Module 5

Mobilizing Resources for Start-Ups &

Intellectual Property Rights for Entrepreneurs
-------Prof. Anwesha Mukherjee
Management Department, SNU

MOBILIZING RESOURCES FOR START-UPS

What is a Start-Up?
A start-up is a young company founded to develop a unique product or service, bring it to
market, and scale it rapidly. Start-ups are typically characterized by innovation, scalability,
high growth potential, and significant risk. They differ from traditional small businesses in
their intent to disrupt markets or create entirely new ones.
Types of Start-Ups
Start-ups can be broadly classified based on their growth trajectory, industry focus, and
funding model:

A. Based on Scale & Growth Trajectory

Type Description Example

Lifestyle Start- Built to support the founder's lifestyle; Freelance platforms, niche
Up moderate growth blogs

Small Business Local market focus; traditional business Local restaurant, boutique
Start-Up model

Scalable Start- Aims for rapid, exponential growth with Uber, Airbnb
Up VC funding

Buyable Start- Created with the goal of being acquired Instagram (acquired by
Up by a larger company Meta)

Social Start-Up Solves social/environmental problems; Grameen Bank, Barefoot

profit secondary College

Large Company Innovation unit within an established Google X, Amazon Lab126

Start-Up corporation
B. Based on Technology & Industry
• FinTech Start-Ups – Financial services using technology (e.g., Paytm, Razorpay)
• HealthTech Start-Ups – Digital healthcare solutions (e.g., Practo, 1mg)
• EdTech Start-Ups – Technology-driven education platforms (e.g., BYJU'S,
Unacademy)
• AgriTech Start-Ups – Technology for agriculture (e.g., AgroStar, DeHaat)
• Deep Tech Start-Ups – AI, ML, Blockchain, Robotics (e.g., Niramai, SigTuple)

C. Based on Funding Model

• Bootstrapped Start-Ups – Self-funded by founders
• Angel-Funded Start-Ups – Funded by individual high-net-worth investors
• Venture Capital (VC) Funded – Backed by institutional investment funds
• Government-Supported Start-Ups – Under schemes like Startup India, MUDRA

Mobilizing Resources for Start-Ups

Resource mobilization refers to the process of identifying, attracting, and utilizing resources
needed to launch and grow a start-up. Resources can be classified into financial, human,
physical, and informational categories.

A. Financial Resources
• Bootstrapping / Self-Financing – Using personal savings or revenue generated
• Friends & Family – Informal loans or equity stakes
• Angel Investors – High-net-worth individuals who invest in early-stage start-ups in
exchange for equity
• Venture Capital (VC) – Professional firms investing in high-growth potential start-ups
• Crowdfunding – Raising small amounts from a large number of people (Kickstarter,
Ketto)
• Bank Loans & NBFCs – Traditional debt financing
• Government Grants & Schemes – Startup India Seed Fund, SIDBI, BIRAC
• IPO (Initial Public Offering) – Listing on stock exchange for later-stage companies

B. Human Resources
• Co-founders and core team with complementary skills
• Advisors and Mentors from the industry
• Interns and part-time employees to reduce costs
• Freelancers and gig workers for specific projects
C. Physical & Infrastructure Resources
• Incubators – Provide workspace, mentoring, and networking (e.g., T-Hub, NSRCEL)
• Accelerators – Time-bound programs offering funding and mentoring (e.g., Y
Combinator, Sequoia Surge)
• Co-working spaces – Shared offices (e.g., WeWork, 91Springboard)
• Technology infrastructure – Cloud platforms (AWS, Azure), open-source tools

Common Mistakes / Problems Faced by Start-Ups

1. No Market Need
Building a product without validating that the market actually wants it. This is the #1
reason start-ups fail (cited in ~42% of failures).
2. Running Out of Cash
Poor financial planning, excessive spending, or inability to raise follow-on funding leads
to premature closure.
3. Wrong Team
Lack of complementary skills, founder conflicts, or absence of domain expertise cripples
execution.
4. Poor Business Model
Unclear revenue streams, pricing mistakes, or inability to monetize leads to
unsustainability.
5. Ignoring Competition
Underestimating existing or new competitors leads to loss of market share.
6. Weak Marketing
Building a great product but failing to communicate its value proposition to target
customers.
7. Premature Scaling
Expanding too quickly before achieving product-market fit leads to resource burnout.
8. Legal & Compliance Neglect
Ignoring IPR protection, regulatory compliance, and proper incorporation causes future
disputes.
9. No Mentorship
Founders operating in isolation without industry guidance miss crucial insights.
10. Poor Customer Focus
Ignoring feedback loops and not iterating based on customer needs leads to product
irrelevance.

