Define a 'start-up'. What are the sources of funds for a new venture?
A start-up is defined as an entity incorporated as a private limited company, partnership firm, or limited liability partnership. Its turnover should be less than INR 100 crores in any of the previous financial years. An entity is considered a start-up up to 10 years from the date of its incorporation. It should be working towards innovation or improvement of existing products, services, and processes, with the potential to generate employment and create wealth. An entity formed by splitting up or reconstruction of an existing business is not considered a start-up.
There are several sources of financing a new venture. Personal investment is the first source, where the entrepreneur invests his/her own money to demonstrate long-term commitment to bankers and investors.
Angel investors are wealthy individuals, often leaders in their fields, who invest money, ideas, and experience in promising ventures, usually financing the early stages of business.
Business incubators, also known as accelerators, support the high-tech sector through various development stages. They are often found in academic institutions, and the incubation phase generally lasts for two years.
Other sources include Government grants and subsidies, which are provided by agencies to promote business, Venture Capital, and Bank Loans.
Explanation
The answer defines a start-up based on the eligibility criteria provided in the text (incorporation type, turnover limit, age limit, and innovation focus) and lists the sources of funds explicitly mentioned in the context. The definition excludes entities formed by splitting up or reconstruction. The sources of funds are derived from the list mentioning 'seven sources' and the detailed descriptions provided in Box 3 and subsequent paragraphs for Personal investment, Angel investors, Business incubators, and Government grants.