Reading Comprehension Passage: 27 | 100 RC`s for Government Exams Preparation - Bank Exams PDF Download

Directions: Read the following passage to answer the given questions based on it. Some words/phrases are printed in bold to help you locate them while answering some of the questions.
Over the last 15-20 years, while India has been primarily focused on "services", China started with “manufacturing” and then quickly extended its focus to “product” companies. As a result, in addition to being the manufacturing behemoth, China has also produced product brands like Lenovo, Huawei, ZTE, Xiaomi, Baidu, Alibaba, Spreadtrum, spanning hardware, software and e-commerce.
India desperately needs to create several high-value product companies to meet domestic demand and create wealth. A strong product ecosystem drives healthy manufacturing industry as well. As such, 'Make in India' shouldn’t be just about “manufacturing” but also be about “making products”.
Product-centric start-ups require totally different mindset and approach. They tend to take tens to hundreds of millions of dollars and five to ten years before reaching profitability. This is quite a contrast from “services” model that doesn’t require lot of capital and usually make small but quick returns. But, product companies create lot more value and wealth. We must create Apple, Google, Amazon, Intel, Oracle, Lenovo, Xiaomi, and Facebooks of the world.
In my view, successful start-ups require passionate and persuasive founders, great vision, innovative technology, strong team, patient capital, good market timing and a little bit of luck. India has no dearth of entrepreneurs, innovation, talent and markets. The biggest challenge for Indian start-ups today is lack of access to risk capital especially early to pre-revenue stage. This must be addressed quickly if we want to create high-value product growth engine.
Start-ups need different kinds and levels of capital through their life cycle, from conception to profitability. At the beginning, they need seed capital typically provided by founders and the so-called angel investors, ranging from $100,000 to US$1 million.
Then, start-ups need early stage investment from venture capitalists and corporate investors, ranging from $10 million to US$100 million through multiple rounds of equity financing.
They need late-stage capital from institutional investors, private equity firms and corporate investors to support revenue ramp, profitability and IPO, ranging in hundreds of millions of dollars through a combination of equity and debt financing. My perspective comes from my own experience with cofounding Soft Machines Inc, a semiconductor company developing advanced VISCTM Microprocessor architecture and System on Chip (SoC) solutions for smart client and cloud markets.
In India, at the moment, there seems to be a lot of appetite for participating in late-stage and mezzanine rounds by global investors such as Softbank, especially in the areas of e-commerce, social media and apps. Recent investments into Flipkart, Snapdeal, housing.com, are good examples. But, I see two issues with this trend. First, these are late-stage investments, for products are already proven in the market with some revenues and customer traction. Second, most of these investments are by global investors, which means return on these investments is not going to have domino effect on other start-ups. There also seem to be good number of angel investors, incubators and start-up villages to support very early and seed-stage capital. Of course, start-ups can benefit from more organized angel investors and government-driven grants along the lines of NSF and SBR grants in the US.