INTELLECTUAL PROPERTY RIGHTS & THE ENTREPRENEUR

  What is Intellectual Property (IP)?
Intellectual Property refers to creations of the mind — inventions, literary and artistic works,
designs, symbols, names, and images used in commerce. IP rights give creators exclusive
legal rights over their creations for a defined period, enabling them to benefit commercially
from their work.
IPR - Legal rights granted to creators and inventors to protect their intangible assets —
ensuring that originators have the exclusive right to use and commercialize their
creations.

For entrepreneurs, IPR is a critical business asset. Strong IP protection:

• Creates competitive advantage and barriers to entry
• Enables licensing and revenue generation
• Attracts investors (IP-rich companies are more fundable)
• Prevents competitors from copying innovations

 Patents- A patent is an exclusive right granted by the government to an inventor for a

new, useful, and non-obvious invention, for a limited period (usually 20 years), in
exchange for public disclosure of the invention.

Types of Patents
• Utility Patent – Covers new processes, machines, compositions, or improvements
(most common)
• Design Patent – Protects the unique visual characteristics/ornamental design of a
product
• Plant Patent – Granted for the invention or discovery of a distinct new plant variety
Criteria for Patentability
• Novelty – The invention must be new and not previously disclosed
• Non-Obviousness – It should not be obvious to a person skilled in the field
• Industrial Applicability – It must be capable of being manufactured or used
industrially
• Enablement – The inventor must fully describe the invention in the patent application

Patent Process in India (under the Patents Act, 1970)

1. Conduct a prior art search (to ensure novelty)
2. File a patent application at the Indian Patent Office (IPO)
3. Publication of the application after 18 months
4. Examination of the patent application
5. Grant of patent (if all criteria are met)
Relevance for Entrepreneurs
• Prevents competitors from copying the core innovation
• Can be licensed to others for royalty income
• Increases company valuation for investor negotiations
• Patents in India can be filed via the Indian Patent Office portal ([Link])

 Trademarks
A trademark is a sign, symbol, word, phrase, design, or combination that identifies
and distinguishes the goods or services of one enterprise from those of others.
Registered in India under the Trade Marks Act, 1999.

What Can Be Trademarked?

• Brand names and logos (e.g., Nike's swoosh, Apple's bitten apple)
• Slogans and taglines (e.g., 'Just Do It')
• Colours (e.g., Cadbury's purple)
• Sounds (e.g., Nokia ringtone, MGM lion roar)
• Trade dress (overall commercial image of a product)

Duration & Renewal

A trademark is initially registered for 10 years and can be renewed indefinitely every 10
years, making it perpetually protectable unlike patents or copyrights.

Types of Trademarks
• Word Mark – Text-based (e.g., 'Google')
• Device Mark – Logo or image-based
• Composite Mark – Combination of word and device
• Certification Mark – Indicates a product meets a standard (e.g., ISI mark)
• Collective Mark – Used by members of a group/association

Importance for Entrepreneurs

• Protects brand identity and prevents brand dilution
• Builds consumer trust and loyalty
• Enables brand licensing and franchising
• Filing can be done online on the IP India Trademark portal

 Copyrights
Copyright is an automatic legal right granted to the creator of an original literary, artistic,
musical, or dramatic work. It protects the expression of ideas — not the ideas themselves.
Governed by the Copyright Act, 1957 in India.
Works Protected by Copyright
• Literary Works – Books, articles, computer programs, databases
• Artistic Works – Paintings, photographs, sculptures, architectural plans
• Musical Works – Compositions and lyrics
• Dramatic Works – Plays, scripts, choreography
• Cinematographic Films – Movies, documentaries
• Sound Recordings – Albums, podcasts

Duration of Copyright
• Author's lifetime + 60 years after death (for literary, artistic, musical, dramatic works)
• 60 years from publication (for films, sound recordings, broadcasts)
Relevance for Entrepreneurs
• Start-up websites, software code, app content, marketing materials are automatically
copyrighted
• Important to have copyright assignment clauses in employee/contractor agreements
• Prevents competitors from copying original content and creative works

 Geographical Indications (GI)

A GI is a sign used on products that have a specific geographical origin and possess
qualities, reputation, or characteristics essentially attributable to that origin. Governed
by the Geographical Indications of Goods (Registration & Protection) Act, 1999 in
India.
Examples of Indian GIs:
Product Origin Category

