Topic9-UtkershSagreiya

Lackofriskcapital most projects die out due to lack

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Unformatted text preview: sed to a wide variety of fields and experiences. Lack of Risk Capital Most projects die out due to lack of funding in the early stages. Traditionally in India, banks are looked at as a source of funding. However, given the inherent risk associated with projects involving radically innovative ideas, banks are generally reluctant to fund these projects. India has seen a notable increase in the VC funding 4 , however this comes further down in the project life-cycle. Government funding is available, but is generally limited to projects which exhibit social utility. Thus, market driven and profit-maximization oriented funding is what is required to fund innovative ideas with the potential to create market disruption. Low Risk Appetite for Intangibles The Indian style of innovation focuses on “jugaad” i.e. making things work and adapting them to the relevant context, as is evident from the success stories of Indian firms in reengineering. However, there is a lack of “New to the world” products due to the inherent riskaversion that is often exhibited by the lack of appetite to inv...
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