1.Bootstrapping your startup
Bootstrapping is also known as self-funding for your startup it is an easy and effective way of financing without showing some transaction as you invest your own money as capital and plan for potential success. Investing from your own savings or can get contribution from your family and friends
It will be easy to raise funds due to less formalities and less cost of operations in raising the funds for your startup. It should be considered as a first funding option because you invest your own money in your business. Bootstrapping is suitable to accomplish initial requirements of the startup and may not be good option if your startup needs funds from day one. It is also beneficial for fulfilling small operational/tool requirements of the business.
Crowd funding is the newer and easier way to raise funds for startup. It is like taking a loan, contribution, pre-order or investment from more than single individual at the same time and now a day investors have a keen interest to invest in multiple of startups through public contribution.
How working of a Crowd Funding proceeds?
An Entrepreneur will put up a detailed description of his startup on a crowd funding platform and mentioning the goals of his startup , plans for making profit and how much funding his/her startup needs and mentioning the reason for raising the funds .Then investors will read the information and can invest their money if they like the business idea.
The best thing about Crowd funding is that it can also generate interest in general public and help in marketing the business along with financing. it can cut professional investors , brokers by approaching the general public for funding. It also might attract venture capital investment firms.
Angel Investors is an individual who provide capital for business/startup, they are surplus with ash and have a keen interest in investing in upcoming startup and business ideas. They also provide mentoring or device alongside capital. Many huge startups go helped in the beginning by angel investors including google, Alibaba.com , and yahoo these investments generally occurs in the early stage of growth of startup with investor expecting up to 30% of the equity shares of the business
List of popular Angel Investors in India.
- Indian Angel Network
- Mumbai Angel
- Hyderabad Angel
Also check out the list of individual Angel Investors in India , some of these Startup Inventions have connected many startups to their Angel investor successfully.
4.Incubator And Accelerators
This process is best for early stage businesses for funding option. Every year hundreds of startups got assistance through these investors there are fundamental difference between these two terms opportunity, incubators are like a parent to business or startup ,which who nurture the business provide shelter tools, training and networks to a business, incubator help/assist nurture a Startup to walk, whereas accelerator help to run/take a giant leap.
These programs run for 9 to 5 months and require commitment of time from the owner of the business. You will also be able to widen your network and make good connections with your mentor, investor and other fellow startups.
5.Funding from Bank Loans
It is most common option for getting funds by paying certain amount of interest. Usually, bank is the first place that comes to the mind of entrepreneur when thinking about funding. The bank provides two kinds of Financing for businesses. One is working capital loan and other is funding.
Working capital loan is the loan required to generate revenue through operations or carry out operations and the limit is usually decided by hypothecating stocks and debtors. Funding from Bank would involve the normal process of sharing the business plan and the valuation details, along with the project report based on which the loan is sanctioned.