Giving Wings To India's 'Barefoot Unicorns' : A Strategic Acceleration Model for Backing High-Aspiration Entrepreneurs through Incubation and Flexible Finance

Bhargava, Pranay (2025): Giving Wings To India's 'Barefoot Unicorns' : A Strategic Acceleration Model for Backing High-Aspiration Entrepreneurs through Incubation and Flexible Finance. Published in: MICROECONOMICS: GENERAL EQUILIBRIUM & DISEQUILIBRIUM MODELS OF FINANCIAL MARKETS eJOURNAL , Vol. 16, No. 49 (27 June 2025)

Abstract

In India, entrepreneurship is often reduced to skilling combined with nano-finance. Public programs largely wash their hands after budgeting for short-term training, linking to microfinance, and creating shared infrastructure — all designed to serve large numbers of mass entrepreneurs at subsistence levels. This paper takes a 180-degree sharp reversal of that approach. It argues that by ignoring the more aspirational, growth-ready entrepreneurs — those sitting at the top of the local entrepreneurial networks — current policies are actually promoting enterprises sub-optimally, and failing to unlock the real potential of India’s unincorporated sector. The paper proposes an Acceleration Model focused on identifying and backing Barefoot Unicorns — the high-aspiration HWEs and αHWEs strategically positioned at the top of local entrepreneurial networks — through adaptive incubation, behavioral conditioning, flexible finance (revenue-based financing, micro-equity), and network-driven scale, aligned to the unpredictable, non-linear journey toward Product–Market Fit (PMF). Even a modest shift could unlock 18 crore new jobs. This paper offers a strategic blueprint for governments, catalysts, CSR, incubators, investors, lenders, and DPI ecosystem actors to move beyond outcome-poor schemes towards high-leverage, ROI-maximizing entrepreneurship models.

• Item Type: MPRA Paper
• Language: English
• Keywords: MSME policy India; MSME job creation; Revenue-based financing; Rural entrepreneurship; Micro enterprises; MSME cluster development; High-growth entrepreneurship; MSME incubation; Mass entrepreneurship vs high-growth entrepreneurship; Entrepreneurial ecosystem design; Barefoot Unicorns; Hired Worker Enterprises (HWE); Micro-equity; Flexible Finance; Incubator micro enterprises
• Subjects: G - Financial Economics > G2 - Financial Institutions and Services > G23 - Non-bank Financial Institutions ; Financial Instruments ; Institutional Investors; I - Health, Education, and Welfare > I3 - Welfare, Well-Being, and Poverty > I38 - Government Policy ; Provision and Effects of Welfare Programs; J - Labor and Demographic Economics > J2 - Demand and Supply of Labor > J21 - Labor Force and Employment, Size, and Structure; L - Industrial Organization > L2 - Firm Objectives, Organization, and Behavior > L26 - Entrepreneurship; M - Business Administration and Business Economics ; Marketing ; Accounting ; Personnel Economics > M1 - Business Administration > M13 - New Firms ; Startups; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O12 - Microeconomic Analyses of Economic Development; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O17 - Formal and Informal Sectors ; Shadow Economy ; Institutional Arrangements; O - Economic Development, Innovation, Technological Change, and Growth > O3 - Innovation ; Research and Development ; Technological Change ; Intellectual Property Rights > O31 - Innovation and Invention: Processes and Incentives

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