US Shutdown: Spending Cuts Will Slow Down Start-ups, Says Emo2 CEO Mir Abid Hussain
Sanghamitra MandalOct 8, 2013, 06.11 PM
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How will the
A multi-touch, multi-user, interactive computing surface is not an everyday product developed by an Indian start-up, but Bangalore-headquartered
How will this current shutdown affect Indian start-ups operating in the US?
The federal government is going to spend less this year and the effect will trickle down sooner or later. If the shutdown continues, we should definitely expect businesses to spend less on IT. The federal government will spend less on IT as well, making it quiet difficult for B2B companies in the US.
Start-ups who are immediately affected by the shutdown are the ones that need federal licences or clearances. This could mean lesser businesses created in this space. The USPTO is shutting down, which means our patent examinations maybe delayed as well.
Do you expect your niche business to be affected?
Not in the near future. Every market is different for us. The
What about start-up
Series A funding is definitely seeing a crunch at this point. And this kind of recklessness in deciding the US budget could lead to less funding in the seed stage. Long-term prospects of funding within the US are also a question mark at this point. But start-ups need not be too concerned. We should remain positive that there will be a settlement to the issue and we can all move on.
Of late, VCs have been quite cautious about investing in Indian companies. What’s your take on that? Will the shutdown move the money back to the emerging markets?
In recent times, we have seen that when there is a problem with the US
Finally, what’s the India reaction as far as the start-up community is concerned?
The US is a unique market and this is not the first time the federal government has shut down. The US, with all its flaws, will still be attractive for Indian start-ups in the near future. The tech ecosystem in the country is generally unaffected by recession and shutdown. We should assume that individual states will perform well during this period and will remain unaffected. The situation may change if there is a debt default and we should wait to see how that plays out.
Watch this space tomorrow for another start-up reaction.