Startup Funding India

You are excited to start your own business, and you have a revolutionary idea that could change the world. You have done thorough research on the concept, and it's all set to be implemented except for a single problem - you don't know where to get business funding for your startup. The painstaking yet exciting journey from the inception of the idea to building a revenue-generating business needs a fuel named 'capital.' Startup funding is a significant hiccup faced by many young entrepreneurs in the country, and most business ideas fizzle out owing to a lack of funds.

There are many funding options in India to finance your startup. mymoneykarma brings you eight ways to fund your new business. You can go through them and adopt one that would suit your business the best. 

Bootstrap Your Business

Bootstrapping or self-funding is an age-old practice of getting your business started. Often, first-time entrepreneurs face difficulties in getting investors on-board as no one wants to take risks with first-timers. If you are a new entrepreneur, bootstrapping might be an excellent option to get your business started. There are fewer formalities involved, and you are much more invested in your startup. You should note that you can bootstrap your business only if the capital requirement is less at the beginning.

Choose Crowdfunding

Crowdfunding is another way of funding a startup that is gaining traction these days. It gathers contributions from the common public on open platforms. An entrepreneur has to put up a detailed description of his business on a crowdfunding platform and mention the goals of the startup and plans for making a profit, along with the funding amount required and reasons behind the requirement. With this approach, people can contribute money toward helping a business that they believe in. Crowdfunding can also generate interest in the venture, and hence it helps in marketing the product alongside financing. Remember that crowdfunding is a competitive place to earn funding. Therefore, if your business proposal is not rock solid, you may not find crowdfunding to work for you in the end.

Get Angel Investors For Your Startup

Angel investors are individuals or organizations with surplus cash and are keen to invest in promising startups. They often work in groups or networks so that they can collectively screen the proposals before investing. Apart from capital, they can also offer you mentoring or advice . Some of the most famous angel investors are Alibaba and Google. Angel investors invest in your company in exchange for equity. Indian Angel Network, Mumbai Angels, and Hyderabad Angels are a few of the famous angel investment groups in India that are known to fund many Indian startups.

Venture Capital For Your Business

Venture capitals are professionally managed funds invested in startups that are deemed to have tremendous potential. Venture capitalists (VCs) invest in your startup against equity and exit when there is an IPO or an acquisition. VCs provide expertise and mentorship apart from evaluating your business from a sustainability and feasibility point of view. A venture capital investment is appropriate for bigger startups that are beyond the startup phase and are already generating revenue. However, VCs are known to be impatient to recover their investment within a three-five year time period. If you have a product that can take longer to get going in the market, then it may be difficult for you to convince a venture-capital investor to fund your startup.

Get Your Funding From Business Incubators & Accelerators

You can also consider incubator and accelerator programs as your funding options. Incubators help provide initial assistance in the form of office space, financial backup, and mentorship programs. Accelerators offer similar support to more prominent startups to help them start revenue generation.

These programs typically run for 4-8 months and require commitment from you as a business owner. You will be able to connect with investors, mentors, and other fellow startups using such platforms.

Raise Funds By Winning Contests

You can participate in several contests organized by several industrial organizations to promote new entrepreneurial talent. In such contests, you either have to build a product idea or prepare a business plan. These competitions can get you media coverage and marketing exposure. Some of the popular contests in India are NASSCOM 10000 startups, Microsoft BizSpark, Conquest, Next BIG Idea Contest, and LetsIgnite.

Raise Money Through Bank Loans

Almost every bank in India offers finance for your startup through various programs. Leading Indian banks such as Bank Of Baroda, HDFC, ICICI, and Axis bank offer different options of collateral-free business loans. Moreover, personal loans can also aid you in setting up your business. You  can bank upon the financial expertise of mymoneykarma, where we not only take care of your loan application and disbursal but also guarantee affordable interest rates.

Opt For Govt Programs that Offer Startup Capital

You can also opt to register as a startup in the various schemes started by the Government of India. The Indian government had launched Rs 10,000 crores worth of Startup Fund in the Union Budget of 2014-15 to improve the startup ecosystem in India. To boost innovative products and companies, the government has launched the 'Bank Of Ideas and Innovations' program. Also, different states have come up with various programs, such as the Kerala State Self Entrepreneur Development Mission (KSSEDM), Maharashtra Centre for Entrepreneurship Development, and Rajasthan Startup Fest, to encourage innovative startups. If you meet the eligibility criteria, government grants could be one of the best funding options for your startup. You need to be aware of the various government initiatives to utilise them prudently.

To Sum Up

If you want your startup to grow fast, you probably need external sources of capital. If you bootstrap your enterprise but end up remaining without external funding for too long, your finances may fizzle out before your product or service takes off. While the plethora of funding options available may make it easier than ever for you to get started, it's also essential to invest in good accounting software and keep your finances in order.