 I was associated with the incubation activities and entrepreneurship initiative of IIT Bombay right from early days but of course after Professor Fatak initiated the pilot here. So when we were moving from pilot to the establishment of a formal center for incubation and entrepreneurship I was associated at that time and I was responsible for creating some of the initial policies and procedures and also I think my experience went little further than that since I was involved with SINE as some people say the entrepreneurship bug bit me and I have now my own company. So I can tell you my own journey of last 2-3 years how it has progressed, what are the challenges that one faces right, how much an incubator helps and how much you are still on your own to take your struggles and your company to some level. So I can share with you those experiences. So to begin with okay this is the broad outline I will just briefly talk about the initiative I think just repeat maybe some of the points that you might have already gone through. I will then talk about the incubation facilities and the kind of policies and procedures we tried to set up, what was the objective of those policies, what exactly did we want to achieve and then conclude with my own experiences and challenges that I see in any incubation activities. I understand that your interest as a part of this workshop is to set up similar facilities right not to become an entrepreneur yourself right because that makes a big difference on which side of the table you want to be right whether you are setting up infrastructure and facilities and policies or I think it is important to be on both sides to really understand what an entrepreneur needs, what are his you know challenges and to what extent an incubator can really meet them and address them and to what extent you should leave them alone right I think that also is an important issue. The context is that IIT Bombay you know is a large institute we have 400 plus faculty in fact we are a postgraduate and research institute really with more than 1000 PhD students and more than 1500 master students who do lot of R and D activities. So there is a lot of innovative work being done here it is a part of our postgraduate studies and lot of research gets done. How much of this research of course it is much of it is new but how much of it is innovative and ready for entrepreneurship is a different issue. We all are required to do research publish and have something new and interesting in our work and there is a large workforce or number of people who are involved in this. IIT Bombay always wanted to you know share this innovative work with the industry and there is a dean of research and developments office which is our interface to the industrial world and through this channel we try to share our expertise and skills with the industry and there are mechanisms by which what we do can be transferred to the industry ultimately what you do must be useful and one way of directly being useful is to share it with the industry and there are well defined policies now by which we can transfer these technologies to the industry. Now when you discuss this issue of transfer naturally the one who developed the technology has to also have some benefit and these benefits have been defined by institute and this is a fairly well established setup at the institute and that is done through dean R and D's office. Now if you want to further encourage your faculty and students to take the research on their own to the market you need to really address a few more issues and foundation for this was laid by IIT while trying to define its intellectual policies. I think the first step towards you know entrepreneurship coming out of educational and research institute is to have very clearly defined intellectual property and this was done and this encouraged the faculty and the students to understand the innovations that they are doing and if they are you know in a position to take it to the next level to the market then IIT Bombay made it available to them. So intellectual property there are number of issues that need to be addressed here. So I think what any institute if it is planning to take up this activity I think the first step would be to clearly define the intellectual policy property because as an employee of IIT whatever work I do naturally the intellectual property is with the institute although I am author of that work the ownership is always with the institute and the ownership has to be handed over to me in order for me to convert it into a enterprise. So this has been defined naturally when it is handed over to me for entrepreneurship IIT would expect to gain something out of it. So you need to define this as a part of your policies and procedures. So once this was there and the parallel thing that happened at that time which Professor Farrakh must have shared with you is the pilot incubator which was set up at the time when information technology was at its peak and most of the initiatives used to be in the dot coms right everybody had an idea to share with the public and therefore everybody was trying to set up a you know internet based company. Basically the policy defines how the work that has been done by an individual right can be shared and what would be the basis of that sharing and it has to address many aspects of this because things can be quite complicated. The work may be done by me alone or it may be done by me and my students it may be done as a part of my employment at IIT it may be done as a part of research funding from the government or it may be also done based on some consultancy work that I do with the industry. All of this has to be defined a proper sharing policy has to be put in place right. So I mean basically the matter of numbers right you need to define. So for example IITs policies are very generous. So if I do consultancy or I want to do technology transfer based on my work you know IIT has a sort of 30 70 kind of a sharing policy which is I think fairly you know it is in the favor of the author and encourages him to do work which is practical and useful and also get associated with the industry. So it is a very open and flexible kind of a policy but naturally there are processes through which this has to be clearly identified. Okay now IP has to be first clearly understood IP is a policy on which you know which has been clearly the work which is protected naturally has to be part of some patent or some such thing right and IIT has policies for patenting. Now work may not also be patented because patenting has a cost. So I may do a work which is which gets published and once you publish it naturally only copyright you have but the work itself is in public domain. So in this case what are the issues involved in taking it further for entrepreneurship. So all those also have been identified and defined. What the author will give the institute that I would