Every entrepreneur required some financial startup support in an initial phase. According to a global Study, over 90% of new business fail during the first year or six months due to lack of fundings. To help you, we are providing in this article best Funding Option For Startup. Money is the most important parameter in any startups or business.
Business is the journey from idea to revenue generation; startup and capital are the blood for business. That’s why every entrepreneur search for investors or funding options in his initial phase of startup. Every stage One Question you asking for self can I get fundings from anyone?
When you required money you need to find ways to raise funds. Below, we have mention Best fundings option for a startup that will help you to get finance or funding.
Best Funding Option For Small Business, Startup and Entrepreneurs:
A self-funding is one of the ways you can just start your business. Self-funding also known as bootstrapping. In the initial stage, startups have lots of problems regarding getting finance. So in an initial condition, you can invest from your family or savings that you might have. If you have a good friend circle then you can arrange capital for the initial stage of startup because this will be easy to raise the capital due to few rules and formalities. Another important factor about fund from the family and friends; they are flexible with the interest rate. Self-funding will be considered as the first step towards the successes.
When you invest your own money in startup or business, then you are bonding to business. But in some business money or capital needed from the first day of business, the investment in it also too large that your self-funding is not sufficient. In such condition, self-funding is not a good option.
2.Get Funding From Accelerators or Incubators:
New businesses cloud consider Accelerator and Incubators as one the best funding option as and these programs organize in all major cities. The main difference between Accelerator and Incubators is that the Incubators are like someone who helps you from the very basics, they nurture a business to take its own stands and the Accelerators are helps a startup which already has its own setup so that they can give them boost and accelerate their growing speed.
If you get the funding from these sources usually they required 4-months commitment time from your business.
Which one is best Accelerators or Incubators?
If your business is a very basic level then Incubators will best and easy option for you. It does not mean that you shouldn’t go to Accelerators. If your business is well settled then go for accelerators
In India, some famous examples are Villgro, Amity Innovation Incubator, Startup village and CIIE, IAN Business.
Crowdfunding is one of the ways of funding that a startup should think about it. The name indicates all the meaning of the funding, it is like taking a loan or contribution from more than one person.
How does crowdfunding work?
Businessman or entrepreneur put all information of his idea to one of the platforms which provided by Crowdfunders. An entrepreneur will describe all those things like a goal of the business, how much funding is required, how much money is making from this business, etc. all parameters present to the investors or consumers after long thinking they decided to give money or not. Anyone can contribute or help your business if they really believe in your idea.
4. Angel Investor:
Startup companies looking for fundings at the initial condition. If we are mentioning best funding options for entrepreneurs, it will not complete without the option Angel Investor.
What are angel investors?
Angel Investor is the group or individual who invests his own money on startup or in an idea. In traditional investment methods, people invest money for better returns on his capital. But nowadays in the market, so many young people are investing in the good ideas, so that lack of money or financial issues will not be the cause of shutting down the good idea.
What is the role of angel investors?
- Angel investor support the company in an initial or difficult stage.
- Advice and guidance to startups for better achievements.
- Participate actively in the investment process.
- Judgment on your Startup.
Which Parameter have Angel Investors looks in startups?
- A great Idea
- Talented Team
- Team Work
- Focus on goals.
Types of Angel Investors?
- Grouped Angels
- Friends & Family Angel
- Domain Angel
- Super Angel
- Colleague Angel
- Fellow-Entrepreneur Angel
- Financial Angel
Few Angel Investors in India You May Like To Contact:
- Hyderabad Angels Investor
- Mumbai Angels
- Indian Angels
5. Venture Capital Funding or VC Funding:
The venture capital financing is one of the easy option or source of the funding. Venture capital provides funds and investment in startups and small business those having huge potential. These people who invest the money or capital are called Venture capitalists (VCs). Venture capital funding mostly gets from the well-known investor, financial institution, investment banks.
Following Examples of Venture Capitalists in India
- Sequoia Capital
- Helion Venture
- Accel Partners
- Kalaari Capital
- Bessemer Ventures
- Sequoia Capital.
6. Funding From Contest:
In your mind, the first question comes when you see the word Contest; What is it?
I would like to tell you briefly on that, actually, these contests arrange for entrepreneurs in all over the world. These contests help to optimize the golden opportunities for fundraising. It helps to increases the confidence and encouragement to the entrepreneurs for his ideas so they can set up their own business. In such a contest, you learn a lot of things about your product and business.
You should make your project strong and stand out in competition. In this contest, you will present your idea in front of the group of persons. You and your team should capable to convince anyone that your idea is worth investing in. It may be the best funding option for startup if your idea strong enough.
One key point of winning the contest or competition where you get media coverage that is a kind of branding. It would help you with your brand creation for your product.
Examples of popular startups contest in India
- Microsoft Bizspark
- Won hot 100 Startup Awards
- NASSCOM’S 1000 startups
- Lets Ignite
- Next Big Idea Contest
7. Get Capital Through Bank Loan:
Whenever an entrepreneur thinks first time for his startup the first question comes into his mind. Will I get the loan from the bank? and similar lots of questions come in his mind regarding bank loan from the documentation to the return policies.
So don’t worry about it here we explain the main types of bank loan.
Type of bank loans:
- Working Capital Loan
- Funding Capital Loan
Working capital Loan:
This type of loan provided by banks to the loan holder on basis of one complete cycle of revenue generation on his project. Limit of the loan depends on project valuation.
Funding Capital Loan: In this loan type entrepreneur present valuation details and business plan to the bank.
Also, you need to provide a project report and after all those parameters seen by respective banks, they will sanction a loan.
In India following banks provide loan on various programs:
- Yes Bank
- Bank Of Baroda
Here we are concluding this article, as we also went through these steps we know how difficult is to raise a fund for startup. Hope you have got a fair idea about the funding options that are available for small business and startups. Still, you feel something you want to know more let us know in the comment section below. Thanks for reading this article and share it with your friends on social media. Visit our website for more Startup, SEO and Digital Marketing Tips. Like us on Facebook and follow us on Instagram and Twitter.