2015

2015

KERALA TECHNOLOGICAL UNIVERSITY

Student Startup Policy

 KERALA TECHNOLOGICAL UNIVERSITY

Student Startup Policy 2015

Kerala Technological University

CET Campus, Thiruvananthapuram
Kerala -695016 India
Phone +91 471 2598122, 2598422
Fax +91 471 2598522
Email: [email protected]
Table of Contents
INTRODUCTION ...................................................................... 1
Preamble......................................................................................... 1
GOVERNMENTAL POLICY ..................................................... 3
Vision .............................................................................................. 3
Salient Features in Governmental Policy ........................................ 3
KTU POLICY ............................................................................ 5
Academic Policy .............................................................................. 7
Activity Policy ................................................................................ 10
Financial Policy ............................................................................. 10
I N T R O D U C T I O N
Chapter

1
Preamble
Studying entrepreneurship without doing it is like studying the appreciation of music without
listening to it. Until you confront the fear and discomfort of being in the world and saying, "Here, I
made this," it's impossible to understand anything at all about what it means to be an entrepreneur.
- Seth Godin-

S
tanford and Berkeley Universities were instrumental in many Silicon Valley
startups. Columbia University opened the Lab, a co-working space for alumni
entrepreneurs. NYU is not alone in recognizing the need to nurture campus
entrepreneurship. In the process of creating entrepreneurship programs, American
universities have become more entrepreneurial themselves. Colleges and universities are
natural incubators of creativity and new ways of looking at things. This new reality means
that colleges and universities are better preparing students for success in the American
economy — where more professionals need to make their own jobs.

33.2% of all companies founded by immigrants in the US had an Indian co-founder, as

per to a study by Kauffman Foundation. This is because of the Indians
founding more technology and engineering firms than the next 9 immigrant groups
combined. The most talented immigrant community among Indians is considered to be
Keralites. The best youth of Kerala have been leaving the State in pursuit of better career
options, and many of them have become successful entrepreneurs outside the State. This
loss is irreparable in a Knowledge Economy where people and ideas are more important
than land or capital. To realize the true potential of Kerala, this ‘brain drain’ needs to be
reversed. This policy aims to create a world-class scientific and technology ecosystem that
would empower and enable its youth to pursue their dreams within the State.

The Kerala Technological University (KTU) aims to provide an ecosystem where the best
educated youth of the state can reach his/her maximum potential. Any society peaks
when a great number of its people have access to experiences that are in line with their life
goals and this requires development of increasingly complex skills. The necessity to
develop increasingly refined skills is what lies behind the evolution of culture. By
smoothly integrating the technological and creative skills of students to solve the
contemporary problems, the KTU aspires to kick-start an entrepreneurial culture, which
contributes to increased knowledge, wealth and employment.

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 I N T R O D U C T I O N

The existing rigidity in systems and cultural barriers that discourages experimentation by
moving out of the system needs to be changed. For example, an under graduate student is
unable to move laterally or horizontally to other courses without losing time. A similar
example is an academic or government employee, who is unable to take a break and
pursue his or her entrepreneurial instincts by leveraging the knowledge gained during the
work years. In fact, he or she should be encouraged to take a risk, and on failure should
be allowed to join back to the system.

In China, ‘‘entrepreneurship’’ is equated with business start-up, and the Ministry of

Education emphasized four goals for entrepreneurship education in China. Firstly, it
should expose students to the challenging prospect for employment and raise their
entrepreneurship awareness. Secondly, it should lay a solid foundation of knowledge on
entrepreneurship. Thirdly, it should improve college students’ entrepreneurial skills and
abilities through both classroom learning and beyond. Last, it should reduce
entrepreneurial risks among college students.

The young population of India creates a massive demographic dividend. For the next 40
years, the country would have a youthful, dynamic and productive workforce when the
rest of the world, including China, is aging. It is further estimated that the average age in
India by the year 2020 will be 29 years as against 40 years in the USA, 46 years in Europe
and 47 years in Japan. In fact, in 20 years the labor force in the industrialized world will
decline by 4%, in China by 5%, while in India it will increase by 32%.