Darjeeling Tea West Bengal Agricultural

Kanchipuram Silk Tamil Nadu Handicraft

Basmati Rice North India Agricultural

Kolhapuri Chappal Maharashtra/Karnataka Handicraft

Alphonso Mango Ratnagiri, Maharashtra Agricultural

Mysore Sandalwood Soap Karnataka Manufactured

Importance of GI for Entrepreneurs

• Protects regional entrepreneurs from misuse of traditional product names
 • Creates premium pricing power (e.g., Darjeeling tea commands higher prices
globally)
• Promotes rural and artisanal businesses and preserves cultural heritage
• Prevents bio-piracy and misappropriation of traditional knowledge

 Biological Diversity & Entrepreneurs

The variety of life on Earth — including diversity within species, between species,
and of ecosystems. Governed in India by the Biological Diversity Act, 2002 (aligned
with the UN Convention on Biological Diversity, 1992).
Key Provisions of the Biological Diversity Act, 2002
• National Biodiversity Authority (NBA) – Apex body regulating access to biological
resources
• State Biodiversity Boards (SBBs) – Regulate access at the state level
• Biodiversity Management Committees (BMCs) – At the local/panchayat level,
documenting traditional knowledge
• People's Biodiversity Registers (PBRs) – Comprehensive records of local biological
resources and traditional knowledge

Relevance for Entrepreneurs in Bio-based Industries

• Pharmaceutical Entrepreneurs – Must obtain approval from NBA before using
biological resources for commercial research or patents
• Ayurvedic & Herbal Product Companies – Governed by access and benefit-sharing
(ABS) regulations
Agri-biotech Start-Ups – Must comply with Biodiversity Act before commercializing
plant varieties

COMPARISON: Types of IPR at a Glance

IPR Type What It Protects Duration Registration Key Law (India)

Patent Inventions & 20 years Mandatory Patents Act, 1970

processes

Trademark Brand identity, 10 yrs Mandatory Trade Marks Act,

logos (renewable) 1999

Copyright Creative Life + 60 years Automatic Copyright Act,

expressions (optional reg.) 1957
 GI Regional product 10 yrs Mandatory GI Act, 1999
quality (renewable)

Biodiversit Biological Ongoing ABS Agreement Biodiversity Act,

y resources & TK 2002

Questions:

5-Mark Questions

1. Define a start-up. How does it differ from a traditional small business?

2. What is a scalable start-up? Give two examples with justification.

3. List and briefly explain any five common mistakes made by start-up entrepreneurs.

4. What is bootstrapping? What are its advantages and disadvantages as a resource

mobilization strategy?

5. Explain the role of incubators and accelerators in supporting start-ups.

6. Define Intellectual Property Rights (IPR). Why are they important for entrepreneurs?

7. What is a patent? State the criteria for obtaining a patent in India.

8. Distinguish between a trademark and a copyright with suitable examples.

9. What is a Geographical Indication (GI)? Give three Indian examples and explain their
significance.

10. Write a short note on the Traditional Knowledge Digital Library (TKDL) and its
importance.

Long Answer / Essay Questions (10 Marks Each)

1 Discuss the various types of start-ups with examples. What factors determine the type of
start-up an entrepreneur should choose?

2 Elaborate on the different sources of financing available to a start-up. Which source

 would you recommend for a tech start-up at the seed stage and why?

3 Analyze the top ten mistakes made by start-up entrepreneurs. How can these mistakes be
avoided with proper planning?

4 Explain the process of resource mobilization for a start-up. What are the key resources
required and how can an entrepreneur effectively access them?

5 What is a patent? Explain the types of patents, the patentability criteria, and the step-by-
step process for filing a patent in India. Why should entrepreneurs protect their
inventions?

6 Define trademark and explain its types. Discuss the procedure for trademark registration
in India and the legal consequences of trademark infringement.

7 Compare and contrast patents, trademarks, and copyrights from an entrepreneur's

perspective. Include duration, what each protects, and relevance to start-ups.

8 Explain the importance of Geographical Indications (GIs) for Indian entrepreneurs. How
do GIs protect traditional industries and add economic value to regional products?

9 Write a comprehensive note on the Biological Diversity Act, 2002. How does it regulate
entrepreneurial activities in sectors like pharmaceuticals, biotechnology, and agriculture?

10 As a BBA graduate planning to launch a start-up in the Ayurvedic health products space,
what intellectual property considerations and Biodiversity Act compliance measures
would you undertake? Provide a detailed IPR strategy.