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How To Raise Fund For Startups Funding?

According to a survey, more than 94 per cent of new firms fail in their first year. One of the most common reasons is a lack of funds. Money is the lifeblood of any company. The long, arduous, but fascinating path from idea to revenue-generating firm necessitates using cash as fuel. As a consequence, entrepreneurs question themselves, “how to raise fund for startups?” at each and every stage of their business.

The requirement of money is primarily defined by the character and design of your business. Nevertheless, if you’ve determined that you must raise funds, the following are some of the several financing options open to you.

Whether the startup is a small firm or a giant corporation, all businesses require funds to get started. Funding provides a solid foundation for your business objectives, allowing them to extend and grow. Finding capital for a startup firm can be a difficult and time-consuming endeavour. However, to answer how to raise funds for business start up, here is a list of crucial financing tactics that will assist you in obtaining funding.

Let’s Find Out How Startup Gets Funding

Various types of funding for startups are listed below:

Starting a business with bootstrapping

Self-funding, often known as bootstrapping, is an excellent approach to getting money for a startup, especially if you’re starting. First-time starters have a problem reserving capital without any traction and a plan for possible success. One can finance your cash or enlist the support of families and friends. It will be easy to increase due to more irregular courtesies and adherence and lower raising expenses. In most cases, relatives and friends are willing to work with you on the interest rate. Thus, it’s one of the simplest ways of how to raise fund for startups.

Identifying a Potential Angel Investor

Angel investors are individuals who have a surplus of capital and are interested in investing in fresh startups in India and throughout the world. Compared to loans supplied by financial institutions, the risk involved in these investments by Angel investors is more significant, as Angel investors plan to finance for increased profits. Indian Angel Network, Mumbai Angels and Hyderabad Angels are some of India’s most well-known angel investors. These investors can be contacted directly by startup entrepreneurs for funding aid. Thus, they answer how to raise funds for business start up.

Crowdfunding as a Source of Capital:

It is a fairly new form of financing a startup with much newly acquired traction. It’s the counterpart of getting a loan, pre-order, contribution, or investment from multiple people simultaneously.

It is how startup gets funding: An entrepreneur will use a crowdfunding platform to post a detailed description of his firm. Consumers can read about the business and donate money if they like the idea. He will state the aims of his firm, strategies for turning a profit, how much funding he needs and for what reasons, and so on.

Apply for Government-sponsored loans.

The Indian government has launched several loan schemes to assist startup businesses, MSMEs and SMEs, educated youth, women entrepreneurs, individuals from the reserved category, Small Scale Industries (SSIs), villages, and people living in rural and urban areas. The loan scheme (MUDRA) under the Pradhan Mantri Mudra Yojana (PMMY), Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE), Start up India, Atal Innovation Mission, Trade-related Entrepreneurship Assistance and Development (TREAD), Make in India, and other loan schemes launched by the Indian government to assist startup businesses include the MUDRA loan scheme under the Pradhan Mantri Mudra Yojana (PMMY), Stand-up India. It is an excellent option regarding how to raise fund for startups.

Obtain Venture Capital for Your Company

How to raise funds for business start up by venture capital? These funds are professionally handled funds that support in high-potential ideas of businesses. They often invest in a company with their own money and depart when it goes public or is acquired. VCs give knowledge and coaching, and serve as a litmus test for where the company is headed, assessing the company’s long-term viability and scalability. That’s not because of the money they bring but also network, operating experience and additional help with respect to the management coaching, access to events, etc. The main problem is that fundraising is challenging. It is an effect that two key statistics that we should be aware that less than 1% of all startups raise funds in the world. What does that mean? So let’s say we have one lab, which started with ideas. Only one in 1000 of them will get any forms in VCs. Now, out of those 1000, from the original one-lap pool, only 0.05% of them will receive any money from a VC or a venture capital firm, a more prominent organization that invests in larger check sizes.

So that means from that 1000, you only have about five startups that get VC funding. Thus, connects the founders and VCs in a single AI-driven platform. 

Microloans from NBFCs and MFIs are available.

It will be difficult to obtain loans from private or public sector banks if you are new to lending and do not have a financial history or credit score. You can receive business loans for your startup by contacting Non-Banking Financial Companies (NBFCs) and Micro Finance Institutions (MFIs) without having a credit score or financial history. When compared to PSU banks, the interest rates offered by NBFCS and MFIs are significantly higher. Thus, they can also help to answer how startup gets funding.

Loans are available from both private and public sector banks.

For startup businesses, banks are the preferred method of obtaining funds because they are more dependable and accessible. Term loans and working capital loans are two types of loans that are offered by banks to new businesses. These loans also help to answer how to raise fund for startups. Almost every Indian bank, both public and private, gives business loans to startups. However, the loan amount, interest rate and repayment term of each bank’s offers will differ.

How to raise funds for business start up by using business credit cards.

Since the emergence of startup businesses in recent years, the use of credit cards for commercial reasons has increased. If your company does not require vast sums of money in the early stages, you can utilise credit cards for transactions and clear the balance on time to prevent debt or additional interest rates paid in the form of penalties.


Hence, if you want to expand quickly, you’ll require outside funding. You may be unable to take advantage of market opportunities if you self-finance and stay without external funding for a comprehensive period. While the quantity of lending options may create boosting started simpler, innovative business entrepreneurs should consider how much financial support they require.

Here arrives, which can answer how to raise fund for startups. It a forum that helps young entrepreneurs raise funding by guiding them in the proper route. Here, they can look for potential investors, contact them, and receive the insights and contacts they need to pitch. As a result, there’s no reason to be concerned that any idea may fail. Simply come up with good ideas, and will assist you in pitching them to the appropriate investors.

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