Mumbai Based Activitas Lends a Helping Hand to Startups

28th Mar 2012
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Activitas aims to be an integral part of the value creation process at emerging organizations. Their services are geared towards helping dynamic entrepreneurs navigate through the typical challenges by formulating innovative and customized solutions to ensure the sustainability of a business. Activitas specializes in 4 categories of services- Strategic Consulting, Tax Solutions, Financial Advisory, and Family Office.

They have a transparent time based fee model, which they share with the client in the first meeting itself. They operate on either a Retainership or Consulting model.

Based out of Mumbai, Activitas came into operation in April 2011. Currently, the company is 5 people strong. They are a team of energetic and committed professionals, having worked extensively in the fields of finance, tax and legal compliance, with a combined work experience of 36 years.

“As a young organization, we understand the problems which are encountered on a daily basis by the SMEs and partner with these organizations in their growth strategy. We understand the potential of such companies and provide them services suited to their needs right from strategic consulting at the board level to H.R. solutions,” says Co-Founder, Rohit Bhagwat.

Activitas is currently associated with 3 innovation foundations- SINE – IIT, Indian Angel Network and Mumbai Angels. Activitas has associated itself with such foundations with the objective to share its experience and provide incremental value to the entrepreneurs.

Market Size and Typical Challenges of Startups:

In a year, about 30-40 start-ups approach Activitas. Their main target customers are SMEs; services with respect to funding are the most sought after services.


Rohit tells us more about his target audience:

"As startups, this is one of the main problems which are faced by the SMEs. A substantial portion of the SME sector may not have the security required for conventional collateral based bank lending, or high enough returns to attract formal venture capitalists and other risk investors. In addition, markets may be characterized by deficient information, limiting the effectiveness of financial statement-based lending and credit scoring. This has led to claims of an "SME finance gap" – particularly in emerging economies. Also, structuring the entire business is something that SMEs are not aware of. We, taking into consideration our experience and networking, help these SMEs in getting the right kind of funding from the right partner and help them in growing their revenues through different direct and indirect channels. The next most important service is compliance with a plethora of compliances under various laws in India. While not every small business turns into a multinational, they all face the same issue in their early days – finding the money to enable them to start and build up the business and test their product or service."

The top 3 challenges faced by MSMEs in India today, are manpower issues, rising operating costs and access to financing.

The most important reason, which causes these challenges, is the regulatory environment in our country wherein the processes make these MSMEs handicapped. Although it has become much easier to start a business, the number of procedures to start a business has actually increased. The implementation of twin tax policy initiatives in India – the Direct Tax Code (DTC) and Goods and Service Tax (GST) would be significant in removing the current complexities and bringing simplicity, efficiency and greater certainty in the tax laws for business in general and MSMEs in particular.

Even a business with annual gross receipts of Rs 60 lakhs, which is very low in the current inflationary scenario, has to comply with the same regulations of Tax Audit, TDS, VAT Audit etc. as any other bigger organization. The limit was set at Rs 40 lakhs in the year 1985, and revised upward only once in 2011. Hence, considering the current inflationary scenario, the government should take measures so as to increase the current turnover limit, particularly for MSMEs so that they are relieved of some of the tax compliances.

Background of the founders:

An MBA from IIM-Ahmedabad, Amol Manjrekar has 14 years of work experience in financial markets, having worked with firms like JPMorgan and PricewaterhouseCoopers in the U.S., Europe and Asia. He has been an active institutional investor in public and private markets and is also a Chartered Accountant, CPA and CFA charter holder.

Rohit Bhagwat is a Company Secretary and an MBA in Finance. He has 10 years of work experience in organizations like Warburg Pincus (as CFO India), General Atlantic (as CFO India), and Deloitte Consulting with expertise in financial analysis, international reporting and compliance procedures. He has deep domain knowledge in setting up and winding up of special corporate structures.

Chintan Shah has been a practicing Chartered Accountant for the last 12 years, handling audit and taxation services for listed corporates, LLPs, senior professionals from the Private Equity industry and HNIs. He has also been actively advising family managed businesses and MSMEs on their growth plans and succession matters.

Activitas was self-funded and had its own set of initial hurdles. “Deciding on the revenue model for start ups, wherein we need to charge the clients keeping into consideration the affordability of the client, was a challenge. Also, whether to approach start ups directly v/s approaching them through angel networks or incubators was something we took time to decide upon,” concludes Rohit.

To find out more about Activitas, visit http://activitas.co.in/

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