Four ways you can raise money for your startup

Funding is key to startups’ success. From seed funding to business loans, here are the easiest ways in which startups can raise money

Many of us have a startup idea. Some of them might even be successful if we implement them. However, most of us stop short of building on the idea simply because we do not have the funds to turn our startup idea into a business. The right funding is crucial for a startup and can single-handedly make or break it. On that note, let us explore startup fundraising and see how to get financing for your startup.

1. Seed funding for startups

A seed funding campaign can introduce your startups to angel investors. Angel investors are individuals who back a startup financially in its initial days. They invest in startups in exchange for equity or convertible debt. They provide startup funding when normal investors do not have enough data or confidence to back up a startup.

Finding an angel investor for your startup is often the best thing that could happen to your startup, as it might provide proper financing that could remove a lot of roadblocks. At the same time, you should do your research before choosing an angel investor offer too. This is because the investor could have a say in the company after investment, and their ideals and goals should match your way of doing the business.

2. Crowdfunding

As the name suggests, crowdfunding is a method of startup fundraising where a small amount of money is collected from several people. According to the type of crowdfunding, this money could come in the form of a donation or as an exchange for equity in the company. You can take the help of startup investing platforms to launch a crowdfunding campaign. Through this, your idea or startup will reach investors who want to invest in Indian startups, and you will get the fund you need.

3. Self-funding your startup

If you have a lump sum big enough to spend on your startup, you could consider financing it yourself. This means that the equities of your company remain with you. This can also ensure you have more liberty to make decisions related to the company. If you have a partner or partners in the business, self-financing your startup becomes a little bit easier. This way, there could be more sources of money without relying on another investor.

4. Business loans

Business loans are an excellent way to finance your startup without relying on anyone else. Some banks offer loans to help you get started. This way, the ownership of the company remains with you.

If your business need is more immediate like availing cloud services or subscribing for google ads , you could rely on business credit cards as well. They work just like regular credit cards but for your business. You can choose this option if you have enough turnover to pay back bills on time. A business credit card is a good option even if you do not have urgent money needs. This is because business and the economy can often get unpredictable, and a credit card can protect your business at times of urgent need.

If you have already established your startup idea and investor funding, you might want to scale your business. Working Capital solution from IDFC FIRST Bank is uniquely designed to support you through your growth journey with lending up to Rs. 5 Crores without any physical collateral.

The economic survey 2021-22 report said that the number of new startup registrations in India rose to over 14,000 in 2021-22 from a mere 733 in 2016-17. As of June 2022, there are more than 72,000 recognized startups in India. This only increases the competition and securing money for your business becomes more important. Ensure you use one of the above methods to raise capital before it is too late.

Disclaimer

The contents of this article/infographic/picture/video are meant solely for information purposes. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject IDFC FIRST Bank or its affiliates to any licensing or registration requirements. IDFC FIRST Bank shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.