Bootstrapping
Angel Investment
Early Employees
Startup India
A
bootstrapping means providing initial funds to startup with your own
savings and investment. At bootstrapping startup is at the idea stage.
So it is very difficult to raise a fund for startup, as everything is on
paper. Bootstrapping is an easy and fast solution at the initial stage
as no paperwork or legal formality required.
Co-founder
A
second stage of startup funding could be co-founder stage. In this
stage, you need to find out co-founder. You can approach your friend or
relatives who can become a co-founder and does half of the work. In
addition to that co-founder is also responsible for providing funding
for your startup. It is like offering 50% partnership of your business.
Family and Friend
Seeking
funds from family and friend is another easy way of startup funding.
Family and friends have two options they can either offers fund on
behalf of equity holding in the startup or they can provide funding as a
loan.
A
third stage/round of your startup funding is Angle Investment. This
round is popularly known as a seed round. Under this round, Angle
investor makes an investment in your startup with the exchange of
ownership or equity rights. There are multiple websites to find out
angel investor for your startup funding.
Venture Capital Early Employees
Your
first few employees might be interested in gambling on your company by
accepting a low salary package along with stock option. You can take
funding from your early employees on behalf of the stock option.
Loans from NBFCs
After
A Series of funding, a startup can even go for a loan from NBFC
(NonBanking Financial company). NBFC offers loan which you need to repay
along with interest amount in decided time frame. If you don’t have
access to NBFC you can contact Microfinance Institute also.
Startup
India campaign is launched by Narendra Modi led government. This
program is launched to support new entrepreneur for launching an own
startup. In order to get benefit of startup India your startup needs to
fulfill certain criterion such as providing innovative products,
turnover should not exceed 25 Cr etc. You need to register at startup India website in order to get a benefit of startup funding.
Crowdfunding
Crowdfunding
as name indicate it is a way to raise fund from a crowd (multiple
people). The crowdfunding happens online via social media and
crowdfunding platforms. Crowdfunding can be debt base, equity base or
donation based.
Incubators
Incubator
is the name given to enclosed apparatus used for keeping a premature
baby. Similarly in startup Incubator is institutions that provide space
and other equipment required for the success of a startup. They provide
funding and guidance to the startup project.
Accelerators
Accelerators
are responsible for the growth of a startup. They provide mentorship,
guidance, funding and office space to the startup. They are similar to
incubators sometimes term accelerator and incubators are used
interchangeably.
Credit Card
You
can use your credit card to purchase initial equipment and other office
setup for the startup. You can use a credit card for a business that
gives additional cashback and reward benefit to you. Make sure that you
repay the amount in the time to avoid interest burden.
Mortgage Assets
One
of the least preferred ways by the startup for raise funding is
mortgage assets such as property, equity, fixed deposit to get the loan
for a startup. You need to repay the debt in order to release your asset
placed for a mortgage.
IPO
IPO
is an advanced stage of raising startup funding. If you go for IPO,
anyone in the world can become your investor. You need Investor bankers
to do paperwork and sell equity stock on behalf of your company.
Loans by Bank
If
you need a loan for the business expansion you can approach the bank.
You need to submit a formal application at bank applying for a loan.
Based on credit history and eligibility of income proof document bank
will offer you a loan for the business.
Over to you –
If
you are planning to launch a startup and looking for money the 15 ideas
of startup funding mentioned above will surely help you.
If
you have any queries in raising fund for your startup, feel free to
post it in the comment section. I will be happy to answer those in
detail.
