10 Funding Options To Raise Money For Your Startup Business
Money is life blood of organisation. Without money organisation cannot survive.
Many of startups and entrepreneurs are looking for fund for their startup and idea. Due to lack of knowledge they are not able to start it. Some time they not taking financial risk and did not jump into the field. At the end they lost opportunity and feel regretted about it.
Below are the various sources and ways from where you can raise fund for your startup and business.
1) Bootstrap your startup Business:
Bootstrapping means self funding for your startup and business. In this process of building a business you are using resources that you have. Take help of family and friends for investment. Invest your money in startup and run it.
This option is good for those who don’t want other interference in their business. It’s a good for some business but not for all business. Those businesses who require money from day one that are not fit in this process.
2) Launch Beta Version or Prototype of Startup:
Before pitching to the investors make sure your startup have some beta version or prototype ready. This will help you in getting attention of investors. They can put trust and believe in you as their money will be in safe your hand.
It will be easy for you to getting fund for your startup by doing this.
3) Involve Family and Friends in Your Business:
Family and friend are the main source for fund at initial stage as you have read it in bootstrapping stage. It helps the person to get fund immediately at cheaper rate as compare to borrow from someone or bank.
4) Get Business Loan from Banks:
After family and friend bank is the institution where people are going to borrow money. But it has some lengthy process.
Banks are checking credibility of person. They are checking business plan, projects and valuation of business on that bases they sanction loan to startup.
Some time you can get it by mortgaging your securities with them.
For getting easy loan at least one person should have to be in your team who has continuous income source from salary or other sources on bases of that statement startup could get loan from banks.
5) Get Venture Capital in Your Startup:
It is professionally manage public or private firm. They are investing in promising startup or in high profitable business for getting high rates of return. They provide funding in return expect high portion in equity.
They are generally investing in IT and technology companies and startup. Venture capitals are not always loyal. They expect return on their investment within 3-5 year, and if startup is not fit in their criteria then they are not investing in it.
Good venture capital helps startup not only in funding but also in the mentoring for business. Wise and experience venture capitalist helps startup in strategy building and sharing insight and experience to startup
6) Get Funding form Angle Investors:
Angle investors who have surplus money and keenly interested in invest in startups. Also known as private investor and seed investor
They are risk takers and get more return on that. They are also works in groups as well individually. Angle investors are investing less money as compare to venture capital.
7) Present Your Idea on Crowd Funding Website:
Crowd funding is a new way of getting fund. Crowd funding site are great source for generating money for startup.
Startup get fund from pre order, taking loan and contribution from more than one person.
On crowd funding website entrepreneur put detail of business plan of their startup, time line and goal of business, planning and funding requirements. Videos and images of startup will encourage more to public to donate and invest.
Visitors come on that platform and read about it and if it excites them then they donate or pre order their products.
Through this entrepreneur not only get money but also promote their brand before launching their product. Even it might attract venture capital from it. It reduces time and money from pitching in events, meeting with investors and paper work.
8) Take Help of Government Institution:
Government of India has launched Startup India on 15 August, 2015. It’s mainly for restructure startup ecosystem in India.
Government has also launched Pradhan Mantri Mudra Yojana under the Micro Units Development and Refinance Agency(MUDRA) Bank for the development and refinancing activities relating to micro units.
These Government institutions and schemes can help startup to get some finance and monitory resources for their startup.
SIDBI – Small Industries Development Bank of India also offer business loans to MSME sector.
In each district there are District Industries Centre (DIC) available, you can contact them for finance and resources of your business.
9) Raise Money by Winning Competition:
Now a day’s various business plans and other startup competition were increased. Collages, private institutions and government have launched various competitions for startup.
It will encourage budding entrepreneurs and students to take part in it and learn. By participate in this you not only you can win prizes but get attention of crowd and build network for your startup.
In this event you have to pitch your idea or explain your business plan and convince jury and investors to invest in it.
10) Generate Funding from Business Incubators and Accelerators:
Business Incubators and Accelerators are found in major city. They nurture the business by providing tools, training and arrange meet up with other business.
If you want to go fast then go for outside money. It might reduce your freedom of taking decision. While Bootstrapping is good option for learner but you can lose the market opportunity in this process.
Chose opportunity wisely and rock the market.