Are you planning to start your own business? Now, is the best time to do so. India is in its best ever period of startup ecosystem and the prevailing economic scenario is favouring the aspiring minds. However, as per a recent report, over 94% of new organizations fall flat during the first year of their inception. Absence of funding turns out to be one of the basic reasons. Money is the bloodline of any business, and without money a business cannot survive. Therefore, figuring out the best way to finance your startup gets extremely important for the uninterrupted existence of your business.
There are different choices for securing capital for your business, for example, investors in the market, crowdfunding, as well as venture capitalists and angel investment. Also, today is easier to raise funds from the market than before. So, in this regard, here are 9 different ways which you can adopt to raise you startup capital for your business.
Bootstrapping your new company
Self-financing, otherwise called bootstrapping, is a viable method for startup funding, especially when you are simply beginning your business. First-time entrepreneurs often experience difficulty getting funding without first demonstrating some sort of plan and a future action plan for success of business in the future. So, you can simply contribute from your own savings or can get your family and friends to contribute in your business idea. This will be anything but difficult to raise because of less compliance’s, in addition to less cost of raising. Also, most of the time family and friends pretty flexible with the interest rates as well.
Go for Crowdfunding
In recent times, crowdfunding is gaining popularity as it outlines the fact as well as the belief that your idea is backed by some experienced people in the market. Also, with crowdfunding, you can get funds for your business from the point you have thought of a business idea. So, to fund your business, you can simply gather finances from your family, friends as well as entrepreneurs who may believe in your business concept. Once, the fund have been accumulated, you can go on to start your business operations.
Try Angel Investment
Another quite popular method to attract funds for your start-up is through angel investment. There are people who are always looking to invest money in promising start-ups and earn their share once the company grow and finds it footing in the market. Angel investors either work alone or in a network and look after the start-ups through the period of growth. Angel investment comes with its fair share of drawbacks in the form of high-interest expectations and little investment. However, it has to be also remembered that companies like Google, Alibaba and Yahoo are the by-product of Angel Investing.
Look for Venture Capital for your Startup
Venture capital funds are looked after by professionals who look out for companies that have great potential. The major aspect of the venture capital is that the professionals choose to invest in a business that is solid rather than preferring the equity. So, once the business gets on the track and there is an acquisition or IPO of the business that venture capitalists are associated with, they then get aware with their share and hunt for other investments. Moreover, venture capitalists evaluate the growth of the company in which they have put their money and thus ensure growth as well as sustainability of their investment.
Look for funding from Business Incubators and Accelerators
Businesses that are just looking to start their operations, can get funding for their start-up from business incubators and accelerators. They are found in almost every major city and programs run by them fund hundreds of start-ups annually. The duration of these programs expands from 4 months to 8 months and it requires commitment on the part of the owners of the business. Also, during the program, one gets to develop good connections with investors, mentors as well as competitors utilizing the platform which greatly enhances the business acumen of the participants.
Taking a Laon from the Bank
Another approach to get your startup financed is a business credit from the bank. It is one method for keeping the underlying control of the business in your own hand. Be that as it may, while considering the credit from the bank, check the loan interest rate and whether or not you will be required to give collateral. Prior to opting for a loan, get aware of all the facts, terms and conditions of the loan, and whether you agree to every one of the terms of the loan.
Acquire Funds by winning contests
Another quite amazing practice to attract funds for your start-up is by taking part in contests or competitions that requires emerging entrepreneurs to show their business idea to get funding for their business. Contestants are required to showcase a detailed business plan so that they can gain the confidence of the investors. These contests are covered by media which means start-ups can get publicity for their business which can prove quite useful during commencement and the running of the business.
Take Loan from Microfinance Agencies or NBFCs
Microfinance was set up to provide access to money to entrepreneurs of small-scale business that cannot access conventional financing offered by the banks. People with poor credit-worthiness see microfinance organizations as a relief at times when conventional banks refuse to grant loans. Non-Banking Financial Corporations (NBFCs) give out loans to people who look for funding, without necessarily following any legalities like regular banks and credit provider services do.
Take Assistance from Government Institutions
Government of India came up with the Startup India on 15 August, 2015. This initiative was taken to restructure the ecosystem of start-ups in India. Additionally, the Government has also launched the Pradhan Mantri Mudra Yojana under the Micro Units Development and Refinance Agency (MUDRA) Bank for the purpose of activities of development and refinancing in respect to the micro units. exercises identifying with smaller scale units. These Government establishments and various financing schemes assist startups with getting some fund and monitory aid for the start-ups.
SIDBI – Small Industries Development Bank of India additionally offer business credits to MSME area. Quick Ways To Raise Money For Your Business