How to Raise Start-up Capital for Your Business: Top 10 funding options for 2020

  • Bootstrapping Your Own Startup Business:
  • Crowd-Funding: Next Newest Funding Options:
  • Look for Angel Investors:
  • Look for Angel Investors:
  • Look for Business Incubators & Accelerators
  • Take part in Winning Contests:
  • Raise Money Through Bank Loans:
  • Business Loans From Microfinance Providers or Non-Banking Financial Corporations are corporations (NBFCs):
  • Government Programs That Offer Startup Capital:
  • Other ways to raise your capitals:
  • Next Step:
  • Bootstrapping Your Own Startup Business:
  • Funds can easily be accessed
  • Zero bureaucratic obstacles
  • Flexible due date and interest rates
  • You don’t dilute your ownership
  • Control Over Direction
  • Personal risk
  • Suitable only if your requirement is small i.e. self-financing works only for small-scale start-up business; don’t work for large businesses.
  • Crowd-Funding: Next Newest Funding Options:
  • There’s not much financial risk
  • Your campaign could go viral
  • A successful campaign may validate your business idea
  • You keep all of your equity
  • You can build your own business or can tap into any existing community
  • It takes time and money
  • Your campaign might not succeed
  • Someone could steal your idea
  • It doesn’t work for all businesses like catering or painting
  • The pressure is on
  • Look for Angel Investors :
  • An Angel Investor is willing to take a Risk
  • Money is not a Loan; that indicates if your business falls flat, an angel investor would not expect you to pay back.
  • Offer mentorship alongside capital for startups
  • They are willing to take risks as they anticipate heavy returns back on investing in a new startup.
  • It might Set the Bar Higher
  • You Aren’t in Full Control
  • Provide lower investment capital
  • Look for Venture Capitalist:
  • Unlimited access to financial aid
  • Credibility and integrity
  • Connections & networking in the business community
  • Corporate expertise
  • Added resources such as active support to deal with critical issues like handling tax and legal matters
  • Debt reduction
  • Accelerated growth
  • Clash of management
  • Micromanagement
  • The uncertainty of the funding duration
  • Profit share
  • Lack of right growth structures and strategies
  • Time-consuming
  • No reliability
  • Look for Business Incubators & Accelerators:
  • Provide a free or low-cost workspace
  • Offer business development programming (workshops and panel discussions)
  • Networking with fellow startups
  • Giving up a chunk of your company
  • Aligning business needs with incubator needs
  • Lots of must-attend events
  • Take part in Winning Contests:
  • Provides opportunities for networking with connections that may be valuable in the future to the venture
  • Gain Social Followers
  • Provide an opportunity to interact with your customers
  • Distraction from focusing on product and customer development
  • Opportunity cost
  • Focus on investors, not customers
  • Raise Money Through Bank Loans:
  • You will have all the money to start your business
  • You can retain ownership
  • You can protect personal wealth
  • They can be hard to qualify for
  • These loans can restrict cash flow
  • Your credit might be put at risk
  • Business Loans From Microfinance Providers or Non-Banking Financial Corporations are corporations (NBFCs):
  • Provide loans and credit facilities
  • Trade-in money market instruments
  • Can do wealth management (managing portfolios of stocks and shares)
  • Can underwrite stock and shares
  • Cannot accept demand deposits
  • It is not a part of the payment and settlement system, so it cannot issue cheques drawn to itself.
  • Government Programs That Offer Startup Capital:
  • Free money
  • Less pressure
  • Narrow focus
  • It can consume a lot of time, patience and energy
  • Other ways to raise your capitals:
  1. How do I fund a business with no money?
  1. Can you get funding with just an idea?
  1. What is Goods and Service Tax (GST)?
  1. Which authority will levy and administer GST?
  1. Is Your Business Ready For GST?
  1. How do I get funding for a nonprofit organization?
  • Fees for goods and/or services
  • Corporate contributions
  • Government grants and contracts
  • Interest from investments

--

--

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store