like to have a look at. See no institute has everything institute is the owner whereas I am the author. Now question is as far as I am the author and there is no other user it remains as a ownership of the institute only when there is somebody who wants to use it comes the issue of sharing whatever benefit we receive from that work and that benefit is shared in the 30 70 percent right. So I think this was the first milestone in moving towards you know and encouraging people to look at entrepreneurship as an alternative right as a career path and then there was a yeah I think NCL also probably has all these policies in place. So that is first step then of course there are more things that need to be done because when I get into entrepreneurship I need something more not just the idea right. So we will come to that little later but I think the point is that I am an individual who is employed in this institute the work that I do is in this context I need to have ownership of that in order to build an organization or a product and then sell it in the market. So I need IIT's permission and that permission comes under the context of this IP policy okay. So at this point then the other track which was very important and which happened at this institute was the pilot incubator that you have already been introduced. This just places the whole thing in the context of you know end to end that work that you do how does it find use right. So as you can see that an institute primarily engaged in research and development you demonstrate that technology to your industry partners you develop prototypes and demonstrate its usefulness but beyond that it becomes more focused towards industry and entrepreneurship right and you need to set up the production or manufacturing of that you need to market it right and then there has to be a buyer who will find value in what you have done. So this is the whole spectrum and you need to keep this in mind in order to understand the challenges of entrepreneurship right. So it is we education is generally towards one end right and we are you know engaged in R&D activities and there are aspects of industry and manufacturing and marketing which generally we are not aware and in order to make a successful company we really need to understand the whole spectrum of these activities for the success of any organization. So we are at the one end we really need to the other end what needs to be done what are this industries what the industries do what are what is their focus is sort of brought out in order in order in trying to understand how a research is taken to the end user and you can see that technology transfer is one way of achieving this right that is where IIT will talk to the industry and will share the research and maybe get a one time consideration for that right or of course it could be also a some kind of a royalty also is possible. So we have two ways by which we can join hands with the industry one is doing outright technology transfer the other is to enter in some kind of a long term revenue sharing or some kind of a royalty so that the industry can exploit the research and you know research work that has been done in the institute. Now this will be replaced then by an entrepreneur you know the faculty himself may set up a company who wants to do that and therefore there will be a technology transfer and that company will have to undertake manufacturing, marketing and so on. So with this pilot in place which actually inspired many of our students to look at this option and also some of the faculty we wanted to clearly understand what are the challenges right and these challenges are related to the risk associated in starting anything new. So what are the barriers to a new venture creation and we need to understand this so that we can facilitate and reduce the risk associated with new ventures. So incubation facility the goal of that facility naturally would be to remove these barriers. So one of the barrier is naturally that you know there are opportunities in the market today should I really take up a job or should I get into entrepreneurship and this is a choice that has to be made by individuals specially our students are always you know this is one of the first decision that they need to make they might end up doing good work but whether they want to carry it forward with entrepreneurship or to take up a job naturally this is the aspect of risk. So if I can minimize those risks and help them then they might be more entrepreneurship oriented than let us say a job oriented kind of a professional. There is also an issue of high upfront investment therefore we need some kind of a financial help that we can provide to them generally there are not too many role models so we need to have some kind of mentorship in place so that we can minimize the risk of failures because these are young people or people who are not exposed to business world or in the market and we need to give them adequate mentorship so that the risk of failure can be reduced or minimized. We have to also educate people about how to what are the rules regulations in starting new companies right what are the government policies what are the licenses required what kind of you know there is you as you are aware there are company laws those company laws many of us in the academic world are simply not familiar and they look very difficult so we need to create resources or what is referred here as ecosystem by which this load can be reduced from the new entrepreneurs. In fact this is quite an issue because I have gone through this in the last two years and there are so many rules and so many filings that you have to make that if you do not you may not even be aware and you might really make mistakes which might lead to some penalty because you have not been following the rules and regulations so you need to provide this support so this is the same story that you have heard before that we had a pilot incubator and we had a small infrastructure which was created to support so what exactly did this pilot demonstrate in terms of the barriers that we had mentioned earlier it allowed people to walk in with an idea and they gave the initial support and resources which was needed by them in order to start their company. There was a equity based consideration that means the incubator gave the facilities for on the basis of sharing the equity right instead of explicitly charging because the new ventures do not really have much cash in hand the only thing that they really come to you with is the equity and they can offer you that equity for whatever services and facilities that they need so this was an ad hoc kind of a equity based model in fact that time we did not even know who will hold this equity who owns that equity because there was no no there were no rules and policies in place the initial companies just agreed to give the equity but in fact from our side we were