The demographic dividend in Kerala will end sooner due to its aging population and
lower population growth and time is now to act decisively to reap the dividend. There is
further necessity to retain the youth within the state to support the aging population. To
employ all its youth, India will have to create 1 million new jobs every month for the next
20 years, and this is going to be created by new startups through entrepreneurship. The
globally well-known Kerala model of development of achieving high Human
Development Index (HDI) in an equitable manner has to now evolve into a new model
of creating knowledge, employment and wealth through innovation and entrepreneurship
and set an example for rest of the country. Kerala is the first and only state in the country
to have 1% of the State’s annual budget ear-marked for entrepreneurship development
activities. For leading the way, KTU is presenting this Student Startup Policy for its
student community.

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 G O V E R N M E N T A L P O L I C Y
Chapter

2
Vision

K
erala to emerge as the No.1 Destination in India for Startups and amongst the
top 5 startup ecosystems in the world.
Objectives:
The Government of Kerala proposes Startup Policy which aims to achieve the
following by year 2020;
 Attract Rs. 5,000 Crore in investments into the Incubation and Startup Ecosystem in
Kerala
 Provide Rs. 2500 Crore for youth entrepreneurship activities for the next five years
(1% of the annual State Budget)
 Create more numbers of Indian owned Global Technology companies based out of
Kerala
 Establish at least 10 Technology Business Incubators / Accelerators in each of the
different sectors in the State
 Encourage/Facilitate/Incubate at least 10,000 technology product startups
 Develop 1 million sq. ft of Incubation Space
 Facilitate Venture Capital funding of a minimum of Rs 2000 Cr
 Set the platform for creating at least one home grown billion dollar technology
company from the startups

Features in Govermental Policy

The Policy is split into nine key portions that are the strategic building blocks towards a
world-class startup ecosystem namely Infrastructure, Incubators and Accelerators,
Human Capital Development, Funding, State Support, Governance of Policy, Public
Private Partnership, Scaling Existing and Establishing New Incubators and Startup-
Bootup-Scaleup model for moving fast from ideas to IPO.

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 G O V E R N M E N T A L P O L I C Y

 Creation of Infrastructure: All Government owned IT Parks, Industrial Parks and

SME Clusters shall have incubation facility like plug and play incubation facilities in
different sectors and different locations within the state. Government will facilitate
successful entrepreneurs from the state to setup required high tech labs and testing
facilities. The Government will facilitate development of physical incubation
infrastructure in a Live-Work-Play mode through Public Private Partnerships. An
Incubation Infrastructure Development Fund will be constituted and a suitable
structure for operating the fund shall be evolved in consultation with all
stakeholders including Host Institutes of Incubators, Government, Industry and
Lenders. The Government will encourage Host Institution of existing Technology
Business Incubators (TBI’s) for expanding up their operations in the state to jump-
start the startup ecosystem. Innovation based incubators shall be set up in all
Institutions of Higher education in the State, Research Institutes and other Centers
of Excellence and these Institutes shall be networked through an e-platform hosted
by T-TBI. The Electronic Platform shall also function as a “Virtual Incubator” to
startups in all sectors connecting the research institutes, mentors, entrepreneurs
and all other stakeholders and shall act as an incubator without walls. Approval for
the Incubator and host institution by National Science and Technology Entrepreneur
Development Board, Department of Science and Technology, Government of India
or by Government of Kerala shall be a condition for availing this infrastructure
funding. In addition to the Incubation Facilities suchas R&D Labs, Office Spaces,
Small and Large Conference Rooms etc, the facility so created may have Small Office
Home Offices (SOHO), Hostels, Dormitories, 1-2-3 BHK’s, Office Spaces and other
modern amenities. The Government shall provide promotional support to these
incubators as needed.
 FABLABS: In order to promote education in hardware manufacturing and creating
prototypes of hardware products, two High End FABLABs from MIT (Boston, USA)
and Design Studio with international collaboration would be setup at Technopark
TBI and Startup Village. Government will further support mini-fablabs at other
educational institutions or incubators by giving support to the high end FABLABS for
creating derivative labs.
 Accelerator: The Government shall establish at least one world class Accelerator by
inviting global Accelerators to set up their programs in the state. The Government
will also support small incubators in multiple locations, by providing support and
space to bring in expertise and startups in the incubation centers through diverse
models. Government proposes to partner with world-class accelerators by
providing support and space to bring in international expertise. The Government
will closely monitor the progress of the initial batches/ groups in the Incubation
centers as these would seed the ecosystem which will fuel the subsequent batches.
 Human Capital Development: Inculcating the habit and embedding the idea of
innovation and entrepreneurship in the minds of citizens in every aspect of
economic activity is essential for promoting the culture of innovation. This needs to
be achieved through strong educational support to bring out innovators and
technopreneurs among the youth. The Government would work with universities,
educational institutions and the industry to provide pre-trained manpower in
emerging technologies and to foster a culture of entrepreneurship in all sectors.
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 G O V E R N M E N T A L P O L I C Y

