Top 6 Ways to Get Funding For Your Startup
The startup scenario has changed completely after the launch of Startup India and Make in India programmes. Now it seems startups have become the key driver for economic growth but when it comes to running a startup business successfully, it needs money and money can be difficult to get by. According to reports, startups failure rate is as high as 90% because of lack of funding. In means 6 to 8 of every ten startups fail as they do not have enough money to run business. To put a stop to failure in the future, it is very important for every startup to think about funding before starting business idea. Well, what you should do to get finance help for your startup? It is not an easy process for everyone but you can think of the following options:
- Self-Funding or Bootstrapping
When you are just starting, self funding is the best option. It is more advantages because there are no formalities or compliances required to fulfill. On top of that when you will use your money, you will become more serious about your business and increasing its value. If you don’t have enough savings, you can ask your friends and family members for help. Some famous Indian companies that have bootstrapped included Quick Heal, QuackQuack.in, Zoho, Indibni and many more.
From the incubation to revenue making, a number of challenges will come in your way. If you don’t have the luxury of money from parents and friends, you can think of investors who could be good options to get money in your business idea. If you are a 1st time entrepreneur, you may face difficulties in getting funding than others as to convince investors you need to show traction and a well planned business strategy to ensure success in the future.
Crowdfunding has been gaining popularity among startups these days. The popular crowdfunding platforms including Wishberry, Indiegogo, Fundlined, Ketto, Catapooolt and others are helping startups in India. The process of crowdfunding is similar like taking a loan from more than one person at a time. Also , when you apply for crowdfunding, you will need to put up a detailed description of your business all along mentioning clearly about business goals, future plans and how to run business successfully. Anyone from crowdfunding network who believe in your idea will contribute money to offer help. Crowdfunding is more valuable because it also helps in marketing of the product along generating interest.
- Angel Investors
Angel investment could be a good choice if your business has established beyond the startup phase. Angel investors are highly motivated individuals who work collectively to screen the proposals before investing their money. They can also join you as business advisor for offering advice and mentorship alongside capital. You can check out with Indian Angel Network, Mumbai Angels, Chandigarh Angels Network, and Hyderabad Angels, who already have invested in a number of startups.
- Venture Capital
You can get venture capital for your business. VCs choose those companies that have huge potential. They also offer mentorship to evaluate the business drawbacks and take it beyond the sustainability to scalability phase. They usually invest for short time period against equity and exit when an acquisition happens in your startup. You can think of raising VC from Accel Partners, Blume Ventures, Nexus Venture Partners, Kalaari Capital, Helion Ventures, Canaan and Sequoia Capital etc.
- Business Incubators & Accelerators
These days’ incubators and accelerator prorammes are founded almost in every city to offer assistance for more number of startup businesses. Incubators will provide you shelter tools and networking assistance while accelerators help in taking a quick leap. Being a part of these programmes you can connect with the investors and mentors from across the world. Y Combinator, Amity Innovation Incubator, AngelPrime, CIIE, Ceed, IAN Business Incubator, Startup Village, Villgro, and TLabs are some famous India based incubators.
Apart from these options, you can think of taking business loans from banks, microfinance providers and NBFCs etc. In addition, tremendous startup programmes and contests like NASSCOM’s 10000 startups, NextBigIdea Contest, Microsoft BizSparks, Lets Ignite and Conquest are organized by various institutions to maximize the fund rising opportunities for startups. To be a part of these contests, you should have a business plan to convince the business fraternity.