A startup making losses for 4 years is surprised to learn that they do not qualify as a non-profit organization, and hence are unable to get its tax and compliance benefits. InstaGraphic, a startup that has a unique business model, and ‘innovation at its core’, failed to take advantage of the tax rules and relaxed regulation that non-profits enjoy in the country.
“Well, we haven’t made any profits since founding, isn’t that non-profit as the name suggests? How many years of non-profiting will it take for us to qualify as a non-profit?” asked Faydaa Nahua, a co-founder, while speaking to the Blue Bonnet Bot.
“No, you need to DECLARE that we will not make profits, and even if you do make a profit, you will use it for the purpose for which you formed your Non-governmental organization.” said the Bonnet Bot.
The co-founders were surprised that they have to declare BEFORE they form the organization, that they are a non-profit organization. “If we knew earlier itself that we will not make a profit, why would we have started the business in the first place?” Said Fael Duhguy, another co-founder of the non-profitable organization.
“If we knew earlier itself that we will not make profit, why would we have started the business in the first place?”Fael Duhguy, co-founder of the non-profitable organization
As to reasons why they failed to make profits, they said that by mistake, they scaled their startup before becoming profitable, and thus ended up scaling up their losses as well. Thus, they only got 7 rounds of funding, which got burned up in spite of strong mission and vision statements, which has baffled ‘experts’. They failed to get more funding in spite of repeatedly using terms like lean business, bootstrapped, and even ‘product-market fit’ in their day-to-day parlance. Unfortunately, they could never reach the stage where they could use terms like employee engagement, workforce diversity, and, most of all, ‘equal opportunities employer.’ They however justified the fast burning up of their funds, saying that they at least could qualify for 2nd and 3rd positions in ‘employer of the year’ and ‘best companies to work for’ surveys respectively.