature on the topic, as well as
conducting interviews with startup founders and financial experts.

The research methodology for this study involves both qualitative and quantitative
analysis. The qualitative analysis includes conducting interviews with startup
founders and financial experts to gather detailed information on the financial
problems that startups face. The quantitative analysis involves reviewing existing
literature on the topic, analysing financial data of startups, and identifying patterns
and trends in their financial performance.

The study will provide insights into the financial challenges faced by startups and
identify effective strategies for overcoming these challenges. The findings of the
study will be useful for startups, investors, and policymakers in developing effective
policies and strategies to support the growth and success of startups.
In conclusion, this study aims to contribute to the existing knowledge on the financial
problems faced by startups and provide practical insights for startups, investors, and
policymakers to support the development and growth of startups. By understanding
the research methodology used to identify and analyze these financial problems,
stakeholders can better support startups and help them overcome the challenges they
face.

 Limitations of the study:

The present study focuses on exploring the financial problems faced by startups, but
there are certain limitations to the research methodology used in the study. This

25
section outlines and discusses these limitations, which may affect the generalizability,
validity, and reliability of the study's findings.

 Firstly, the sample size used in the study was small, and may not be
representative of the entire population of startups. The small sample size limits
the generalizability of the study's findings and makes it difficult to conclude
the population as a whole. The findings may not apply to other startups with
different characteristics, such as size, industry, and business model. A larger
sample size could have improved the representativeness of the study and the
external validity of its findings.

 Secondly, the study was conducted using a cross-sectional design, which only
captures a snapshot of the situation at a particular point in time. The cross-
sectional design has limited ability to establish causal relationships and may
not accurately reflect changes in the financial situation of startups over time. A
longitudinal design could have improved the ability to identify causal
relationships and to track the changes in the financial situation of startups over
time.
 Thirdly, the study relied on self-reported data from the participants, which
may be subject to various biases and may not accurately reflect the true
financial situation of the startups. The self-reported data may be affected by
social desirability bias, recall bias, and other response biases. The data could
have been validated through other sources, such as financial reports or
interviews with external stakeholders.

 Lastly, the study was conducted in a specific geographic location and may not
apply to startups in other regions or countries. The findings may be affected
by cultural, economic, and regulatory differences across different regions and
countries. The study could have included startups from diverse locations to
improve the generalizability of its findings.

Despite these limitations, the present study provides valuable insights into the
financial problems faced by startups and serves as a basis for future research in this
area. The study's limitations suggest several avenues for future research, such as
replicating the study with a larger and more diverse sample, using a longitudinal
design to track the changes in the financial situation of startups over time, validating
the data through other sources, and comparing the findings across different regions
and countries.

 Sample Size:

26
 To obtain the primary data, a survey was conducted among the impact of credit card on
spending habits through a structured Questionnaire.

 The no. of the respondent was 50 according to the analysis of their responses has been
conducted.

CHAPTER 4: DATA ANALYSIS, INTERPRETATION &

PRESENTATION

27
Question 5:

 Analysis &Interpretation:
According to above table and chart 92% respondent are student, 6% respondent are
employed, 2% respondent are self-employed, 0% respondent are unemployed, retired,
and other.

28
29
Question 6:

 Analysis &Interpretation:
According to above table and chart 56% respondent thinks filing registration for
regular compliance is smooth in India, and 44% respondent thinks filing registration
for regular compliance is not smooth in India.

30
Question 7.

 Analysis &Interpretation:
According to above table and chart 42% respondent think policies in India for Startups are
helpful, and 58% respondent think policies in India for Startups need more simplicity.

31
Question 8.

 Analysis &Interpretation:
According to above table and chart 58% respondent feel that access to finance is a challenge
to scale up the business, 34% respondent feel that accessing new market is a challenge to
scale up the business, 4% respondent feel that lack of distribution channel is a challenge to
scale up the business, and 4% respondent feel that none of the above is a challenge to scale up
the business.

