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Startup Funding

Updated on: Nov 21st, 2023

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4 min read

As the whole world seems abuzz with the word ‘startup’, the popular concept today has gained a hallmark prominence across nations. The total number of startups is rising in developed economies and emerging markets alike. So it is safe to say that this bandwagon is set to become the alpha of industries. startup funding   Talking of economies, India is not new to the startup concept and infact, it has been totally deluged by the trend in the past few years. The last decade has witnessed some major startups disrupting the conventional corporate scene in India. There’s no denying ‘startup’ the idea, is a million dollar baby, but can’t say it is as easy for every startup to survive in the big sea. In India, almost every fortnight when a new startup gears up to begin operations, another one bites the dust. Ever wondered what compels some startups to take a such colossal step? Funding! Mostly. Launching a startup is definitely something to take pride in. It is an absolute advantage if your creation is innovative and self-motivated, but when it is ready to take off you have to see that it is satisfactorily funded. Startup funding can actually be a herculean task, especially in the beginning when your venture may need funding for more than a couple of rounds. Unless you consistently make profits for a good six to seven months, it’s hard to deal with payoffs, operations and other utilities without having sufficient cash flow. This is when funding helps you in operating smoothly and successfully.

Startup Funding: 7 Ways to fund-start your venture

1. Angel investors

At the very nascent stage of your startup, the first on your to-do list is looking for angel investors. These investors are the first few people who will listen to your pitch. On foreseeing a promising association, they will also invest in the idea. Angel investors do not invest a very big amount but they also don’t get into the technicalities of the venture.

2. Venture capitalists

As the name suggests, venture capitalists are investors who lend money only upon liking a business model and after contemplating prospects. Usually, venture capitalists invest in a lump sum and are known for expecting high returns.

3. Business incubators

As you know, every industry today has programmes called business incubators to assist startups with proper financing and training when they are merely starting out. The programmes consist of industry experts serving as mentors-cum-investors to help entrepreneurs understand the current growth trends.

4. Friends and family

What could be better than your own family or friends investing money in your idea. This, in fact, is said to be one of the safest and the most reliable ways of all the other fundings as the one lending you the money knows you enough to put their trust in you. Besides, you always have them by your side.

5. Crowdfunding

A very popular type of fundraising, crowdfunding is opted by a number of startups today. Certain websites are dedicated to collecting investments from a host of investors just so they can help budding startups in setting up their business.

6. Government Loan Schemes

The government has introduced various loan schemes to help startups. These schemes provide collateral-free debt to aspiring startups and facilitate them to gain access to low-cost capital.

7. Grants

This type of funding typically applies to businesses operating in the research and development process. Grants are offered to them by the government because most of these startups are run and regulated by the government itself. All that being said, every entrepreneur should envisage the pros and cons of their idea before they lay it on the ground. A good funding will help a startup go a long way without losing balance.

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Quick Summary

Startups are gaining relevance globally. India, too, is witnessing a surge in startup culture. Funding is crucial for startup survival. Various ways include angel investors, venture capitalists, incubators, friends/family, crowdfunding, govt. loan schemes, and grants. Important to weigh pros and cons before proceeding.

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