Thursday , 27 October 2016

SEBI to come up with norms for crowd funding: Achhe Din for Startups?

Securities and Exchange Board of India is one of the few monitoring boards in the Asian countries that have kept a lot of frauds and scammers under control. SEBI is not only pulling bluff masters out of the market but is also ensuring that MNCs are not breaching rules.

SEBI to come up with norms for crowd funding: Achhe Din for Startups

SEBI to come up with norms for crowd funding: Achhe Din for Startups

Crowd funding is one of the easiest and most suitable ways of acquiring seed funds for startups. The concept simplifies the fund generation and its disbursement.

Some of the common benefits of crowd funding are listed here:
1. When you acquire funding via crowd funding you are not leveraging out a huge number of equity to a single person. This way you will be able to retain the control over your business.
2. The money comes from varied people from around the world. People contribute according to their budget hence equity gets distributed equally and no two or three parties can come together to form a majority. You can also define the amount of investment one can make.
3. Repayment is always easier because you have to pay small amounts. The equity grows and you have enough money.
4. You can set the date of repayment at the time of acquiring funds—based on your business strategy—and repay with great ease.

Now let’s have a look at how SEBI is planning to simplify it further:
They have developed a team of professional and officers to come up with the new set of norms. The team has been further divided into sub-divisions for looking into the prospects of varied areas of contemporary business.

“The committee is very active and sincere about it and I am sure in a month from now, we will get the final report and then we will come to the area of implementation,” Chairman UK Sinha said.

SEBI is not only looking forward to create new norms on the basis of ongoing business models in the country. This time they are considering following points as well:
• Learning from the past and including claws that helps companies grow and repay with great ease. They have taken lessons from Auto crisis that occurred a few years back.
• Studying and understanding how crowd funding works for global enterprises in varied corners of the world.
• They have also enrolled applications from entrepreneurs and are looking forward to ease the rules for doing business.
• Sebi has set up a committee under another Infosys co-founder Nandan Nilekani to suggest ways for boosting MF industry.

A lot has happened in the country since the new government overtook the front seat. A lot of other schemes by government and programs are helping startups acquire the requisite fund and make the dream start. Supporting startups at the beginning is one of the best things one can do to make the startup community in the country grow.



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