Working on an idea but wondering how to Get Funding For Startup? Here we came up with the 6 most reliable ways to get your startup funded:
- FAMILY AND FRIENDS
- Angel Investors
- Venture capitalists
Bootstrap also was known as self-funding. When the investment is less, bootstrap should be considered as the first option to Get Funding For Startup. It should be considered especially when you are starting your business, as generally a business without any past work, customers, or transaction faces the difficulties in raising the funding from investors.
2) Family & Friends
Friends & family should be your 2nd preferred option(after bootstrap) to getting Funding For Startup. This is a comparatively easier source of raising funding as these persons believe in you and have faith in you. So, always give a try to this method of funding, and don’t be afraid to ask your friends & family for business loans.
Perks with this method is that it is most likely that you will get money from your friends and family without having to pay any interest, unlike a bank.
Fact: In the US, friends & family are the 2nd top preferred option to raise funding for the business.
Crowdfunding is the process of funding startups by raising small amounts of money from a large number of people. This is one of the rapidly growing ways to get a startup funded and preferred by many entrepreneurs. Perks with crowdfunding is that along with money, it also generates interests of the consumer and gets many references, which helps in marketing.
4) Incubators / Accelerators
This is one of the great options for early-stage startups. Accelerators help in the growth of an existing company, while incubators work on disruptive ideas with the hope of building a successful business out of it. Found in almost every major city, these programs assist hundreds of startup businesses every year.
a) Angel Investors
An Angel investor is a person who has surplus cash and interested to invest in upcoming startups. Angel investors usually give support to start-ups at the initial stage when most of the start-ups face difficulties in raising higher funding. Some of them also offer mentoring along with capital, which varies from investor to investor.
b) Venture Capitalists (VCs)
Venture capitalists are private investors that invest in companies that have great success chances. VCs invest in a business for an equity stake and exit when there is an IPO( initial public offering) or an acquisition. VCs also provide mentorship, expertise, and evaluating the business from the sustainability and progress point of view along with funds.
The bank provides two kinds of finance for businesses. One is the working capital loan, and the other is funding. Working Capital loan is the loan required to run a whole process of investing to profit generation. Funding from the bank involves the same process of raising funding from investors where you need to pitch your plan & sample, based on which the loan is sanctioned if the bank considered your business as a good investment.
In many countries, the government is offering loans for aspiring entrepreneurs, as new businesses help in the economic growth of the country.
Eg:- The Government of India has launched Startup India which will provide a total of INR 10,000 Crore Startup Fund to build a strong start-up & business ecosystem that is conducive for economic growth and generate employment opportunities.
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