When Prime Minister Narendra Modi handed over the symbolic G20 presidency gavel to Brazil's President Lula da Silva last week, he also passed the mandate to continue the Start-up 20 Engagement group into their presidency next year.
This group can be instrumental in alleviating the regulatory burdens start-ups encounter during global expansion.
A harmonised global definition for start-ups would be a good starting point, simplifying compliance by creating a shared understanding of regulatory expectations across G20 nations. Governments could further support this by providing a 'compliance roadmap', possibly a digital platform outlining critical requirements in each jurisdiction.
According to Tejas Jain, founder of insurtech BimaKavach, this would help start-ups navigate the often-complex landscape of international regulations. Additionally, the engagement group could facilitate cross-border partnerships, both in terms of investment and business collaborations.
"By acting as an intermediary that understands the regulatory landscape, the group could significantly reduce the friction start-ups encounter when expanding globally. Through these avenues, the Start-up 20 Engagement Group can potentially turn the daunting task of global expansion into a more manageable endeavour for start-ups," he opined.
Brazil's burgeoning fintech sector, which has players like C6 Bank, Creditas, Dock, Ebanx, and CloudWalk, places it in an advantageous position to lead the Start-up 20 Engagement Group. It could leverage this experience to address challenges in global payments and cross-border investment—an area of importance identified during India's presidency.
By bringing these start-up founders into the discussion, Brazil could offer practical, experience-based solutions to compliance and regulation issues start-ups face when going global. Jain said, "It could create frameworks for cross-border fintech collaborations, using its domestic successes as a model. This targeted approach would align with the Start-up 20's aim to facilitate global investment and regulatory ease for start-ups."
Picking Up The Baton
The start-up community has several other recommendations for the seamless transition of the Start-up20 Engagement Group from India's G20 leadership to Brazil. Firstly, they feel it is imperative to prioritise consistency and alignment with India's overarching interests. Ensuring a smooth handover requires Brazil to continue the group's steadfast dedication to fostering innovation, entrepreneurship, and digital transformation.
Secondly, the establishment of robust partnerships is of paramount importance. Sumit Manon, co-founder and CEO of advisory firm The Response Company, believes Brazil should proactively engage with key stakeholders, including governmental entities, industry associations, and venture capital firms, to garner support and funding. "This collaborative approach will sustain the group's momentum. Additionally, Brazil should tailor the group's initiatives to harmonise with its unique start-up ecosystem, thereby enhancing their relevance and impact," he stated.
The Startup20 Engagement Group plans to raise the annual investment in the global start-up ecosystem to $1 trillion by 2030 from $700 billion last year. Brazil should emphasise the importance of increasing yearly investments in the global start-up ecosystem.
Anirudh Damani, managing partner at Artha Venture Fund, recommended establishing a G20 Fund of Funds to support early-stage funds and emerging cross-border managers adequately. This fund can aggregate capital from various countries and serve as Limited Partners (LPs) for these funds while encouraging family offices, endowments, and other institutions to participate in the initiative.
"India's $2 billion fund-of-fund initiative by the Ministry of Commerce and SIDBI could be the blueprint for G20 to emulate! However, taking swift action is essential; otherwise, India's praiseworthy initiative will lose momentum," Damani stated.
Brazil can introduce policies incentivising start-up investment, such as tax breaks for angel investors or venture capital funds. Creating a favourable regulatory framework can attract more funding and encourage entrepreneurship.
Manish Khanna, co-founder of online trading platform Unlisted Assets, also noted that the country should invest in skills development as nurturing talent is vital for a thriving start-up ecosystem. It could invest in programs that provide training and mentorship opportunities for aspiring entrepreneurs and equip them with the necessary skills to succeed in the digital economy.
Fostering international collaborations should be a priority; the start-up ecosystem thrives on global networks and partnerships. "Brazil could facilitate partnerships by organising networking events, hackathons, or innovation challenges that bring different stakeholders together," Khanna stated.
By encouraging cross-border partnerships and knowledge exchange among start-ups, investors, and policymakers, Brazil can fortify the foundation for innovation and create more opportunities for its start-ups on the global stage.
"Building on the group's work, Brazil can advocate for streamlined and consistent regulations across member countries. Encouraging entrepreneurship education and skill development is vital. Brazil can invest in programs that nurture talent, preparing the next generation of innovators and entrepreneurs," said Mayank Singh, co-founder of Campus 365.
Brazil can showcase its unique strengths and start-up potential on the world stage during the next G20 Summit, attracting foreign investments and spotlighting innovation and technology prowess. Streamlining processes related to business registration, licensing, and permits can encourage more entrepreneurs to enter the market.