Trivandrum: Are you an Entrepreneur who wants to get your startup recommended by an Incubator for the Prime Minister’s Startup India initiative? Then be ready to shell out Rs. 35,000 to get your startup verified and get a recommendation letter. Is it a scam? Not exactly, but sounds like it.
The fees include a Rs. 10,000 non-refundable application fee and a Rs. 25,000 assessment fee. The application process and fee structure has been framed by an incubator industry body, ISBA.
Earlier this week, the Kochi based Startup Village (Indian Telecom Innovation Hub – TBI) started accepting applications for startups to get recommendation letter to become officially recognised by the Government of India. Startup Village would recommend startups as per the guidelines of the Department of Industrial Policy & Promotion (DIPP), on payment of this fee.
However, the startup community in Kerala is not willing to accept this outrageously high fee. Many feel it is highly criminal to charge a startup just for a recommendation. After all, it’s DIPP which will finally issue the startup certificate. Some see it as an opportunity by Incubators to fleece the start-ups. There are many who also feel it is a scam by ISBA which is seen as a dubious association. It is not a Government body and most top class incubators are not part of it.
According to a Bangalore based serial Entrepreneur, “Seems like Incubators have finally figured out a survival strategy. Charging Rs. 35K for startups to get certified that they are a startup is the new business model for incubators in India. Suddenly start-ups have turned milking cows for incubators.”
Nelvin, one of the earlier entrepreneurs to start off in Technopark, Trivandrum commented on Facebook, “For an actual pure breed startup, 35k is probably the running cost for a couple of months at least and the logic now is that they sacrifice that money to get a paper which says that they are a company which is cash strapped! Wow, who writes these logic and ideas? Extremely shameful!”
Meanwhile Jayashankar Prasad, CEO of Kerala Startup Mission, the erstwhile Technopark TBI, has clarified that they are doing it for free, “We do not charge anything for recommendation to our startups.”
Entrepreneurs are advised to exercise caution to avoid getting cheated. Also take note that getting your startup verified and having a recommendation letter does not automatically make your startup eligible for benefits from GoI.
Kerala IT News