Raising fund for startup is crucial for its growth. Lack of necessary funds is the number one reason for the failure of any startup. Funds act as a bloodline of any company. Almost every entrepreneur dreams a large revenue-generating business that needs something called capital. Every business requires funds at its every stage. In this infographic, we will discuss some realistic ways to raise funds for startup.
Steps To Raise Fund For Your Startup
Crowdfunding is an innovative way to fund your project. It is a way of asking more than one person for investment or contribution of money. Firstly, the entrepreneur provides a detailed description of his business plans and goals on a crowdfunding platform. He will also mention how much funding is needed for the business. Any person who gets interested in the business plan provides money to the company.
Bootstrapping is called self-funding. Like crowdfunding, it is also a great way to raise funds for a startup. Entrepreneurs often face many problems while raising funds for business at an early stage. Entrepreneurs can contribute money to business from their own savings. The number one advantage of Bootstrapping is that you do not have to rely on anyone to raise money for your business.
3) Bank Loan
Banks offer two types of funding for startups. First one is funding, and another is the working capital loan. Working Capital loan refers to an investment needed to operate a single complete cycle of revenue-generating services, where debtors and hypothecating stocks place the restrictions. Getting funds from the bank would require the normal process of describing business plan with valuation details and project report, which are necessary for getting the loan sanctioned.
4 Accelerators And Incubators
Accelerators and Incubators programs can be a suitable funding option for entrepreneurs. They are found in every major city and support hundreds of startups every year. Incubators and accelerators have some difference. Incubators nurture the company by offering tools, trading and network to the business. Accelerators help a business to take a giant leap in the market.
5 ) Venture Capital Firms
Venture capital firms (VCs) are the companies that invest in startups that they perceive to have a high potential. VCs generally invest in a startup against equity whenever there is an acquisition or an IPO. VCs offer mentorship, expertise and also tells how the organization is performing, assessing the business from the scalability and sustainability viewpoint. A VC may be suitable for businesses that have exceeded the startup phase and are now generating revenues.