not ready to take that equity the whole thing was quite informal but but it actually educated us in terms of what was required in order to formalize this model in order to take it to the institute level from the pilot so pilot we regarded it as quite a successful story and there were a number of experiences that we got from this which helped us to move forward this also created a lot of excitement within the Institute because this came to be known as another option to the faculty and the students and if you see that time there were a number of new success stories like like the IT especially in the IT domain with Infosys and others so they became the role models for the students and everybody was excited with what was happening in that domain and also there was a low entry barrier as far as the IT companies were concerned it was also easier to set up the facilities what you really needed was to give a few systems and a place and the people could start the company and at least work towards creating a prototype and a product so the barrier to the initial work that is required in entrepreneurship was very low and that is what the pilot could provide then the when with the success of this the Institute then decided to see whether we can make a separate initiative out of this which is available to all the departments not just confined to the IT domain but also is available to the other engineering faculties so for this we to formalize the policies and procedures and also try to under the Institute commitments which are necessary in order to formalize this the first and the most important was really the consideration model since the intellectual properties owned by the Institute and that is to be transferred it is not possible to expect one time charges from young entrepreneurs so the only successful model all over the world is to really have an equity based model which means that when you transfer the technology developed within the Institute and on which the Institute has a intellectual property rights you would like to give this away for an equity consideration so naturally then the question comes who can hold the equity and since IIT as a government Institute is not permitted to hold equity we decided to create a separate society which is really a society set up by what we call friends of IIT basically these are alumni and our ex students and some office bearers of the Institute who created this as it is called section 25 company in the country which is really a society which is a nonprofit kind of organization and this is an umbrella organization which would own that incubator and which would hold the equity on behalf of IIT this was the model that we thought of so sign was set up as an independent legal entity although the office bearers and the board will be really mainly drawn from the Institute because the Institute policies will have to be implemented and the Institute will like to oversee the functioning of this society so it has a functional autonomy it has its own governing board and it has a specific mandate to set up a business incubator and to help these organizations which are incubated there to to build successful companies initial funding from IIT came in the form of space infrastructure and so on right and also at the same time government of India through department of science and technology had taken up a initiative called technology development board and TDB also wanted to get associated with this initiative and they also agreed to share some of the funds for the initial setting up of the incubator there was a funding from alumni also and we wanted to start of this initiative by creating a big awareness within the campus because once you have an incubator you need to have a steady flow of applications for starting new companies so on day one this may not happen and you need to create an awareness and you have to tell people that not every research that you do is a candidate for incubation and entrepreneurship therefore you need to consider the utility of your research in the in the ongoing or on the state of art kind of a industrial context so we thought of doing some pre incubation and regular incubation and also some virtual incubation the virtual incubation was primarily limited to you know companies which are which need infrastructure which is not possible to provide in the IITs or science facilities right because ultimately let's say if you have a idea coming from chemical or metallurgy or something naturally you cannot give them infrastructure which may be needed for their incubation so your virtual incubation help us in two ways one is the companies for which the office kind of infrastructure is not the main requirement but they really need something much more than just the office premises and also because we are limited facilities we thought that we could admit more than whatever facilities could hold through the concept of virtual incubation so there were a few companies that we tried to put in this category yeah right since there is no specific space given to them but they they are still registered as the science companies and therefore they will have access to not just the office facilities the regular office facilities but all the mentoring and other legal support that IIT thus that the sign can provide so help in registering their companies help in maintaining their accounts etc even with virtual incubation there would be some equity that IIT will take because of the intellectual property that might have been transferred in fact we clearly try to define the the scope for sharing this equity the the equity agreement is not only covering the intellectual property but it is also covering the infrastructure and the branding that happens through IIT and the network that IIT Bombay will make accessible to the incubated company right through its alumni network through its industrial network and also the the support that the Institute's infrastructure can provide because we have a large number of research labs available on the campus faculty who are expert in various areas and also the library support so all these are also part of the environment which we share with the incubated companies therefore there are three dimensions which are covered by our equity agreement the intellectual property the the infrastructure and also the the IIT's brand and access to the IIT's network the the the industry network and the alumni network so even in the case of virtual incubation what is really missing is the physical infrastructure but the rest is still in place and therefore they are the companies which are under the IIT's broad policies of incubation. The other thing is sign versus other incubation line and any differences any contradictions any different way of looking at sign incubator versus other incubators if you have any experience that will be wonderful if you can share it with you. We will talk about some other models but you know the