10 Tips to find funding for a startup
One question that frequently arises among budding entrepreneurs is that from where one can could get funding for their startup. But the thing is that there is no perfect answer to it even if you have the most workable or brilliant business idea. And having said that there are creative ways and options that are available for starting a business. If you desire to be an entrepreneur, I encourage you to think of all possible pros and cons before jumping into the business. Of course, every alternative has its own advantages and disadvantages, so think before you opt one.
For example, professional investors are only keen to invest when you already have a previous experience in building a business. They also might ask for holding a portion of the business equity and control for the funds they do provide. Thus it will always be a question of what you decide will be best for you. Here is the list of 10 tips that would help you in gaining venture for your startup to be funded. If the things work out for the best then you are on your way to become a successful entrepreneur.
- Fund your startup yourself: The best answer to find funding for your startup is to self fund it. Over 90 percent of startups are self funded (also called bootstrapping). It may take a bit longer to save some money before you start and grow. The advantage you get from boot strapping is that you don’t have to give up any equity or control to anybody. You are the whole sole owner of your business.
- Pitch your needs to friends and family: Another safe bet is to ask your family and friends to fund your venture. It is safe because you don’t have to share any equity with them and also there is no obligation to pay the interest on the loan. As there is another general rule, to prove your credibility to the professional investors funding from family and friends will impress them, because you already have people that believe in your idea.
- Request a small-business grant/government funds: There many government schemes that gives funds for promotion of business ideas that are focused on social causes or work on developing employment for people. Recently India has seen launch of PM Modi’s startup India which has planned to fund 1000 crore corpus funds to support the startups. The process is very easy you could sign up on the official site (http://startupindia.gov.in/registration.php) by just filling a form or download app to file for startup funding. The best thing about government funding is that you don’t share equity and you also learn through other peers.
- Start a crowdfunding campaign online: This one is the newest source of funding, where anyone could participate. For example (https://www.ketto.org/) is the site that helps you in crowd funding. It works on the basis of pledges to your startup during a campaign, these pledges are done to your startup during a campaign, and some may pledges to buy the product for later delivery, give donations or qualify for a reward, such as a T-shirt.
- Apply to local angel-investor groups: An angel investor is a wealthy individual who is willing to invest in a growing company in lieu of shares in the company. There are groups of such high-net individuals in most metropolitan areas. You could also find individuals other than these groups which could be found in your area according to your startup profile. To find Indian Investor look into this website (https://bizztor.com/).
- Solicit venture-capital investors: These are professional investors; they have institutional money in qualified startups, usually with a proven business model, ready to scale. They are the sharks who look for big opportunities, Give them a warm introduction to make it work.
- Join a startup incubator or accelerator: These are organizations, and are very common and popular these days, and are often associated with major universities, community development organizations. Many provide seed funding as well including office facilities and consulting.
- Negotiate an advance from a strategic partner or customer: Find a strategic partner, a strategic partner might be a complimentary business or a major customer. The idea behind finding a strategic partner is search for someone that sees value in your idea and provide funds for royalty payments to complete your development.
- Trade equity or services for startup help: It is same like the bartering system from the old ages. You bartend your skills or something you have for something you need. An example would be negotiating free office space by agreeing support for the computer systems. For all the other office tenants.
- Seek a bank loan: There are banks which provide funds to new startups with legal formalities like normal backup requirements. In such a case you could put some assets that you are willing to put as a behalf of security.
There are many other creative ideas that are available to fulfill your dream. There is no point in waiting and not living your dream. Other than funding requirement your startup requires work and commitment on your part, so there is no magic in just getting the funding.