Looking for how to raise capital for a startup?
I got all you need to know about it.
A recent report by Tie says that 15 percent of startups have stopped operations due to covid while 44 per cent have cash for less than six months.
The pandemic started just when they were about to start the fundraising phase. Therefore, it is a difficult time for startups.
Tips for raising capital for a Startup
- Have a good knowledge of your business
- Innovative and creative idea
- Clear and concise message
- Powerful sayings are more effective than PowerPoint.
- Instead of going with just an idea, get you online company registration done. It will increase the investors trust in you and prove them you are serious about the idea.
Now let us discuss the sources from where you can raise funds for your business.
Crowdfunding refers to publicly presenting its business plan, includes profit, loss plan, marketing strategy, etc., to raise funds. The business grows by collecting the funds.
2. Angel investors
Such investors help them in the initial days of the company.
It is a group of people who cooperate in the business of a startup. It also helps in investing and operating the fund as well. Instead, they ask for good returns or a share in the ownership and, it is a bit risky.
3. Startup India
When you search for how to raise capital for a startup, you will see Startup India in the top results.
This initiative was first launched on August 15, 2015, to boost the morale of Indian youth and start businesses.
If you have a good idea to start a business, generate employment, then you can apply for Startup India.
You can also collect funds for your business through this scheme run by the Prime Minister. The objective of the Startup scheme is to provide funds to the startup youth through the bank so that their start can be powerful and brilliant. Income is tax-free for three years.
4. Credit Loan:
It is a fund given by banks or financial institutions, usually to companies or government institutions. It can also be a way for startups to raise funds. Interest is paid only on the amount withdrawn. The amount can retrieve later if required. Many industries can take it for import-export and for setting up and changing business in other countries.
5. Society scheme:
It is a scheme run by a mutual group, in which people collect money and give it to a needy and then that person returns it little by little after month. It has the advantage that the one who needs money does not have to go to a moneylender and pay hefty interest.
It is a challenging time not only for the commoner but also for the startups. As a result, it has become necessary for the new business to know how to raise capital for a startup.
As a result, startup founders are grappling with dwindling demand and liquidity. Also, at this point, customers are re-evaluating or postponing their buying decisions.
Therefore, the startups need to stay focused and grow cautiously. Also, they need to revise their strategy of raising funds.
Competition for angel and venture capital has increased. The result of a recession is that the funding decision cycle has expanded and, funding is generally short.
Above all, the focus on Zoom calls is more. Therefore, it has become necessary to grab the investor's attention as quickly as possible.