I am talking about sign as a model of a typical government organization which is which is sharing the intellectual property generated within the educational and research activities right but there are definitely other models yeah I but the one which I just probably can mention right away is incubators being set up by industrial associations right CII for example the confederation of Indian industries may actually create an infrastructure basically see all incubations are trying to facilitate the new entrepreneurship some of the things that they may do is to first give the infrastructure the second is to give you help you in marketing and business development and third they may actually make some funds available so these are number of things that any incubator can do what an incubator in IIT can do and what an incubator under confederation of industries can do will depend on resources available to them for example some VCs are setting up incubator like say in Bangalore there are few who are saying that let's set up our own incubators let us receive applications we'll create a small infrastructure right and we'll mentor them and move maybe on day one we'll also provide them some funds again this will be done based on some equity consideration right so overall I think there may be some few constraints which are missing in different context for example ability to hold equity this constraint will not be there for others whereas it is a constraint at IIT right because we cannot take profits out of sign into IIT that will be another constraint whereas these constraints may not be applicable to a VC funded incubator or it may not be available to or it may not be applicable to industry funded incubator but I think when when you talk of an incubator you have to consider these three requirements of any incubating company a company needs funds company company needs space and infrastructure and company needs some hand-holding so can you provide these under whatever umbrella that you can define so so we tried to institutionalize what was learned in our pilot experience okay then when we are setting up the when when we are moving from pilot to formalizing this and the institute level we need naturally needed policies and procedures and before define you need to also understand the scope of your business incubator you want to put put up so at first thing that we realized was to first you know in trying to define the scope the the exercise that I we undertook was to define the vision and mission for our business incubator because that puts in place you know what are your short term and long term goals and what can be achieved right so we spend considerable amount of time with some of our leading alumni who have been very successful business people in trying to define the vision and mission so for example is social entrepreneurship to be included are you focusing only on successful entrepreneurship or you want to encourage people to be entrepreneur you don't want to worry too much about they being successful or not successful so I think some of these goals have to be clearly defined before you can really define the policies and procedures in details right so so for example should the business incubator be profitable right or you just want to have it as a support facility should it be proactively construct creating the the the infrastructures and the mentoring mentorship and legal other supports or it should be on a demand basis what kind of monitoring you would do all those things need to be clearly understood before you can you know develop these procedures and policies in details you need to understand the constraints would you be funding these people or would you just provide space what are the regulations within the Institute let's say so if I am a faculty and I am setting up my entrepreneurship how much time can I give right and what would be my consideration and if my company becomes a very successful company so is it only related to equity or there is something more all those things have to be clearly defined so we we try to understand these issues because many of the initial proposals came from faculty and naturally they have other responsibilities so how much time can they really devote to such activities has to be clearly worked out and understand the areas in which you want to sub give support to them so science science vision and mission was set up I suppose you have probably seen this already so we want to create it and create an environment to translate the knowledge and innovation that is generated within the Institute so we don't really want to become a facility which can be you know shared with outside also and who can come here and set up their companies here but it has to be within the Institute and we won't our mission clearly said that we want to support innovation and knowledge based entrepreneurship in the IIT Bombay community specific that our goal is to serve IIT Bombay community through this and create wealth is not the only goal but also social value so this was also part of our mission of course you know it is simple simple to say right but what exactly does it mean when I say that let's say social creation of social value also is a goal and how can sign facilitate that do I do something different for these companies than for the companies whose focus is to be successful economically and financially right so maybe this is a question that you can ask towards the end when you you know when sign people are here and talk about this okay so this is our broad model we said that we three you know focus areas the of course the the economic and wealth creation is a generally understood goal of any business organization but we said that being a technology Institute where lot of you know strategic research is also done and useful to the government organizations in R&D and and defense and so many services we thought that we'll also undertake strategic companies companies which do work in the strategic area which will be of importance to the government organizations with the focus being on technology so wealth creation is not the focus here and the social as is the third dimension of our incubation model so we have had companies in all the three cases with different probably levels of success but we need to also understand the constraints that they face so for example why strategic companies cannot generate wealth or why social companies can also not generate wealth these are some of the point that we need to understand and what really distinguishes between these three different categories so so these are broadly our policies and probably are familiar with some of these so we now take proposals only from faculty and our alumni we had a big debate initially because during our pilot lot of companies came from students who were still studying here so one of the issue that we had to resolve immediately was can you have a company when you are still studying