5 Ways to Raise Funding For a Startup

By | 26th December 2017

5 Easiest Source Of Startup Funding

Now a day young generation is interested in starting their own business and be their own boss. It's wonderful because at least they are doing something new apart from the rat race of getting jobs. One of the crucial stage for a startup is getting funds, you have to convince the investor that your idea is going to break all the rules and it is totally going to change the market.

Investors aren't going to put their money on the stake on your simple idea if you haven't validated your idea or product.
You have to ask yourself different questions like, 

Is this the thing that people want? 

or

Are people really going to buy it? 

You have to make the investors believe that you have surveyed n number of people out of which m number of people are excited about our product and they can't wait to buy it.
Though funding doesn't always mean bringing capital from outside investors there are a lot of different ways you can generate capital for your startup.

So let's start our today's article journey of Startup Funding.

1. Bootstrapping

I or normally any intelligent person would recommend you to invest your own savings in the beginning, until and unless you don't need a huge capital, invest your own money. The benefit of this is, if somehow you failed, you're not indebted to other people money. You had an idea, excitement and executed it and got the results.
If you fail Thank GOD that you've got one more opportunity. I would like to quote Henry Ford's words
Failing is simply an opportunity to begin again, this time more intelligently.
So the first source of capital (I like the word capital because it sounds cool) is Bootstrapping, which means that you're going to invest your personal savings.

2. Friends and Family

Another help would obviously come from people around you which are your friends and family. Because when an entrepreneur has an idea and he wants to morph it into a business nobody believes him except his friends and family members. So this is the good source of capital. Obviously, you wouldn't pay the taxes to your friends or family
as normally until they ask you 😀 as compared to if you take a loan from banks etc.
I think another advantage is "You don't have to return the money in a limited period" if for some reasons you don't earn profit for some time, and you tell them
they would understand and would cooperate with you.

3.Crowdfunding

Crowdfunding is becoming one of the most popular ways of getting capital for your startup. This is like getting a loan from the public.
So this is how it works "Entrepreneur puts his business description, his strategy for the business, the vision S/he has and the funding the S/he needs on a
crowdfunding platform and people those are interested funds them by preordering or donating the money". One main advantage of this method is you get to market your product or service alongside capital. This ensures the entrepreneur that people are interested in the product and after the launch, they are going to get the sales.
Cons of this method is this method is becoming highly competitive So until and unless your idea isn't capable enough to lure the people by just reading description you
won't get funding but never lose hope.

NOTE: I'm making a sequence for sources of funding for startups, this is a proven and best sequence a startup could adapt for funding.

4. Banks

Banks are the suitable source of capital for a person who has something to be kept as security in exchange for money. They charge a fixed amount of interest, and most importantly
they will not get to say in your managerial activities. But if you don't have something to be kept as collateral you can choose other options.

Read more: Steps for a loan appraisal.

5.Angel Investment

When an individual person invests in a business by acquiring shares or other methods it is called angel investment and the investor is called Angel Investors. These are
the people who like to invest in startups having long-term growth. As you may have heard that Peter Thiel (founder of PayPal) was the first Angel Investor of Facebook.

I hope now you have enough knowledge about Startup Funding.

Please leave your comments in the comment section below. 

Finally

 

Thanks for reading

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