How to Raise Money for your Startup?

In a business, flowing capital is always a welcome sight, no matter if you just took the flight or are in the field for 10 years. Capital is the petrol of the business, one needs it to maintain the smooth working of the company. 

For new entrepreneurs, who are trying to make it big in the market, funding arises as one of the biggest hurdles in the path of growth. Well, growth comes later, the problem of money starts haunting from the time when you frame your idea into a business plan. 

There are many factors which influence the fundraising capability of your business plan, like 

* Your idea 

* Presentation of business plan 

* Your approach towards your idea 

* Not pitching properly, 

and much more. 

It is a universal knowledge that 90% of the startups fail, and its most common reason is the incapability of entrepreneurs to raise funds for their startup. 

Let’s see how you can raise money for your startup. 

* Be an Investor Yourself 

It is always advisable for new entrepreneurs to not leave their day job during the initial stage. Your day job is the source where monthly liquidity is concerned. Indulge in your business in more ways than just being a CEO, be an investor yourself. When you invest your money into your business, you are more aware of the ‘drastic possibilities’. It will not only make you independent but disciplined also. 

* Angel Investors are your Angels 

Angel investors comprise of funders close to you. They can be anyone from your family members to your best friend. Angel investors are said to be one of the safest options for fund raising. But, entrepreneurs must keep in mind that borrowing a large amount of money from different angel investors is not advisable unless you are sure you could return their money back. Apart from money, relations lies on a stake as well. Borrow an amount which is needed to kick-start your startup, then skip to other funding options. 

* Crowdfunding  

Though crowdfunding is new, but it has become one of the most popular options for raising money for your startup. Crowdfunding, basically, is a virtual platform for both customers and borrowers. Here, entrepreneurs reach out to the crowd with the detailed description of their business goals, approaches, profit plans, why they need funding, etc. If the consumers find your idea authentic they will buy it. It is more like an effective donation camp. 

* Banks  Banks are always reluctant about funding startups because of their high failure rate, but since the revolution this world is witnessing in the form of startups, banks have opened their doors a few more inches. Where aforementioned all the options work best for funding, banks are still the safest option. 

There are two ways in which a bank finance a business: - 

Working Capital Loan: 

Working capital loan is used when an entrepreneur has to clear his wages, debts, etc. It is not applicable for long-term investments. 

Funding: 

Funding is what an entrepreneur need to kick-start his business. It includes all the paperwork, discussion of business plans, making banks believe that you’re capable of returning the loan, etc. 

Since the indulgence of ICICI bank, other banks are also opening up to the idea of funding startups and loosening a bit more towards them.    

“When looking for funding, don’t just look for cash. Look for the right people.” - Jodie Fox