and can you really do a justice to both your academic commitments and to your organization so I still remember a class when I used to have a couple of CEOs and CTOs in my class and they were still in third year and it was very hard to you know ensure that they they they are not de-focusing themselves from studies they were naturally good students and later on when I became dean of academic program so the first issue that I needed to address because I was now looking after not not my not the sign at that time but I was after the academic commitments of the students so we made a provision in fact and also some kind of a policy that if you are a student studying you cannot have a commitment to a company maybe you should take a break then take a break and do justice to your you know entrepreneurship initiative come back and do your remaining studies okay the consideration model was an equity model and also a revenue sharing model in fact we've we've felt when we started receiving the business proposals from our community there were different types of projects coming up and some some had you know a time plan of generating revenue and profits which might go over three years four years some had some had a few some had done the feasibility but product development was yet to be done fully so the gestation period before you start earning a revenue and profit could be substantially different from company to company so do you do you just have only equity based model or is it a good idea to do revenue sharing also so when when I looked up was looking after the sign setup we devised a model which is taking both we might have a combination of equity and revenue sharing because there were some proposals which were planning to have a very early revenue right and where the the promoter may not want to give a large equity to sign in fact you know we have to understand you know this from the market you know scenario what kind of equity you should take so let's say I mentioned you 3070 model now do you really take 3070 in the equity that probably no no venture will ever succeed if somebody demands a 30% equity on day 1 now in order to understand how much equity IIT should take you have to really understand the role of technology in entrepreneurship activity or a role of product or a role of research in a entrepreneurship activity so what does the research or prototype that I have developed how does how much does it contribute towards the success of a company if I this was a very important question to answer in order to arrive at the level of equity that IIT should demand from these companies because I am transferring the intellectual property and I need to take equity for that so should it be 5% should it be 30% should it be 15% and that is where you have to get some market inputs and you need to talk to you know market leaders or industry people or even VCs to understand these equations and what we felt is that the idea itself the product idea really does not contribute to a success more than 10 to 15% there is much more that is needed than just the basic core idea that you will build a product but then you need to know you need to define the manufacturing environment for that marketing sales etc these are the other bigger challenges and therefore assuming that it is 10 10% to 15% we said equity should be into 15% of 30% share that IIT has in any you know sharing so since IIT has a 30 70 sharing and of that 30 the contribution towards success is only 10% of that therefore IIT should take 3 to 4% equity in any company for an IP so this is what we arrived at but of course there are other components that I said before that besides the intellectual property you have the infrastructure you have also the mentoring so for this you may take additional equity so our model worked out equity in the range of 3 to 8% right for depending on you know the how much of support we can provide and revenue sharing naturally can be looked upon as a way of reducing the equity component so there were companies who had you know who imagined that their companies will be highly successful maybe something like Google or Yahoo in future and naturally nobody will give you 78% of equity in such companies so there were people who are willing to share either revenue or investments coming into the company for the equity so we have actually had cases where we took as little as 1% equity and as high as 8% equity in some of the cases so duration how long can it naturally revenue means let's say I I I have a product ready right and I expect that maybe after one year my marketing and sales will be in place and let's say I'll earn 1 crore revenue right in the first year of my operations or second year of my operations so you take a part of that in place of equity so I may say that instead of taking 8% equity I will take say 5% equity and 1% of revenue right for certain number of years yeah it's not perpetual so in most cases we had restricted revenue sharing for say 2 to 3 years so duration we said will be okay we have those some exit options there right see that is another problem with any incubator is that I hold equity against the infrastructure the infrastructure has a tangible cost equity has no tangible price or value till I find a buyer for that or there is a trading and I can sell off that equity so there is always a risk associated and considering the high failure rates in any new entrepreneurship you are really taking a risk okay in taking equity only therefore we thought that wherever possible we'll have less equity and more revenue depending on our assessment of the risk associated with that but of course this has to be in discussion with the promoter this I think was a very important point we needed to arrive at percentages which would appeal to entrepreneurs right who will find it appropriate you know for their risks that they themselves are going to take because it's you know look at it from the entrepreneurs point of view he has an idea and he comes to you he is willing to share some equity but there is still some much more that he needs he needs for example funding and there would be challenges of building his team on day one in an environment like IIT the team you have is really only technical team you know on on day one you don't have people with marketing and sales experience or experience in business development so on day one actually all teams are or all proposals are weak in that respect unless they have some tie up with somebody outside right so you make a proposal with some people in IIT and some people from external world these may be alumni or these may be other industry people so so based on this we make an assessment of the proposal and you decide on the level of equity and revenue sharing and okay then the duration we said should not be more than three years in any case because you must become profitable or you must know where you are going in the in three years otherwise you know