Some Best and Easiest Methods to Raise Fund for Startup Business in India
Puja Bhardwaj | StartupCity Magazine
Money shouldnever be an obstacle in the way of pursuing your dreams. If you want toinitiate your own venture but don't have funding, you can still get it off theground in various ways.
Here, we are presenting best ways to raise fund for startup:
Crowdfundingis a new concept and has become a premier way for entrepreneurs to get theirstartups funded. It incorporates taking a large group of people to uphold yourbusiness with comparatively small amounts of money each. These sponsors willnot ever get a say in how your company is managed, depending on the platform,and they collectively share a small risk each.
Angelinvestors are somebody, who has surplus money and a keen interest to invest inraising startups. They also operate in groups of networks to collectivelyscreen the proposals before financing. Apart from capital, they also providementoring and advice. This method is mainly for companies that are on theinitial phase of growth, and they want to take more risks in investment forbigger returns.
Venturecapitalists manage funds professionally and invest in companies that have hugepotential. They normally invest in a company against equity and exit when thereis an IPO or an acquisition. VCs offers expertise, mentorship and performs as alitmus test of where the company is moving. A venture capital investment isfitting for small businesses that are ahead of the startup phase and alreadygenerating revenues.
Bank loansare also a great option. If you approach them with a solid business plan, youcan avail good funding for your startup. But in the absence of collateral, itis tough to secure a loan. Here, find a co-signer, someone with good credit whoagrees to be responsible for the debt if you default.
Startup Accelerators and Incubators
Acceleratorsand incubators are also effective ways to take support for funding.
Acceleratorprograms have a fixed frame of time, under which individual companies spendanywhere from few weeks to few months working with a group of mentors to establishtheir business and avoid difficulties. The accelerator aims to support thestarting of the business in a few months.
Startupincubators work with corporations that are at an initial stage, and they do notoperate on the set schedule.
Acceleratoris like a greenhouse for young plants where they are getting perfectenvironment to grow, while incubator selects the best seeds and gives thembetter soil for germination and growth.
Althoughthere are numerous methods of fundraising, but keep in mind that it isn't anymagic, and contrary to the famous tale, nobody is waiting in the wings to throwmoney at you just because you have a unique and exciting business concept.Prepare a proper business plan before approaching for funds. Your business planmust be well structured to carry the modus operandi, profit forecast andestimated time of maturity.
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