Some Best and Easiest Methods to Raise Fund for Startup Business in India
Puja Bhardwaj | StartupCity Magazine
Money should never be an obstacle in the way of pursuing your dreams. If you want to initiate your own venture but don’t have funding, you can still get it off the ground in various ways.
Here, we are presenting best ways to raise fund for startup:
Crowdfunding is a new concept and has become a premier way for entrepreneurs to get their startups funded. It incorporates taking a large group of people to uphold your business with comparatively small amounts of money each. These sponsors will not ever get a say in how your company is managed, depending on the platform, and they collectively share a small risk each.
Angel investors are somebody, who has surplus money and a keen interest to invest in raising startups. They also operate in groups of networks to collectively screen the proposals before financing. Apart from capital, they also provide mentoring and advice. This method is mainly for companies that are on the initial phase of growth, and they want to take more risks in investment for bigger returns.
Venture capitalists manage funds professionally and invest in companies that have huge potential. They normally invest in a company against equity and exit when there is an IPO or an acquisition. VCs offers expertise, mentorship and performs as a litmus test of where the company is moving. A venture capital investment is fitting for small businesses that are ahead of the startup phase and already generating revenues.
Bank loans are also a great option. If you approach them with a solid business plan, you can avail good funding for your startup. But in the absence of collateral, it is tough to secure a loan. Here, find a co-signer, someone with good credit who agrees to be responsible for the debt if you default.
Startup Accelerators and Incubators
Accelerators and incubators are also effective ways to take support for funding.
Accelerator programs have a fixed frame of time, under which individual companies spend anywhere from few weeks to few months working with a group of mentors to establish their business and avoid difficulties. The accelerator aims to support the starting of the business in a few months.
Startup incubators work with corporations that are at an initial stage, and they do not operate on the set schedule.
Accelerator is like a greenhouse for young plants where they are getting perfect environment to grow, while incubator selects the best seeds and gives them better soil for germination and growth.
Although there are numerous methods of fundraising, but keep in mind that it isn’t any magic, and contrary to the famous tale, nobody is waiting in the wings to throw money at you just because you have a unique and exciting business concept. Prepare a proper business plan before approaching for funds. Your business plan must be well structured to carry the modus operandi, profit forecast and estimated time of maturity.
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