in the in the comfort of incubator where costs are minimum and you are provided with ready infrastructure we tend to become you know complacent because your running costs are very low you know most of our companies you know they their burning rate as we call is not more than a few lakh rupees a month in fact if they have three four people mostly their own friends in that case the salary component is really very small and therefore they become comfortable and and the pressures of going out and selling and getting revenue keeps reducing and many of the companies I saw this attitude which is typical of a lab attitude you know so let's keep adding more and more features to the product or more and more you know engineering and therefore you keep postponing in fact the approach taken outside is exactly opposite of what we do in a incubator which are coming from educational institute there in fact they will start with the seed marketing so if you are let's say trying to come up with a soap or something you say let me buys from somewhere let it get manufactured somewhere else let me first create a brand and a market whereas here our approach is let's build a product spend time in validating that product and and then since we all come from an engineering research background we are tempted by constantly comparing it to 10 products in the market and making it better than them so this battle never ends and therefore we need to put some on them to say that you have to get out three years is the maximum time in fact first major review happens after 18 months and there are milestones which are defined that is a part of our monitoring policy that we have put in place when we admit somebody there are number of agreements which are signed with them not just the equity agreement which defines the infrastructure and other thing but also thus the facilities agreement the agreement for tenure in the in the incubator and the requirements of constant monitoring and milestones to be achieved are also part of that those agreements legal relationship we have this various contractual agreements we also had some corpus available for giving loans because this money came from the Department of Science and Technology and we said we can give some loans to the companies on day one although there are very few takers for this because you know most of us come from middle-class families and you know loan we are ours to any loan and therefore I will rather spend my own limited money or not take salaries and now do the development and other thing because you are generally staying on campus or your friends on campus your day-to-day requirements are taken care of these are again some of the comforts which are really not very appropriate or correct in the context of entrepreneurship and we found that there are very few takers for loans and although these were almost interest-free loans the alumni grant came for the facility which is here available on the top floor whereas the Institute created the infrastructure in a separate building right and there was no cash which was given by any alumni or by Institute for supporting the companies it's only in terms of facility so the loan component was supported primarily through the DST grant no in fact that I don't think this is repayable to the DST yeah I think but you can get more details because this is this is expected to become a corpus and we probably should you know build further today I was discussing my registrar about this I mean what should be the arrangement for these yeah I think the first at least the first component was not refundable which by the Institute need not pay back to the DST but of course the companies have to pay back because you want to roll it further thank you sir okay then we had benchmarks for graduation and exit you need to have very clearly defined exit policies exit policies not only for the company to exit but also exits for the your equity our equity agreement which probably the sign people will discuss in more details has you know all the required consideration so for example if the sign is holding the equity what are the stages at which it can exit right and exit may be you know partial may be complete it may be when you are profitable or it may be when some venture funding is coming into the company so all those all those are covered in the agreements so which we set up these facilities and there were some facilities which were given to companies specifically and some which were shared like the office infrastructure and so on we then also had this network of mentors sign has a board and the board has a distinguished people from the industry and alumni so this this became available for mentoring the various companies plus we also now answering your question also created a network of not really net with us we have some on the panel lawyers and accountants who can provide this various services they have been impaneled by sign and for basic services they are free but specific services will be on a charge basis and the company will directly pay these agencies at the predefined rate but at least you know the come all the companies were made aware of the various obligations for forming their companies everybody has to form a private limited company and they have to register with the ROC register of companies you have to have your own CA and then in all the agreements we have defined that they have to submit their annual account statements and so on so all these are very you know we educate every applicant about these requirements really this really didn't materialize we thought we will set up a seed fund and the purpose of the seed fund would be to give some kind of a cash you know to the to the applicants now really you know you need to define how this will be given it may be given for the equity right so I give funds fund could be a loan right as mentioned earlier the fund could be in place of equity so I give let's say I do some valuation and take additional equity and give money to the entrepreneur so that he can carry on his development and business activities or it could be an outright grant in fact DST has these three mechanisms available and they gave us the money it was our decision to use primarily as a loan because we felt more comfortable with that right because loan is something where you have you feel it will come back right in fact but that also was the reason that people don't like loan and I would like to take it as a equity and we found that equity is something which government doesn't understand properly right so if they say you are giving 10 lakh rupees loan then take equity worth 10 lakh now that is not possible because on day one and the company has entire equity of one lakh so naturally at face value nobody will give the equity to the government and valuations are not easy to define and therefore it was not very easy to fund the companies through the equity route initially later on you know we