Finding Funds / Investment for your Startup is no child'd play. Although we hear many news as to Funding taking place daily, ask them for a change when they started to find one . Very few lucky ones would reply in terms of Months. Others may have spent years in search of an Investor , before they made news for their Startup. No Worries, this although not simple is never impossible. We here have tried to discuss some ideas , rather avenues through which your Startup can sort to acquire funds.
1. Bootstrapping / Self Funding Method :
This is no way rather to fund your Startup, its as good as self funding. Why then too we mention it here is that some Banks or Financial Institutions would take this as a measure to find out how much you yourself as a Founder have invested in your Startup. It minimizes the risk for the investor to a certain extent and also builds a level of confidence depicting your commitment towards your own Startup business. It is one of the most risky avenues as it may turn out that you may altogether not recover much from your own investment, as a worst case scenario.
2. Fiscal Incentives & Loans [ MUDRA LOANS ] for Micro Units / MSME's
To signify the stage of growth / development and funding needs of the beneficiary micro unit / entrepreneur and also provide a reference point for the next phase of graduation / growth to look forward to, the Government Of INDIA, through MUDRA offers incentives through these interventions:
> Shishu : covering loans upto 50,000/-
> Kishor : covering loans above 50,000/- and upto 5 lakh
> Tarun : covering loans above 5 lakh and upto 10 lakh
Generally, loans upto 10 lakh issued by banks under Micro Small Enterprises is given without collaterals.
3. Microloans by Banking & Other Such Lending Institutions :
Generally , microloans are a smaller version of business loans offered to promising Startups / Companies with showing good amount of initial profits or revenues. Some Banks / Lending Institutions offer such Micro Loans even without a line of credit . The drawback here is that such microloans may have higher interest rates or shorter payment terms.
4. Accelerators :
Today, there are many Startup Accelerators who besides mentoring , also provides financing. Basically, there is a process of selection where startups must apply to an accelerator to be eligible in first case. Then there are certain challenges such as what business model & revenue forecasts they possess etc. Once selected , Startups get many such benefits as mentoring, training & even financing from such Accelerators.
Although there are many more sources of funding such as Venture capitalists, Angel Investors , but out main purpose to share this few was to see to it that once your Startup scales up & grows, you’ll become eligible for more investment opportunities & in meantime, use your creative energy to take advantage of the various funding options available for both individuals and startup businesses today..