An incubation centre for new entrepreneurs is the latest buzzword in the corridors of the industries department.
The new idea has replaced talk of creation of venture capital fund mooted by the government to help start-ups in the state over a year ago.
Industries director Shailesh Thakur told The Telegraph on Monday that before the venture capital fund became a reality, the state had decided to form an incubation centre to assist new entrepreneurs.
“Work on creation of the venture capital fund is on. The department held discussions with the stakeholders, who suggested that an environment for the same needed to be created first. Hence, the state government has decided to form an incubation centre first for the start-ups and the help of Bihar Industries Association (BIA) has been sought it. The BIA has agreed to give space on its premises for setting up the centre but has approached the state government for other forms of support. Once approved, work will move in full flow and the centre will be formed,” the senior department official told The Telegraph.
The official added that the centre would help new entrepreneurs in many ways.
“Any entrepreneur wishing to set up any form of a unit for the first time would get help from the incubation centre. There would be industrial experts from whom the entrepreneur can get details about the industry scenario in the state and the possibility of success of the unit they wish to set up. At the centre, the entrepreneurs would get monetary help to start their units. The amount hasn’t been decided but it may range from Rs 5 lakh to Rs 15 lakh. He can interact with industrialists running similar businesses in Bihar to learn from their experiences,” said Thakur.
The idea of developing venture capital fund was first floated in January 2013. Principal secretary, industries, Naveen Verma had told The Telegraph that talks were on with the Securities and Exchange Board of India (Sebi) and the RBI regarding the same.
Venture capital is a kind of financial capital provided to a private limited company which is starting, that means it is in its early stages and has high potential. The risk factor, too, is high as these companies are new. The venture capital fund makes money by buying the equity of the companies it invests in. They take a risk by buying the shares of these companies and expect a high return. The financial institutions, before buying the equity of any start-up company, first study the company in detail and a valuation of the same is done before investing.
Towards late-2013, the state government had said its stake in the venture capital fund would be 25 per cent.
“The state government is focusing on the participation of private parties towards the formation of the fund. The management of the fund would remain in the hands of the asset management company which would be appointed soon,” Thakur had said earlier.
“It is not that the state government would not form the venture capital fund. But the government thought before that, a smaller version of the same in the form of an incubation centre would be a good idea. Once the centre becomes a reality and runs smoothly, the work would be further increased,” said another industries department official.
between Rs 5 lakh
and Rs 15 lakh
similar business in
the state to know
Advice from industrial
experts on industry
scenario in the state
and possibility of
success of the industry entrepreneurs wish
to set up