had number of meetings with the DST people and we tried to create a model through which the equity route also became available and in fact some companies did receive including my company we did receive funding from DST which was in terms of equity they took equity and in order to conclude this you have to do some kind of a valuation so you say my share with face value of rupees 10 at what price will I give it to let's say whoever is bringing the money in fact most of our companies have got little funds from either angel investors as we call them or people who have some money and wants to put in your idea and so sign created some kind of a benchmark for valuation in terms of the cost of infrastructure and the cost of services so for example if I incubate a company X for three years at let's say 6% equity stake in them in three years what is the cost to me to sign let's say that cost comes out to be say 25 lakh rupees because ultimately you know I am subsidizing a lot so what is the cost of that subsidy that I offer to the company so I say now if my subsidy costs me 25 lakh rupees for 6% equity what is the value of your equity and then we use that as a baseline for valuation and in fact DST has taken that in some cases so for example in some cases a 10 rupees share because of science participation and science infrastructure was valued as much as 2000 rupees per share because of the equity base being small and things like that so so in some but that was the basis that you know what is the science equity and what is the science cost for supporting the incubator for that time and based on that had a pricing model and that pricing model was used for taking additional equity through which some money can be made available to the companies they just wanted to talk about some of the ventures which are there right now for example you know it's actually good to see how they relate to the faculty's work and how faculty proposed companies based on their work so gram plus plus for example is a product GIS product which was developed in CSRE our department here and it was done through a government grant almost the entire development was done through DST projects so before they wanted to before they could incubate naturally they have to it was a intellectual property shared between IIT and DST so DST had to give a go ahead and there was a lot of time taken by DST as well as IIT to sort out the IP related issues once the IP related issues were sorted out and the DST allowed the company to build you know their further product line based on the gram plus plus product they were incubated right and today they are doing I think reasonably well they they have a model they have some further developments and they have a few customers who are using this product in fact this is my own company which which primarily works in the collaboration space where people can collaborate online with each other in whichever domain you know you may be in a research domain or you may be in marketing domain we all work together and collaborate so this software allows you to work together and also does all the information management knowledge management interaction management somewhat better that is what we claim somewhat better than what the other tools do right now that proof of whether it is really better or not is where the market will test it out we have we have been incubating in sign for two and half years this is what our product does so you can see that collaboration has number of components and probably our product is one which handles all the stages of any collaboration right from creating and collecting information collaborating and discussing it among your group and further consolidating it in for consolidating it for final sharing and reporting okay so let me skip this so so when I now look back on what I have been doing in sign and so and you I just said that we have been there for more than little more than two years we did have some funding from various sources but funding which will which allowed us only to work on a shoestring budget level for two years so where are we and what were the challenges that we were facing understanding the market is probably one of the biggest challenge you know you you are excited by a product you say oh I have a good collaboration product but really that that is the least important when you know when you go out to the market you know who is your market what do they buy what are the prices at which level they buy right so all these things are important how will you reach out to them how will you position your product how will you differentiate it with others right who what is the team you have in fact many of the sign failure we did have some problem cases and many of them were because of a bad team you don't you know one individual cannot do in fact the faculty cannot give more than 25 percent officially just one day a week of course unofficially you may give all seven days but issue is that one or two people cannot really form a company and make it successful this is the biggest challenge getting a right kind of a group which will address all aspects of a company not just the product development marketing sales you know technology and all those aspects understand the growth and sustainable challenges these these where the challenges and you know difficulties that any incubator faces not only at the beginning but even after two years like what we are constantly going through as a my company and talk about so so we then build this ecosystem further after creating the sign and we have number of other initiatives that we thought will enhance the incubation activities further there are number of events that we conduct which make students and faculty aware of these we are also trying at least I was trying that and we had met a few individuals to create a separate seed fund not under the government of DST umbrella but something which will have which will have you know more flexible rules and we had talked to state bank for example and it was almost set up but there are number of again rules and procedures which come in the way government rules so let's say you want to create a seed fund which will invest in these companies should it be registered with SEBI you know SEBI is an organization which handles all equity related investments so it really needed a lot of work both on our side and on the state bank side to get the picture clear whether to go ahead with creating that kind of a seed fund then there are other legal issues should it be under some trust will sign manage it will SBI manage it number of these problems do come up we did create a panel of mentors we invited number of industry experts to take up mentorship of these companies to tell them what are the strategic issues that they need to address not just the product focus but how to you know grow beyond certain point and we asked these people to take up certain specific companies of their