In a typical startup it is common to go through many rounds of funding. At each level you should have enough funding meet the needs and to shift the gear to the next level. Only few startups will get this right and most of them will be at a state of underfunded. It is said that handling funding and competitors are easy as compared to investors. Make use of right channels for funding for every stage of the business.
- Open Your own Wallets First:
Even before looking for options and different possibilities, first look for the available fund that can be arrange from what you have in wallets and bank balance. This money does not require any interest to be paid immediately. However, it should be accounted as part of your capital investment. Also among all other options the best one is always to look for is from what is personally available. Simply tap into your home equity, savings, and retirement accounts to get the maximum funding that is easily available.
- Get assistance from Friends and Family:
The second best option is to check with your family and close friends. This is a major source of fund for most of the startups. Having rich family is a great benefit; borrow from your parents to pump into your business. They will definitely be happy to see your business flourish. But remember not mix together business and personal life. There should be a clear distinct between both money related conversation should not affect relationships.
- Request for Business Grant from Government:
There are lot of Government schemes and plans out there which are encouraging startups in India. If you can furnish your business plan in a smart way with realistic approach they will be happy to fund a major part of your requirement. Also this is one of the safest modes of borrowing fund for any type of business. Interest rates and other charges will be lower as compared to what is charged by private funding agencies.
- Kick Start a Crowd Funding Campaign:
This is the latest way of pooling fund for any type of business. There are many platforms such as Indiegogo or Kickstarter which will help in crowd funding campaigns. The way it works is an entrepreneur will give a detailed description of the business plan, financial strategies and goals on the platform. Individuals and business that trust in this initiative will give money.
- Approach Venture Capital Investors:
This is a professional group setup specifically for fund startups. There are lot of companies that are out there who are looking to offer this type of funding in the market plus the return expected on these are also high. However, they will look for large opportunities in your business and should have stability on the business plan. There will be experts in their teams who will check the industry you are looking to start your startup before approving funds.
- Look for Fund through Angel investors:
Just like venture capitals this is also concentrated on offering capital for new business initiatives however these are for smaller operations. However, they will take major portion of your profits. Some angel companies will even expect 49% of your company’s profit.
- Be a part of Startup Incubator or Accelerator:
Similar to venture capital, even startup incubator or accelerators are also involved offering fund for startups. However, these are individuals and not companies. These are also called as seed firms.
- Trade Equity or Services for Startup Needs:
As similar to any other types of companies, even startups have the option to pool in fund through trading equity or services to public. The fund raised through sheets will directly reflect in the balance of the startup.
- Look for a Bank Business Loan:
A bank loan is a best fund provider, this can also considered as one of the easiest way of getting fund. The debt can be repaid in monthly installments and the highlighting part of this type of funding is, it will not demand for a share of your company profits.
- Private Equity Firms:
Though this is considered as a traditional path for investors to fund, it is still a great access to get funding for any type of startups. The investment can range between thousands to millions as per the requirement of the startup.
Choose the best options from the above list and make use of the style of funding that suits your business needs.