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Find the Money or Funds for your start-up in six unique ways
Find the Money or Funds for your start-up in six unique ways
Start-up business needs funds to convert their dreams into reality. In a survey, it is found that most of the start-ups failed in the first 5 years. Read Advantages for Start-up business in India and the Reasons for Failure.
Whether you have started a medium, small or micro-enterprise, or big enterprise, you require funds to create a strong base. It also helps to expand the business. But most entrepreneurs feel tense in collecting funds for business because it is not easy work. Here, are eight ways to initiate funds for your start-up business.
Self-Investment
If you have savings, invest with savings to save time and long procedures. Or you can ask your known friends or family members to provide funds. It is easy to take funds from them. Also flexible with the rate of interest.
Self-funding is more like Bootstrapping with the advantages of involvement. But it is not suitable for big enterprises where entrepreneurs require funds from the first day.
Raise Funding from the Public:
More commonly known as Crowdfunding is a procedure to raise funds for your business from the public as a loan, investment, pre-order, or contribution.
The method was less popular. But now entrepreneurs are raising funds in this procedure with the help of social media or web browsers.
For this, at first, the entrepreneur put the business details on the Crowdfunding platform mentioning the goal, profit, and the reasons for funds. Entrepreneurs can make pledges or book pre-orders fund givers.
This procedure is useful because it cut out the broker fees or professional investors’ benefits.
Some popular Crowdfunding sites are Kickstarter, Wishberry, Indiegogo, FuelAdream, Ketto, and Milaap.
Raise Fund by Winning Contests:
Some business-related contests encourage business plans or build products. These business contests provide you media coverage along with funds winning them. You can participate in any contests which you find suitable for you.
Get an Angel Investor:
Angel investors have a surplus of cash to invest in and are interested to invest in new projects and business plans. It will help your start-up business if you find your angel investor.
The angel investors also offer advice and mentoring. Along with that, they like to take risks with higher returns. However, Angel investors invest lesser money than venture capitalists.
Venture Capital for your business:
Venture capitalists invest money in larger amounts against equity. The venture capitalists give mentorship, and expertise, and evaluate business from a scalable and sustainable perspective.
However, Venture capitalists invest for a short period of time like 3-5 years and try to recover investments. If you have products that will take a longer time to be marketed, then Venture Capitalists may not show any interest in you.
Apply for Loans under Government Schemes:
The Government of India has launched many schemes for MSMEs, SMEs, women entrepreneurs, rural or urban ventures, educated youth, and start-ups intending to make socio-economic growth in India.
A start-up business entrepreneur can research the latest government scheme and borrow a loan from the Government of India.
There are several schemes like Pradhan Mantri Mudra Yojana (PMMY), Stand-up India, or Atal Innovation Mission.
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