This is the age of entrepreneurship. Because of the penetration of the internet in the people, businesses are getting online. New startups are being launched every day with innovative ideas.
But ideas and creativity itself will not get your startup long run. You need to make money out of it.
Every day startups get closed because of a cash crunch. It is very important for a business to make its ground to earn a considerable amount of money otherwise you will be wiped out.
What if you are not earning money till now? That’s OK because most of the startups in their early stages do not make money. Actually, they bear losses.
They first make their ground and then start to make money. But to sustain you need money.
If you started a business, these are the sources by which you might raise funds for your startup.
1.) Friends and family
In the earliest age of your startup, it would be very difficult to raise funds for it. What you can do is that you can ask people in your family to donate or lend money for your startup.
If your startup gets failed, they will not kill you.
You can ask your friends to invest money in your business because it would be very hard to donate money as a friend for business.
You can offer equity to your friend in exchange for money.
2.) Bank Loan
If you think you would make money very early then you can approach a bank with your idea to get a loan.
If you are already making money then it is a big plus point because you can get money from the bank without diluting any equity.
3.) Venture Capital
Venture Capital is a private investment firm which invests in startups and businesses.
Venture Capital firms have invested in top companies like Paytm, Flipkart, etc. So they would not hesitate in investing in your business if your idea and team are capable of becoming big.
Obviously, you have to dilute your equity in exchange for money or take the money as debt which is known as debt financing.
4.) Angel Investors
Angel investor is an individual who invests in startups and businesses in exchange for equity or convertible debt.
Angel investing is becoming popular in India because of investors who gain multiple times in their investments in companies such as OYO.
If nothing is happening you can just ask money from common people. But, How? There are several platforms like Indegogo, Kickstarter, etc where you can raise money online for a specific purpose by offering different privileges such as products, services or anything. In some countries, equity-based crowdfunding is not legal but in the United States, you can raise funds by crowdfunding by offering equity.
You may get disappointments in raising money but remember, standing and steadfastness will only improve your chances rather than giving up.
You need to first think of an idea to be worthy enough to get funding from Angel investors or Venture Capital as they are very strict when it comes to ideas for a startup.
The more unique and healthy your idea is the better the chances to get funding.