How to secure funding for your startup
Many philosophers, inventors, and entrepreneurs have an idea for a corporation that may launch a social revolution. The new products and services will assist to solve the major problems facing the society. You may design low-cost tools to improve education or a platform to connect other organizations and vulnerable groups. The government of India started the Start-up India initiative to help and grow the scene of Indian entrepreneurs. Among its various benefits are tax ones, simplified compliance, IPR fast-tracking, etc. Although your company concept is great, realization of it depends on starting money. This article describes numerous ways of making money for a business as well as their procedures.
How To Secure Funding For Your Startup
1 investment made by Close Network
Losing money from friends, relatives, and a close network that believe you is easier than from investors or banks. They share your aim, hence they most definitely help your business. Getting legal advice from friends or family would be a wise choice should you choose to borrow from them. The method of startup finance has the advantage of flexible return of the funds. Conversely, borrowing money might strain relationships and cause the family less comfort. Thus, follow your promise and try to return the money.
2. Government programs
The Indian government established many lending initiatives designed for startups. It came to see how much startups contribute to creative inspiration and economic growth. It constantly helps women entrepreneurs, educated young people, members of the SC/ST category, villages, rural areas, etc., so improving India's total economy. Various departments and organizations developed strategies to provide young businesses financial, infrastructural, and regulatory support. Some of the initiatives started by the Government of India are listed below.
- Samridh Scheme Stpi Samridh
- One of the websites is Digital India Genisis.
- Shakti Drone
Read also: Creating A Venture Capital Fund
3. Name an Angel Investor.
Those with spare money who would wish to invest in new companies for equity are known as angel investors. Since angel investors want larger profit returns, getting startup funds from them comes largely with a risk. Popular Indian Angel Investors are Ratan Tata, Kunal Shah, and Sanjay Mehta. Start-up founders can establish direct relationship with investors for funding. Though they want a respectable return on investment, a strong company idea and proposition motivate investors. So be careful to look at and validate the idea entirely. It must have financial space as well as artistic elements.
4. Venture funders
Early-stage companies with high potential are invested in by venture capitalists (VCs), thereby significantly influencing the startup scene. Startups attracting VCs have a strong, durable business model and a talented team—that is, clear, ambitious long-term ambitions. Usually in return for equity, VCs support companies aiming for big earnings. Venture capitalists build long-term relationships to match their success with the businesses unlike angel investors. Strong competition may cause VCs to refuse to support the earliest or later stages of a company. Venture investors essentially give money and strategic guidance for business expansion.
5. loans from banks
Depending on their creditworthiness and business plans, Indian banks award startups traditional loans. Two ways it helps young companies get money are working capital loans and loans. While applying might take time, obtaining a bank loan offers companies protection and allows them to retain whole control. However, getting loans from either public or private sector organizations becomes challenging if you have no financial background or acceptable credit score.
6. Start-up Incubators & Accelerators
Engaging in an incubator or accelerator program offers companies resources, networking opportunities, and mentoring. Usually looking for help, these programs promote rapid development. Combining a shared workplace with a mentorship development center will help the firm into expansion. Among additional value-added services they offer include utilities, office space, and legal help. Still, the competitive environment might make entrance challenging, and entrepreneurs might discover program goals alter their vision.
Read also: What Is A Venture Capital Firm
7. Group Resources
Crowdfunding is the process of fund gathering from many investors utilizing social media sites or web-based platforms for various applications. It addresses humanitarian issues, disaster relief, charity, and startup fund raising. India boasts a wealth of online crowd-funding sites: Indiegogo, Ketto, Milaap, GoCrowdera, Catapooolt, FundRazr, Kickstarter, GoFundMe, Fuel A Dream, and Impact Guru. This democratized startup funding model can offer validation and variety of investor base.
8. Bootstrapping, or inactivity with self-financing
Bootstrapping is one risk-free way to start and expand the business. Starting a business depends on the finances of entrepreneurs. It reduces the pressure of repaying the money or providing the other side equity. Although it provides founders with special control, it may limit the extent of growth and breadth of development. Bootstrapping, on the plus side, encourages financial discipline and resource economy.
9. freelancing
Providing freelance services in their field of expertise enables companies to get financed. This gives rapid money and enables one develop their talents. It will let you start your company knowing money in hand. Though it might be challenging, juggling freelancing with launching a business runs the risk of diverting focus from the primary company.
10. Competitions and Financing
Participating in grants and contests may give business recognition and non-diligent funds. Seizing such opportunities enhances reputation and attracts additional business. Still, the application process requires precision and time and the competition might be fierce. Moreover, make sure you are comfortable with the layout should there be prizes.