Are you planning to start your startup?
Then, it is the right time to start.
Now, India is in its best-ever phase of startup and the economic environment favours aspiring minds. However, you have to plan carefully to ensure your startup doesn’t end within the first year of operation.
Startup funding refers to the money needed to start or run a new business. It can come from various sources and be used for any purpose that helps a startup go from idea to actual business. Funding supports the growth of a startup.
In simple terms, it is a financial investment in a company for office spaces, product development, manufacturing, sales and marketing, and inventory.
The success key for any startup is a combination of planning, foresight, and finding the right investor for startup business in India. Suppose you are an entrepreneur and want to know how to get funding for your startup, how to attract investors, and which funding source to tap into, then read on to find answers.
How to raise funds for startup in India?
Before going to investors, you completely understand your financial needs. You also have to figure out the kind of investment that will help your business grow. Here, some successful startup funding India sources that help you to know “How to raise funding for startup in India?” mentioned below:
- Consider Self Funding/Bootstrapping:
- You can raise funds by using your personal network. It can be your savings, support from family and friends, and consumer debt.
- It is suitable only when you start a small business.
- It authorizes you to test the feasibility of your idea, chart the plan to scale up, account for all costs, and retain 100% freedom in decision-making.
- eBay and Facebook are well-known companies started with self-funding.
- Go for Angel Investors:
- Angel investors have high net worth individuals & fund entrepreneurship for an equity stake in the businesses.
- They work on the principle of high risk and high return.
- They work alone or in a group to screen startups with vast potential.
- The best example of angel investing is Google, Yahoo, and Alibaba.
- Venture Capital Funds:
- Venture Capital is a form of private equity that offers professionally managed funds for startups with long-term growth potential.
- These professionally managed funds pool investors’ finances and create a portfolio of promising startups shares.
- They mostly look for startups with a strong team and good enough traction.
- Try Crowdfunding:
- It is a method used to help raise funds for startups and projects with the contribution of a vast network of people.
- It is quite similar to mutual funds on a basic level.
- It is the best way to represent your ideas to the investors.
- Crowdfunding is generally held through online platforms.
- Milaap, Kickstarter, Ketto, Impact Guru, GoFundMe, etc, are available in India for startups and growing businesses.
- Initial Public Offering (IPO):
- IPO is the procedure through which a private company offers its share to the public in a new stock issuance.
- It is the best way to earn profit by sharing the rewards with the public to meet the company’s long-term goals.
- In India, Zomato Ltd and Tatva Chintan Pharma Chem Ltd have recently set up IPOs.