interest and have a one to one kind of a mentorship over a long period of time and that did happen in some cases very fruitfully yes we have a model instead we defined a model for mentorship again in terms of equity and we said that let the mentor commit a certain fixed time per month and let us also let's also define the role he will play and the value he will bring and then we said we can have some kind of equity model let's say something like half a percent for six months or some such thing and so that that model was quite helpful because you know if sign defines it but he doesn't have to negotiate it again and again right so so that was a good thing and therefore we could straight away approach them again IIT is you know name helped us because we are well networked and we have a lot of alumni and they they felt that they would they can add a lot of value through this so this was quite successful actually and I hope sign will continue doing it further and and the relationships that half a percent it came out of science percentage or this was additional that came that the entrepreneurs gave to the the mentors the the entrepreneurs gave no it did not come out from science equity it has to be from the entrepreneurs equity in addition in addition and the the standard sort of relationship it what sign defined was just a time commitment or did sign also define sort of very specific it gives some guidelines it gives some guidelines right these guidelines could be you know for very specific type of activity and it could be in terms of specific commitment because some people might be able to give me a day a week but there are some senior other people who may not be able to give more than a half a day a month and they might come and attend only board meetings and they might help you only at strategic level or at networking you networking you with another industry player where you can probably do a pilot of your product and things like that so they brought value from that sense so the percentages were defined and the time was defined only as a model and you need to find unit on a case by case basis but you had a model to start with that was a good thing broker type fees with either mentors or other people who were able to set up deals with investors things like that I didn't get the broker fees like if if somebody was able to fix a deal or fix a meeting with a VC or an angel who put money in did did that person end up taking some percent actually in I don't think such cases have happened so basically what you're saying is let's say I have a mentor and he helps me in getting a VC funding I'm not aware but I think probably again it would be case by case basis but but it's definitely not part of the science model and then we have some formal I think any and under which this workshop is being conducted and we have relationships with tie and so on so these these are again very helpful kind of association that sign has for for facilitating entrepreneurship okay pre incubation was something we thought see people people were excited with entrepreneurship idea so I have a I have project in which my student has done something I have done something they want to apply to the sign for incubation but they do not have all the data which is necessary see first they have to do market survey they have to understand the state of art in the in the market today with respect to that segment they have to also work out some kind of business plan they may also need to develop their product further so in order to help them in doing all this we created a pre incubation initiative where sign will act as a mentor to the faculty or the student to further enhance their idea or to collect the required data so that a good business plan can be made so it can be it can be let's say some little bit of funding that sign may give let's say a 2 lakh rupees to me through which I may hire one programmer or somebody who will further develop it and bring to a stage where I can do better feasibility and better you know evaluation of that or it could be somebody who will do a simple research for say copyright or patenting purpose is there something already there or who will go to the market and do some background study it was simply to facilitate the person's position with respect to his readiness for applying to sign so we try I don't think we had too many there because I think the institute already has enough research and other facilities through which these things can be done it's for example I can get enough number of master students PhD students and many of us have research grants through which I can essentially do what we were planning to do through pre incubation but we thought it might be useful to students I think one or two student groups were held because they don't have access to resources and we thought we could support them and bring them to a stage where their idea can be considered for incubation oh yes in fact there can be drop-out in fact that also see drop-out is not a bad idea at least I know that I should not go further right and not waste time yes it does help that's why even our restriction of 2 to 3 years and asking them to do early exit is also beneficial both to entrepreneur and to the incubator right so if something is not going anywhere it's better to stop that and look at other alternatives same rules there are no different rules for let's say equity model or any such thing in fact there is really we don't distinguish from where the application has come yes he can student can apply for a leave and it can be granted and see postgraduate is anyway very short duration 2 year program and PhD students rarely think of entrepreneurship right they are very focused on their research work so it's really the undergraduate students who get excited by this and in fact most of our proposals have come from undergraduate students you know and I think nowadays of course there are hardly any proposals from students who are studying earlier we had some proposals and then we had some difficulties also therefore that framework was put up and either you take a break or you do it after finishing your studies I think that has become quite well accepted now we have that facility also so we have now a sabbatical that we give also for incubation usually you have a sabbatical once in six years right based on your just service now we said that you can now have a sabbatical based on you know your entrepreneurship and which can come anytime right so in the in the bucket of six years I used to take it at after six years now I can take it anytime right and that that because I cannot wait for six years to get over till I do my entrepreneurship so we we permitted that we actually changed our policy at the institute level to encourage people to take sabbatical for and during that period practically he's on the payroll of the institute yes sabbatical as its own rules so you you get full pay okay thank you very much