Top Methods to Raise Funds for your Startup
You figure out the actual need of the fund timely and raise a fund using appropriate ways to take your business to the next level. iPhone app development company Malaysia can also provide you various ways to assess your needs to raise funds.
Perhaps you have a great idea for your startup, however, it needs capital. Gaining funds to build your startup is a real challenge, particularly when you have no idea from where to start. Choosing the incorrect way will not help you raise the necessary funds. There are many different choices to raise funds for your business like, bootstrapping, crowdfunding, angel investors and more. Bootstrapping is probably the right method prior to acquiring funds from outside sources, but it can be sometimes pretty complex.
The good news is that you can learn how to raise funds from other entrepreneurs in the industry and mostly, there are more choices than entrepreneurs realize. Nowadays, it is much easier to raise capital than before. Here are some ways that can help you raise funds for your startup:
Bootstrapping your own idea
Are you planning to launch your startup, but fund is a problem? Bootstrapping means self-funding, is a perfect way of financing, especially when you are a first-time entrepreneur. Since you have no work to show or a success record that can help you get investors; it is the most appropriate way to raise the fund. You can use your savings and also can ask your family and friends to contribute. There will not be any formality, so the process is also simple. You can collect funds by putting your and other members’ money together. Funding your own startup says a lot about your passion and it also impacts and generates more trust for your potential investors. It is a perfect way to raise funds and has a lot of benefits as well.
Crowdfunding is pretty popular nowadays to fund your startup. It is something like the loan, or investments from many people at the same time.
There are different kinds of crowdfunding. You need to identify and choose the perfect one for your business like rewards or equity-based crowdfunding. It is a great way to collect funds for startups or a company to develop new technology on a big scale. This method is comparatively less risky as you get finance to turn your idea into reality. This also helps motivate and build confidence in future investors to invest in your idea.
To raise a fund using crowdfunding you simply need to post about your idea, business on a crowdfunding platform including your business goals, future plans, the requirement of the fund, expenses, etc. And if people trust and like your business idea they can contribute money toward helping your business.
Angel investors are people who have a good amount of money and are willing to invest in startups. Also, they work and invest in groups. They can provide you advice as well along with the money.
Angel investors have already invested in many successful businesses and brands including Google, Yahoo and more. It is a good way to raise funds in initial stages of growth as investors expect up to 30% equity. It is true that venture capitalists invest more amount than Angel investors. In India, you can find Angel investors in different cities and places including Indian Angel Network, Mumbai Angels, Hyderabad Angels.
Get Venture Capital for your Business
It is a fund that is professionally managed to invest in startups with huge potential. They generally invest against equity. It is suitable for small businesses that are already producing revenues. Brands with a speedy growth such as Flipkart, Uber, etc using an exit strategy can get tens of millions of dollars which they can invest in their company to grow faster.
Venture Capitalists recovers their investment in a short period of time; they can stretch it to a maximum of three- to five-year.
Raise Funds by Winning Contests
This is also an awesome opportunity for fundraising. It supports businesses to launch their ideas. Also, when you win the competitions, you also get popular, which helps in the growth of your business. You just need to ensure that you have developed an amazing product to win the contest. You can also effectively present your idea.
Raise Money through Bank Loans
It is a very common way to fund your business. The bank offers 2 types of financing for your businesses including – working capital loan, and funding. Working Capital loan is the loan amount needed to complete a cycle of revenue-generating operations. Stocks and debtors decide the limit of the loan amount. To process it, you need to share your business plan with the valuation details, with the bank.
Get Business Loans from Microfinance Providers or NBFCs
If you think you are not eligible for bank loans, NBFCs are for you. Microfinance providers offer financial support to those who cannot access banking services. It is appropriate for those whose needs are limited and credit ratings not favored by the bank.
For faster growth, you certainly need outside sources of capital. For the starting, bootstrap is good; however, you cannot rely on it for long. You figure out the actual need of the fund timely and raise a fund using appropriate ways to take your business to the next level. iPhone app development company Malaysia can also provide you various ways to assess your needs to raise funds.