 Startup Funding: The Government shall encourage the Banks and financial
institutions to enhance and extend their existing schemes of lending to the Startups
on convenient terms (eg., collateral-free lending, soft loans, interest free loans, etc).
Institutions like KFC shall be encouraged to promote schemes like CGTMSE of
Government of India and sufficient guarantees shall be provided to these financial
institutions to meet the NPA losses subject to a ceiling of 10% of the total loan
disbursed and outstanding. Private funds shall be encouraged to setup operations in
the state for funding startups. The Government may participate in SEBI-approved
early stage Venture Capital Funds, upto25% as Limited Partner. The Venture Capital
Fund so created shall invest primarily in startups located in Kerala, basing on its own
criteria.
 Exemptions: Startups would be exempt from inspections under the following Acts
and the Rules framed there under, barring inspections arising out of specific
complaints.
 The Factories Act 1948
 The Maternity Benefit Act 1961
 The Kerala Shops &Commercial Establishments Act 1960
 The Contract Labour (Regulations & Abolition) Act 1970
 The Payment of Wages Act, 1936
 The Minimum Wages Act 1948
 The Employment Exchanges (Compulsory Notification of Vacancies) Act 1959
 The incentives available in the State IT Policy 2012 would also be directly applicable
to the startups, Host Institute of Incubators and Accelerators are as follows:
 Reimbursement of VAT/ CST: Annual Reimbursement of VAT/CST paid in Kerala,
upto a maximum of Rs 50 lakhs turnover by incubated startup companies within a
period of first three years of being incubated.
 Financial Assistance as Matching Grants: The Government would match the funding
raised by the Incubator from Government of India on a 1:1 basis as matching grants
 Performance Linked Assistance – Government will assist the Host Institutes of
recognized incubators with an Operating Grant to be calculated based on number of
startups incubated in a year. A transparent scheme will be formulated and
announced.
 Support to Human Capital Development Programmes – To create an innovation
pipeline and entrepreneurial talent, Human Capital Development is envisaged under
this Policy under section 3. These programmes may be executed through the
recognized Incubators and 10% of the approved programme cost would be paid as
Programme Implementation and Monitoring Fee.
 Corporate Social Responsibility of PSU’s - In order to strengthen the startup
ecosystem in the state, CSR Funds of State PSU’s will be utilized to create corpus
funds at incubators in compliance with the New Companies Act 2013.
 Reimbursement of paid Stamp Duty and Registration Fee – Incubators and Host
Institutes shall be eligible for 100% reimbursement of the Stamp Duty and

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 G O V E R N M E N T A L P O L I C Y

Registration Fee paid on sale/ lease deeds on the firsttransaction and 50% thereof
on the second transaction
 Patent Filing Cost: The cost of filing and prosecution of patent application will be
reimbursed to the incubated startup companies subject to a limit of Rs. 2 lakh (0.2
million) per Indian patent awarded. For awarded foreign patents on a single subject
matter, upto Rs. 10 lakh (1 Million) would be reimbursed. The reimbursement will
be done in 3 stages, i.e., during filing, prosecution and award.

