The Government of India may exempt crowdfunding from the Companies Act to bring it under the regulatory authority of Securities and Exchange Board of India (SEBI.)
According to a news daily, two people with direct knowledge of discussions between the Corporate Affairs Ministry and SEBI, fundraising will be brought under the purview of SEBI to ease the way startups raise funding. The Government will be invoking Section 462 of the Companies Act which will give the Central Government the power to exempt class or classes of companies from the provisions of this act. However, this move requires the Parliament’s approval.
But, certain other sections of the Act stand as hurdles to this move as the Section 42 of the Companies Act limits the number of investors in a private entity to less than 50 at one go or 200 in a year. The companies, according to the section, will have to compulsorily make a public offer and list the securities on a recognized stock exchange if the number of investors is 200 or more in one year.
Crowdfunding uses social networks and internet platforms for fundraising attracting hundreds or thousands of donors who pay small amounts to fund a project. SEBI issued a warning against crowdfunding platforms in October last year calling them unauthorized, unregulated and illegal. However, in August 2017, SEBI tried to finalize norms for such platforms and even asked crowdfunding firms details about their businesses. The regulatory board further instructed such angel funds to exhibit a disclaimer that these platforms are neither stock exchanges nor authorized by the markets regulator to solicit investments.
As of September 2016, crowdfunding platforms in India raised close to $ 60 million in two years. With the unprecedented boom in the startup ecosystem, funding activity in the unlisted space has intensified. While the discussions between the market regulatores have begun, no concrete decision has been taken so far.
Leher Versus Clubhouse: Which Audio Listening Startup Would You Choose?
Clubhouse is a new type of social networking platform which is an audio only platform. This means every conversation takes place through audio where users speak to let their thoughts known. Users can create and host rooms where speakers will talk about a particular topic. Originating in the Silicon Valley, Clubhouse attracted some major names onto its platform like Elon Musk, Evan Williams, Reddit co founder Alexis Ohanian, former Y Combinator President Sam Altman, AngelList co founder Naval Ravikant, Ashton Kuthcer, Oprah Winfrey, Drake, Kevin Hart and many others are some of the influential personalities who are on Clubhouse. There is however a catch as Clubhouse is currently limited to iOS.
Leher is an Indian made alternative to Clubhouse and is a similar audio sharing and listening startup. Leher also has video support unlike Clubhouse and is also available for both Android and iOS. However, Leher does not have the biggest names in the world on its platform but it does have significant micro influencers and is growing at a rapid pace. Within 180 days of its beta version launch, the company claimed to have its users spend about 44 minutes every day and 250,000 minutes per month for live video sessions.
We at Startup Stories are curious to see which among Leher or Clubhouse would our readers choose to take part in a virtual discussion. Please let us know your answer in the poll below.
Why Are Ads On Digital Media Failing To Reach The Right Audience?
If you are a regular user of social media platforms and also a fan of consuming content on the digital medium, then there is a very high likelihood that you have seen ads on pages you are reading or watching something. There would be times when you have been targeted by an ad which feels like it was wrongly targeted at you. Imagine if you are a vegetarian by choice and while browsing online, if you are targeted by a food delivery app which shows ads about chicken dishes. The ad would only serve to spoil the mood of the online user instead of serving its actual purpose which is to push the user to buy a chicken dish.
These wrongly targeted ads might be the side effects of performance marketing or a weak brand marketing. Performance marketing means advertising programs where advertisers pay only when a specific action occurs. These actions can include a generated lead, a sale, a click, and more. Inshort, performance marketing is used to create highly targeted ads for a very specific target audience at a low cost. Performance marketing usually means high volume for a very specific cost.
Brand marketers on the other hand believe in narrowly defining target audiences but end up spending a lot of money on ad placements. Gautam Mehra, CEO, Dentsu Programmatic India & CDO, Dentsu International Asia Pacific said, “You’ve defined a persona, you know the emotions you want to elicit, but then you buy a YouTube masthead and CricInfo sponsorships because IPL is up. If brand advertisers look at audience-based buys more deeply than just placements, you will see more relevant ads (sic.)”
Performance marketing is more of a sales function rather than a marketing function and is about meeting the cost of acquisition. This is a reason why budgets are usually high for performance marketing. Mehra goes on to add, “the fact is that an engineer can out-beat FMCGs on performance marketing. Advertisers who have cracked this are spending 10x and are on an ‘always on’ mode (unlike time-bound brand campaigns.)”
There is always the case of supply and demand, with the supply usually exceeding the demand on digital platforms. Ultimately, it boils down to the choice between no ad versus low relevance ad and it is quite easy to guess that having a low relevance ad is better.
Arvind R. P., Director – Marketing and Communications at McDonald’s India (West and South,) said “McDonalds’ for instance, has seen its share of spends on digital grow from 20% levels a couple of years back to over 40% at present. Outcomes of this journey have been encouraging, proven by our media-mix-modelling and other key metrics. We have seen best results from an optimal mix of Television plus digital (sic.)” Moreover, Arvind also believes performance marketing only approach could turn out to be more suited to short term, versus a more consistent full funnel effort. The latter ensures adequate emphasis on building consideration, as well as growing transactions. Arvind feels digital is a complex medium which needs investment in the right talent who could use the right tools. Brands which underestimate the need for the investment are often disappointed from the return on investment from the digital medium.
With the constantly changing consumer dynamics marketers are now shifting to unscripted marketing which frankly needs more insights into the consumer mindset. The lack of marketers to do the proper research is why digital medium is plagued with irrelevant ads.
Facebook Launches BARS For Creating Raps To Counter TikTok’s Growing Popularity
Facebook is leaving no stone unturned to tackle the surging popularity of the Chinese video making app TikTok. As part of its redoubled efforts Facebook is launching a new app named BARS which could be used to create and share raps. The core idea behind the app is rappers could focus on creating content without having to worry about investing heavily in production and equipment.
Facebook said, “Audio production tools can be complicated, expensive and difficult to use. With BARS, you can select one of our professionally-created beats, write lyrics and record yourself dropping bars (sic.)” The company also added, “BARS auto-suggests rhymes as you’re writing to keep your flow going. You can also jump into Challenge mode and freestyle with auto-suggested word cues. Choose from a variety of audio and visual filters to take your creations to the next level (sic.)”
The app is now available in the Apple App Store in the United States of America. The invites for using BARS would be sent out in batches beginning in the USA and then expanded worldwide.
This would be the second app which Facebook is launching to counter TikTok’s growing popularity. Instagram Reels was the latest offering from the photo sharing platform Instagram (owned by Facebook) and was launched as a replacement for the video sharing application TikTok. TikTok was enjoying an unrivalled popularity in India as it became a means to keep boredom at bay during the nationwide lockdown which was imposed in light of the COVID-19 virus. However, the Indian government announced that it would ban 59 Chinese applications in which TikTok was one, along with WeChat, Helo, Cam Scanner and many others. This left a sudden void in video making applications, and Instagram realised the need for urgency to capitalize on this void. Therefore, Instagram immediately pushed their latest feature Instagram Reels which lets its users create 15 second videos with music from Instagram’s database. These videos look very similar to the ones made on TikTok and has gained a lot of popularity in India where Tik Tok continues to be banned.
ALSO READ: 4 Things To Know About Instagram Reels
Google also took advantage of the Indian Government’s ban of the viral application TikTok. Google introduced a new feature on YouTube called YouTube Shorts. The feature for all intents and purposes mimics the same features TikTok used to provide. The new feature mimics many of TikTok’s most popular features, allowing users to make and post 15 second videos with built in creative tools encouraging them to add licensed music and more.
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