Do you have an amazing idea for a start-up? Have you found yourself stuck at the question of getting money for that idea? Then, my friend, you can stop fretting right here and right now because here we have a list of ways for funding your start-up!
Being the absolutely bizarre person that I am, I’ve had a multitude of ideas about having a start-up but being the absolutely broke person that I am, those plans and ideas don’t really last that long.
My plans and ideas may just be silly outcomes that my brain makes up when it is bored but I’m sure that for many of you out there, the idea of having a start-up is stuff made out of dreams.
So for all you aspiring entrepreneurs out there who are struggling with the idea of money, here are a list of the options that you could take a look at for funding your start-up!
Bootstrapping refers to using your own saved up money for funding your enterprise. I know, I know. It might seem impossible and even may be impractical for a lot of you out there but trust me when I say it is one of the best options that you have.
I personally think that this is a great way of funding your start-up because a- you are not answerable to anybody and b- you have more freedom in the way you work and use your funds. You won’t have to explain yourself every time you need money to work on your startup.
All the freedom regarding everything about your enterprise lies with you. You literally build your start-up from scratch, fund it, market it to the world at large and become the sole-recipient of all profits.
Bootstrapping may seem pretty tough and complicated. But if you want to have the maximum level of freedom and the minimum level of external pressure, then saving money and bootstrapping your start-up is the way to go.
Crowdfunding is probably one of the most millennial ways that you could opt for to fund your start-up. It has been gaining a lot of popularity lately.
So what happens in crowdfunding is that you put up all the details of your business like your business-type, goals, ways your business will earn a profit, etc., on a crowdfunding platform. Interested consumers who are attracted by your idea choose to invest money in your start-up.
Not only will you get the funds you need, but your investors may also choose to pre-order as well as market your product or service. Sounds amazing, doesn’t it?
However, there is one minor shortcoming of crowdfunding your start-up. There tends to be a lot of competition on such platforms.
Everybody, right from small investors to established companies, put forth their ideas for crowdfunding. Your idea will have to be really good and has to generate a lot of buzz to gain the fund you need.
How much ever-competitive this might seem, you should definitely check it out. Some of the really good crowdfunding platforms are Indiegogo, Wishberry and Fundlined. Do give these platforms a shot because this is a shot that you can take.
An angel investor is a person who provides capital for a business start-up. They usually provide support to budding entrepreneurs who don’t have much funding backing them up.
Most angel investors are highly trained and have a good amount of knowledge of how the business world works. Hence, they may actually help you in broadening your own knowledge of how a business should work.
Another major benefit of angel investors is that you do not need to necessarily pay back the capital that they invest. This makes them a much less risky option than, say, taking a loan from the bank.
One drawback here, however, is that angel investors do not only invest, they also claim a stake of ownership in your enterprise. They become part-owners. Angel investors will have a say in the functioning of the company and also gain a part of the profits.
So as you can see, angel investors have their pros as well as cons. So it’s up to you to decide if this is your pick for funding your start-up.
Incubator/ Accelerator programs
One of the other funding options that are gaining a lot of popularity is incubator and accelerator programs. In today’s world, these programs help over a hundred start-ups every year.
Such programs provide great assistance and also work towards nurturing businesses in their start-up phase. They provide you with everything right from mentorship and business advice to physical locations for the business and of course, funds.
For all you budding entrepreneurs out there, not only is this a way for funding your start-up, but it also helps you broaden your knowledge about the world of business.
Some of the incubator/ accelerator programs that you should consider getting into are Amity Innovation Incubator, TLabs and Startup Village.
With the assistance and guidance that they provide, trust me, you could do marvels way beyond just funding your start-up.
Government programs for funding your start-up
The government actually encourages the setting up of various start-ups within our own country. Hence, there are a lot of facilities through which you can gain funds via the government.
Under the Start-up India program, the Government created the ‘Fund of Funds for Start-ups (FFS) with a corpus of INR 10,000 crore to provide funding for Start-ups. Funding will be sanctioned for the entrepreneurs who cross the preliminary screening that is conducted.
Various state governments have also been taking initiative in providing funds for start-ups. The Government of Kerala, the Government of Uttar Pradesh and the Government of Bihar have set aside a fund for financing start-ups.
Availing these provisions provided by the government is also a pretty good choice. It could help you kick-start your business journey.
Taking loans for funding your start-up
This may be the last option on the list but it is for sure the first option that comes to mind when you think of starting a business.
A lot of banks offer finance for small and medium enterprises through various programs. All you will need to do is submit your business plan and project report to the bank you decide to take your loan from.
They will study the documents you submit and will provide you with the loan that you’ve asked for on that basis.
Here’s hoping that this write-up gave you a better idea of the ways you could fund your start-up. Make sure that you explore all the options before picking one that is best suited for you.
Once you pick the perfect option for funding your start-up, there is nothing stopping you from speeding into the world of business.
All the best, fellas!
So, you want to go ahead with Project Management? Check out our article on the same!