32
Question 9.

 Analysis &Interpretation:
According to above table and chart 12% respondent think cost of setting up a Startup is 0 to 2
lakhs, 18% respondent think cost of setting up a Startup is 2 to 4 lakhs, 32% respondent think
cost of setting up a Startup is 4 to 6 lakhs, 38% respondent think cost of setting up a Startup is
more than 6 lakhs.

33
QUESTION 10:

 Analysis &Interpretation:

According to above table and chart 26% respondent thinks Startups are really performing
well, 16% respondent thinks Startups are not really performing well, 58% respondent are
not sure that Startups are really performing well or not.

34
Question 11.

 Analysis &Interpretation:
According to above table and chart 22% respondent think it is necessary to be either acquired
or merged with established companies, 28% respondent think it is not necessary to be either
acquired or merged with established companies, and 50% respondent are not sure whether it
is necessary or not to be acquired or merged with established companies.

35
Question 12.

 Analysis &Interpretation:
According to above table and chart 50% respondent believe the allegations faced by the
startups, 8% respondent do not believe the allegations faced by the startups, 42% respondent
are not sure whether they believe the allegations or not.

36
Question 13.

 Analysis &Interpretation:
According to the above table and chart 46% of respondents think education is required to
establish a startup or to become a successful entrepreneur, 20% of respondent think it is not
required, and 34% of respondents are not sure whether it is required or not.

37
Question 14.

 Analysis &Interpretation:
According to the above table and chart, 8% of respondents thinks only education matters of
the success of a startup, 20% of respondents think only experience matters, and 72%
respondent thinks both matters.

38
Question 15.

 Analysis &Interpretation:
According to the above table and chart 8% of respondents think up to 1 lakh working capital is
required for one year, 40% of respondents think 5 lakhs is required, 22% of respondents think
10 lakhs is required, and 30% of respondents think more than 10 lakhs is required.

39
 CHAPTER 5: FINDINGS, SUGGESTIONS & CONCLUSIONS
Many businesses start with a dream, but it takes more than just a dream to grow into successful
businesses—including the tenacity to overcome the many challenges facing start-ups today.
Start-ups take time, effort, and energy. Funding is a major concern for start-ups and small
businesses. When the economy tanked, it made it harder to convince investors and banks alike
to part with the cash that is essential for growth in the early days of a business. Today's Credit is
tight, and it is not clear when it will become more readily available. There is a growing trend of
smaller initial investments in early-stage start-ups. Intensifying the challenge of raising funds,
major leaps in technology have led investors to raise the bar in terms of how much legwork
entrepreneurs are expected to do before even pitching their companies.

5.1 Suggestions:
Solutions for the reason of failures:

 Entrepreneurs should conduct in-depth market research to understand the needs

of society and then proceed to the product design phase.

 Entrepreneurs need to analyze their business ideas and think out of the box. An ideal
example can be the number of start-ups in the e-commerce industry, but rarely does
anyone focus on logistics-based start-up ideas, where the need arises.

 Start-ups should aim to hire those people who share the same zeal to make the start-up
successful.

 Entrepreneurs should reach out to multiple venture capitalists and know who is better
aligned towards the goals of start-ups.

 Business process should involve meetings of the management team and technical teams
every week to ensure a smooth workflow.

 Start-ups should be policy-driven and offer the same salaries to team members. It should
offer incentives for performance-based work. Doing so will help appropriately manage
the funding.

 Entrepreneurs can enroll themselves in personality development classes to improve their

soft skills or hire an experienced person for business communication.

40
  Entrepreneurs should keep a close watch on the growing demand for their product and
focus on response time and capacity planning.

 An entrepreneur should keep up with changing market dynamics to see a decline in the
demand for their product and take necessary steps to run the start-up profitably.