 Incubator Projects that has a capacity to create a minimum of 1000 startups in five
years will be deemed as nodal incubators and eligible for the following additional
benefits; In case of Government-owned buildings leased to technology incubators,
no lease rent or O&M charges will be levied for a period of five years or until the
incubator is self-sustainable, whichever is earlier. In case where private premises are
taken on lease / rent basis, a rental reimbursement @ Rs. 5 per sq.ft per month or
25% of the actual rent paid, whichever is less, shall be reimbursed for a period of 3
years. This shall be limited to the incubation space only.
 An investment subsidy of 20% of the value of the Capital Expenditure, other than
land and building, shall be provided to Incubator Projects that enter into a MoU with
the state within 2 years of notification of the Policy. This subsidy shall be limited to a
maximum of Rs. 5 Crores.
 Subsidies or monetary support given by different government departments, both
state and central, under their existing schemes for new units shall be in addition to
the above monetary support.
 Training Assistance: For every employee recruited by a startup within a period of
three years of incubation, an amount of Rs 25,000 per employee per year shall be
provided for training.
 Performance-linked grant for startups: Startups that record a year-on-year growth
rate of 15%, as per audited accounts, shall be eligible to get a grant of 5% on
Turnover, subject to a limit of Rs.10lacs within a period of three years from the date
of incubation.
 All monetary support for startups and incubators as mentioned in section 5 above
shall be administered by Technopark Technology Business Incubator (T-TBI). The
supports shall be provided in a time bound and transparent manner.

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K T U P O L I C Y
Chapter

3
K
TU will set up a policy incubator where various policies will be discussed,
debated and will be put under pilot testing mode; these policies will be related
to student startups in general and other similar areas. The policy incubator will
hold dialogues, discussions, and conferences to assemble wider perception and
learn from best practices. It shall then develop the next practices for student
entrepreneurship across state university systems. KTU’s startup policy aims at generating
10000 student startup ideas every year. KTU’s Policy aims to achieve the following by
year 2020;
 Create more numbers of Indian owned Global Technology companies based out of
Kerala
 Encourage/Facilitate/Incubate at least 1000 technology product startups
Out of these, the policy aims to help convert 1000 start-ups into proof of concept and
eventually, lead 100 of these student startups into successful and scalable enterprises. The
policy aims at encouraging enterprises, which serve social and economic needs.

Academic Policy
 The incubation policy will cover incubation facilities for all students and alumni,
irrespective of their streams.
 KTU will create indicators to measure and rank all the departments and colleges. The
Annual Student Start-up Index will put equal stress on process and output driven
indicators along with structures and outlay driven indicators. KTU will create an easily
understandable ranking system, including the Student Start-up Index, in accordance
with the accreditation systems in India and the world to help colleges to move
towards accreditation. This would include the work and the outcomes in student
start-ups/ faculty ventures, patent / IPR/ tech transfer, besides the usual academic
and outcome-based criteria. KTU will work with the institutions to build special
ecosystems at all the campuses.
 KTU will bring pedagogical interventions like permeating design thinking into the
entire syllabi of all its courses, and innovation and entrepreneurship programs in
practice mode. KTU will facilitate start-up processes by seamlessly integrating the
incubation value chain into the academic programs in order to have early exposure of
incubation value chain to potential student start-ups.
 A student or a Faculty Member will also be permitted to apply for approval of a
special elective, designed especially by the student or the Faculty Member. This will
permit the student-entrepreneurs of scalable start-ups to opt for special elective

