Ways to raise funding for Startups in India?

Have a brilliant idea for a business and planning to launch your own startup? Just for your information, a survey says that over 94% of new businesses fail during the first year of operation. And Lack of funding for startups is one of the most common reasons behind the failure. Funding for Startups has become a necessity to run any business, and there are various stories of entrepreneurial ventures which could not survive despite having great potential tanking, due to shortage of Startup funding. Funding and fundraising, these both are modern fundamental business scenarios, which help any startups to grow and establish.

Seed funding is a basic of fundraising and, the series funding helps in the evolvement of a startup to a full-fledged organisation by supporting it with calculated funds at crucial steps.

Though when you require funding for startups depends mainly on the nature and type of the business. But once you have understood the need for fundraising, you can check the different sources of finance available.

Here we are listing down a few funding options for startups to know How to raise funds for business in India and raise capital for your business.

• Consider Crowdfunding: In the basic level, Crowdfunding is similar to mutual funds. You can use an online platform, individuals interested in raising funds for their initiative. In this, more than one investor get involved, and they offer a fixed amount depending on the nature of your business, goal and plan of action, and ideas of making a profit.

Reasons to consider Crowdfunding as a Startup Funding option for your business:

The best advantage of Crowdfunding is that it can generate interest and helps startups in marketing the product alongside financing. Their funding process cut out professional investors and brokers by putting funding in the hands of ordinary people. And it also attracts venture-capital investment down the line if you have a particularly successful campaign. All you need is just someone who believes in your business concept and has the means to come together and fund your aspiration.

• Self-Funding:- Also known as bootstrapping, self-funding is ideal for any plan of action when it is hard to convince others of your business idea and vision. Most of the time, investors can request for traction before investing, the initial round of self-funding allows you to demonstrate the feasibility of your idea and build confidence in the investors for a further round of funding. If the initial business requirements small, bootstrapping has considered as an excellent idea for startup funding, with freedom of being your own boss.

• Venture Capitalist: You can find many venture capitalists that readily provides funds for startups. Without understanding the subtle differences between venture capitalists and angel investors, people often interchange it. Unlike the angel investor, venture capitalists are proper firms who aimed at helping businesses to develop and play an active role in running the business. Venture Capitalists look for startups with excellent traction, plan and a strong team. Be flexible enough to take their inputs and accept the close monitoring, if you’re opting for venture capital funding

• Equipment Financing: As per the name suggests, it involves machinery or some other item instead of monetary funds at the disposal. The whole idea behind it to allow businesses to save money on purchasing equipment and use the same for other purposes. It can be a great startup funding option which requires equipment and machinery.
• Government Grants: Government funding for startups in India, provides loans for startups in different sectors of the economy. Indian Government runs various schemes such as the Credit Guarantee Scheme, Stand Up India scheme and MUDRA loan scheme (for small business) and under which the Government provides funds to startups. Also, the state government has their own schemes for startups such as Rajasthan Startup Fest, Kerela State Self Entrepreneur Development Mission, Sarothi startup loan by the Govt of Assam and many more Government Funding for Startups in India.

Conclusion

If you are looking for long-term sustainability, then Funding for Startups is highly recommended, and you can avail the best advantage of the existing and upcoming market opportunities. It helps you to explore the current market opportunities as well.

MD Faisal