 To remove the obstacles for Women Entrepreneur:

The basic requirement in the development of women's entrepreneurship is to make aware
women of their existence, their unique identity, and their contribution towards the economic
growth and development of the country. The elimination of obstacles to women
entrepreneurship requires a major change in traditional attitudes and mindsets of people in
society rather than being limited to only creation of opportunities for women. Hence, it is
imperative to design programs that will address to attitudinal changes, training, and supportive
services. The basic instinct of entrepreneurship should be tried to be reaped into the minds of
the women from their childhood. This could be achieved by carefully designing the curriculum
that will impart the basic knowledge along with its practical implication regarding the
management (financial, legal, etc.) of an enterprise. Adopting a structured skill training package
can pave the way for the development of women's entrepreneurship. Such programs can train,
motivate, and assist the upcoming women entrepreneurship in achieving their ultimate goals.
Various schemes like the World Bank-sponsored programs can be undertaken for such
purposes. The course design should focus on imparting input on profitability, marketability, and
practical management lessons. Besides, there should be consideration in helping the women
entrepreneurs in balancing their family life and work life. As a special concern, computer-
illiterate women can be trained in Information Technology to take advantage of new technology
and automation.

The initiatives taken from these well-established entrepreneurs for interacting with such
upcoming women entrepreneurs can be proved to be beneficial in terms of boosting their morale
and confidence. The established and successful women entrepreneurs can act as advisors for the
upcoming women entrepreneurs. It may result in more active involvement of women
entrepreneurs in their enterprises. Infrastructure set up plays a vital role for any enterprise.
Government can set some priorities for women entrepreneurs for the allocation of industrial
plots, sheds, and other amenities. However, precautionary measures should be undertaken to
avoid the misuse of such facilities by the men in the name of the women. Even in today’s era of
modernization the women entrepreneurs depend on males of their family for marketing
activities.

41
 BIBLIOGRAPHY

 Google Scholar
 OpenAthens
 Understanding the financing challenges faced by start-ups in India-Research Paper.
 Study on Women Entrepreneurship in India- https://www.researchgate.net.
 Start-up India-https://en.wikipedia.org/wiki/Startup India.
 Economic Times Website-Challenges and Opportunities
 Case Studies-www.entrepreneur.com
 Mascarenhas, Romeo S, Business Planning and Entrepreneurship Management,
Published byVipul Prakashan ,2017.
 Article-The Economic Times News Paper

42
 Conclusion

In conclusion, this study on the financial problems faced by start-ups in India highlights several
critical challenges that new ventures must navigate to succeed. The findings emphasize the
importance of financial planning, securing adequate funding, and addressing gaps in market
understanding, talent acquisition, and management practices. Start-ups often face difficulties in
accessing capital, scaling operations, and balancing operational costs with growth ambitions.

However, despite these challenges, there are promising opportunities. Government initiatives
like "Startup India" offer significant support in terms of funding, infrastructure, and policy
simplifications. Entrepreneurs are encouraged to leverage these resources while innovating and
seeking mentorship to enhance their financial literacy and strategic planning capabilities.

The study also sheds light on the growing role of women entrepreneurs and the specific barriers
they face, such as balancing familial responsibilities with business operations. Tailored
programs aimed at skill development and empowerment are essential for addressing these
issues.

To ensure the long-term sustainability of start-ups, it is crucial to create a robust support

ecosystem that includes incubators, financial literacy programs, and access to networks of
investors and mentors. With the right combination of policy support, financial planning, and
market awareness, start-ups in India can overcome their challenges and contribute to the broader
economic development of the country.

43
 BIBLIOGRAPHY

 Google Scholar
 OpenAthens
 Understanding the financing challenges faced by start-ups in India-Research Paper.
 Study on Women Entrepreneurship in India- https://www.researchgate.net.
 Start-up India-https://en.wikipedia.org/wiki/Startup India.
 Economic Times Website-Challenges and Opportunities
 Case Studies-www.entrepreneur.com
 Mascarenhas, Romeo S, Business Planning and Entrepreneurship Management,
Published byVipul Prakashan ,2017.
 Article-The Economic Times News Paper

44
 APPENDIX 1
Questionnaire

45
46
47
48