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K T U P O L I C Y

subjects on innovation, entrepreneurship and/or other relevant subjects, as required

by these budding entrepreneurs.
 All the colleges under KTU should provide core infrastructure like 5000 sq. ft floor
area at their own colleges for entrepreneurship activity. Fully furnished and ready to
use Plug and Play Infrastructure along with Computers with not less than 100 MBPS
internet connectivity, electricity, water, security and other office facilities would be
provided as infrastructure support by the colleges to setup incubators. Enterprise
Software & shared hardware, individual accommodation, hostel rooms, common
facilities centers (Warehouses, Storage facilities QA/QC labs etc) should be provided
by the college. Common facilities such as testing labs, design studios, community
events and promotional support for incubators and startups etc. should be setup by
clusters of different colleges at Nodal Incubator Centers and to be shared by all
incubators. Each college can avail the services of successful entrepreneurs from the
state to setup required high tech labs and testing facilities. All colleges will be
encouraged to develop specified Common Minimum Infrastructure and host
Common Minimum Activities as specified by the University.
 Final year students of KTU will be required to take a practical problem applicable in
real life, and solve it as a part of academic curricula through their final year project.
The students, who have completed the best of such projects and who want to
convert their projects into products/services and want to set up start-ups, will be
supported through incubators at various colleges. The college should extend training
and basic facilities to help its innovators file patent applications.
 Patent Search and Analysis Report (PSAR) is introduced with the objective of
avoiding repetitive kind of projects. In this activity each student of 7th Semester
B.Tech is asked to study at least 5 patents related to his/ her project and has to
prepare Patent Search and Analysis Report (PSAR). Patent Drafting Exercise (PDE)
is introduced for students of final year B.Tech. Every team of students is asked to
draft provisional patent documents for their final year project considering its
Innovativeness & Patentability. All students are taught about provisional patent
drafting, filing procedure (for various patent filing forms), steps & fees and other
required details.
 Final Year students develop their projects usually in groups of 2-4 students from a
similar discipline. KTU will permit inter-disciplinary projects and such teams may
consist of students from more than one branch of Engineering. For such a project,
there will be a faculty Guide from each of the concerned departments and the guides
will work together to support the project.
 Students may be permitted to develop their ideas and their products at External
Incubators / companies, if these entities, have been certified by KTU. Wherever the
syllabi require the students to make presentations and/or give seminars, students may
be permitted to make their presentations at the Open House and present their project
seminars where they are working for their project. The mentors from Incubator /
Companies can act as an external project/thesis Guide. In such a case, the Incubators
/ Companies will be required to furnish full information about the project and the
students along with the names of the Mentors for the Project to the University, the
Principals of the Colleges and to the HODs in the Colleges, within three weeks of the
start of the semester.
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K T U P O L I C Y

