Just how a germinating seed needs water, sunlight and proper nutrients to grow into a beautiful plant, any budding entrepreneur also needs funds to implement his/her startup ideas. This initial investment which helps to cover up the basic operating expenses, research and development expenses etc to grow the business until the product itself starts generating revenue is called Seed capital or Seed funding. Generally, seed capital is considered as the first round of investment until one develop his/her business to a certain level after which he/she can find venture capitalists to invest in them. So, where does the seed capital come from? Some of the easy sources may include :
- Friends or Family
- Crowd Funding
- A seed-stage angel investor
- Corporate seed funds for startups
- Self – financing
- Government subsidized loans and grants
Finding an investor can be a challenging task as your startup is still in conceptual phase. Generally, the banks often ask for collateral against the applied loan. Even more, the interest rates may be high and not every person can afford to take the risk. On the other hand, investors may invest in you and your idea in exchange for certain equity in stake. This means you will be losing your share of full decision making authority over your business in exchange for his contributed amount of capital. However, reaching out for friends and family or using your own savings is always a good idea if you don’t want to get involved in debt. There are also government grants and subsidized loans in recent years that plan to support to aspiring entrepreneurs in the country. So, before you make your decision, make sure to do a good research and weigh all the pros and cons of each source to find one that actually compliments your business model, as it plays a determining role in the future of your business.
The author is a CA student. If you want to add more information on the given post, please comment below and your comment will be incorporated in the article.
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Nepal makes major jump in ‘Ease of Doing Business’ Ranking 2020
The Doing Business project by World Bank provides objective measures of business regulations and their enforcement across 190 economies and selected cities at the subnational and regional level.
Nepal jumped 16 points to the 94th position on the World Bank’s ease of doing business ranking for 2020, with DB score of 63.2.
In 2019, Nepal was positioned at 110th rank which was a slip from its 105th position in 2018.
The Doing Business project by World Bank provides objective measures of business regulations and their enforcement across 190 economies and selected cities at the subnational and regional level. Doing Business captures several important dimensions of the regulatory environment as it applies to local firms. It provides quantitative indicators on regulation for starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. Doing Business also measures features of employing workers.
Ranking of doing business topics
Starting a business:
This topic measures the number of procedures, time, cost and paid-in minimum capital requirement for a small- to medium-sized limited liability company to start up and formally operate in each economy’s largest business city. Nepal ranked 135 among 190 economies in this topic.
Dealing with Construction Permits
This topic tracks the procedures, time and cost to build a warehouse—including obtaining necessary the licenses and permits, submitting all required notifications, requesting and receiving all necessary inspections and obtaining utility connections. In addition, the Dealing with Construction Permits indicator measures the building quality control index, evaluating the quality of building regulations, the strength of quality control and safety mechanisms, liability and insurance regimes, and professional certification requirements. Nepal ranked 107 among 190 economies in this topic.
The topic measures ease of getting electricity in Nepal by a business firm or warehouse if it has to apply for a new one. Nepal ranked 135 among 190 economies in this topic.
This topic examines the steps, time and cost involved in registering property, assuming a standardized case of an entrepreneur who wants to purchase land and a building that is already registered and free of title dispute. In addition, the topic also measures the quality of the land administration system in each economy. Nepal ranked 97 in this topic out of 190 economies.
This topic explores two sets of issues—the strength of credit reporting systems and the effectiveness of collateral and bankruptcy laws in facilitating lending. Nepal has made significant improvement in this front and thus is ranked at 37th position out of 190 economies.
Protecting minority investors
This topic measures the strength of minority shareholder protections against misuse of corporate assets by directors for their personal gain as well as shareholder rights, governance safeguards and corporate transparency requirements that reduce the risk of abuse. Nepal ranked 79 among 190 economies in this topic.
This topic records the taxes and mandatory contributions that a medium-size company must pay or withhold in a given year, as well as the administrative burden of paying taxes and contributions and complying with post-filing procedures (VAT refund and tax audit). Nepal is quite behind when it comes to ease of paying taxes ranking at 175th position out of 190 economies.
Trading across borders
The topic records the time and cost associated with the logistical process of exporting and importing goods. It also measures the time and cost (excluding tariffs) associated with three sets of procedures—documentary compliance, border compliance and domestic transport—within the overall process of exporting or importing a shipment of goods. Nepal ranked 60 in this topic.
The enforcing contracts indicator measures the time and cost for resolving a commercial dispute through a local first-instance court, and the quality of judicial processes index, evaluating whether each economy has adopted a series of good practices that promote quality and efficiency in the court system. Nepal ranked 151 out of 190 economies in this topic.
It deals with the time, cost and outcome of insolvency proceedings involving domestic legal entities. Nepal ranked 87.
Nepal’s Position in South Asia
Nepal ranks third in South Asia, India being first.
In overall, India jumped 14 places to rank 63. It also secured its position in Top-10 Improvers. China ranked 31
Also know this
Top 10 countries on Ease of Doing Business
- New Zealand.
- Hong Kong China
- Korea Republic
- United States
- United Kingdom
Worst 10 countries on Ease of Doing Business
- South Sudan
- Central African Republic
In 2014, Nepal ranked 94th position but then it went on slipping from the position to 110th, until this point where it has bounced back to 94th position. However, Nepal could not make to Top-20 Improvers list, which is made based on reforms implemented in easing doing business, which should be of concern.
For complete report, click here
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Being an entrepreneur in Nepal
Being an entrepreneur isn’t easy in a country where you are judged by money you make and not the impact you create. Your idea, your dream, your ambition are considered as threat than opportunity to collaborate for greater good. It’s not easy to be an entrepreneur in a country where investors are interested to invest only if they can hijack your business. It’s definitely not easy where rents are nothing less than 20,000 per month. And, it’s definitely not easy where no one is interested to work for you for anything less than salary s/he would get abroad. Needless to talk about taxes and policy hurdles.
You are celebrated only on Facebook. In reality, you are secretly hated for your success and growth and popularity. It’s not easy to be an entrepreneur in a country with leg-pulling culture.
Sometimes, it feels like entrepreneurship is just a new high-school band trend, where everyone wants to become next Metallica, with a dream to make a world tour, but in reality you are judged for your long hair, tattoo; no family support, costly recording, and no one to buy your album and sooner or later, you be like:
“Me and some guys from school
Had a band and we tried real hard
Jimmy quit, Jody got married
I should’ve known we’d never get far
Summer of 69”
Despite all that, there are some guys out there not giving up on their entrepreneurial idea. Finding a way out to resist the temptation of good paying job, home or abroad, and keep trying to make fortune here in one of the poorest countries itself. They don’t remember themselves when was the last time they took the salary but still never fail to pay salary on time to colleagues working for him/her. Constant pressure from family and society to make good money but still not taking the shortcut route to money compromising the impact and ethics. Such guys are real entrepreneur to me. They exist.
I bestow my love and respect and support to them. You guys are in making of Bryan Adams despite living Summer of 69.
May you not give up.
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