 If a College wants to use some of the Massively Open On-line Courses (MOOCs) as
a part of the syllabus, Colleges will be advised to choose appropriate online courses
(MOOCs) as electives and apply to the University, under the existing academic
regulations. Student can choose various minor projects, MOOC based certification
programs, assignments in place of regular assignments in particular subjects, under
internal evaluation by a Faculty Member, assigned by the Principal of the College.
KTU will facilitate start-ups by its alumni (within normally 3 years of graduation).
 Alumni Startup candidates will be selected by the College on the basis of an intensive
review of each project submitted for this scheme. The selected candidate will be
required to function from a College Incubator on day-to-day basis and may be
required to mentor various start-up related programs for the College.
 Student Start-ups or Alumni startups (within 3 years of graduation), which have made
an extraordinary impact and which had an early stage connection with College
Incubator will be given suitable recognition/citation/awards for their achievements.
 KTU will create a collaborative online platform for linking student start-ups so that
they may be able to share their challenges, to link with suitable mentors and to
catalyze cross pollination of innovative ideas and to leverage complimentary resources
and skill sets.
 KTU permits the concept of Student Entrepreneur in Residence. Students will be
permitted to apply for grant of official leave of one year at a time for entrepreneurial
initiatives during their study. Outstanding students who wish to pursue
entrepreneurship can take a break of one year, after the second year, to pursue
entrepreneurship full time. Thus a student will be eligible for award of a 4-year degree
only if he is able to complete all the requirements of the degree within 6 years since
his joining the program of study. This period of six years will include the leave of
entrepreneurship. The necessity of the scheme is evident from the fact that even
though this can be done even now, our society is still not ready for facing failure. An
approved scheme by the University would allow the parents to be comfortable and
confident. The Gap Year facility ensures syllabus continuity at the time of joining
back and after an appraisal process by an incubator where the student is attached.
 A special scheme of faculty up-gradation is introduced. The Government would
support enhancing infrastructure at universities to train the faculty for promotion of
innovation. A pilot scheme shall be introduced for College or University professors
who work along with students at an incubator to move out and pursue
entrepreneurship for a specified time and on failure will be allowed to join back.
 Students are permitted to undertake their Industrial Seminar, Project Seminar and
Industrial Visit at State level Technology Business Incubators where the additional
facilities are being setup.
 In order to promote education in hardware manufacturing and creating prototypes of
hardware products, mini-fablabs at incubators should be provided by the college for
creating derivative labs as these are machines which can create more machines.
 Student entrepreneurs working on a startup idea even from the first year of college
may be permitted to convert their startup project as their final year project towards
degree completion. Mentors assigned by Incubators may be involved in the conduct

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K T U P O L I C Y

of Viva Voce. Project reports certified by the Incubators may be sent back to the
respective colleges for forwarding to university.

Activity Policy

 Every KTU program will dedicate a few hours of its academic time where students
and teachers will pursue certain activities for inculcating and strengthening the spirit
of entrepreneurship. Every week two hours are set apart for student activities
including entrepreneurship. The Colleges and the Departments will have a choice of
building such activities according to the local environment. But, the impact of every
activity/process will be required to be benchmarked by every college and its
departments, semester-wise.
 KTU will recommend to all its colleges to at least nurture ten student start-ups. Each
college will thus help at least one of their student start-ups to emerge, to grow and to
scale every year through the help of all the resources in its campus.
 KTU will continue to organize and continuously improve its practices in IPR to help
young start-ups in IPR related issues. University will create a network of attorneys
that will guide and help potential student patentees along with other private firms and
agents.
 College Level Entrepreneurship Development Clubs (Bootcamps) will be established
through incubators to foster innovation and entrepreneurial spirit at the school and
college levels.
 KTU will regularly host startup-related national level dialogues, workshops and
conferences to benchmark its own progress and help create futuristic policies and
action strategies to promote Innovation and student start-ups in Colleges.
 KTU will celebrate an annual “Entrepreneurship & Start-up Day” in all the College,
jointly with the annual Poster Exhibition for Final Year projects.
 KTU will provide common facilities for operations such as legal, accounting and
basic administration.
 KTU will also attempt to provide basic common minimum tools and facilities that a
good number of startups, if obtaining them for multiple users turn out to be cheaper
and on demand. These may include server space, online tools such as team
collaboration, etc.

Financial Policy
 KTU will set up its own fund or set up a fund with support from multiple
stakeholders and create Prototype Fund that will help very early-stage startups.

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KTU will financially support the individual college TBIs and student projects
based on merit within the availability of funds.
 KTU will also work with state banks and other financial institutions to set up a
student startup angel fund in suitable format. This will support the best spin offs
across campuses at university level in hassle free manner.
 KTU will create linkages with external angel networks, incubators, TBIs and help
link suitable spinoffs to them to help student start-ups wherever in need on a real
time basis.
 KTU will work with various venture and angel fund groups and governmental
institutions to help students obtain seed funding at their early stage of inception
when the students are found to have a Minimum Viable Product (MVP).

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