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Planning to launch your own start-up? Now is the time. India is in its best ever phase of startup ecosystem and the economic environment is favoring the aspiring minds. However, careful planning and futuristic approach are imperative to ensure your startup don’t end like the 94% that shut down their shutters within the first year of operation.

Funding is an extremely significant aspect in line with meeting the vision of a business. Funding and fundraising, both are fundamental modern business scenarios that support the growth of a startup. The first round of funding, popularly known as seed funding forms the basis of fundraising. It is followed by series A, B and C rounds of funding. While the seed funding typically refers to the basic, initial round of funding, series A, B, and C differ in the business maturity and the type of investors involved. The series funding helps in the evolvement of a startup to a full-fledged organization by helping it with calculated funds at crucial steps.

Here are a few successful startup funding options in India that will help you support your business with the indispensable finance requirements.

Go for Crowdfunding

The concept of crowdfunding is quite similar to mutual funds on a basic level. In this option, more than one investor is involved and they offer a fixed amount of money based on your business idea, goal, plan of action, and plans of making a profit. All you need to have are people who truly believe in your business idea.

Crowdfunding is gaining popularity as it ascertains the belief that your idea is also believed by other experienced players in the market. Crowdfunding also helps you in getting the crucial funds from the idea stage itself. You can gather crowdfunding from friends, family, and entrepreneurs who believe in your business concept and have the means to come together and fund your aspiration.

Consider Self-funding

Popularly known as bootstrapping, it is an ideal plan of action when it is hard to convince others of your business idea and vision. Often investors ask for traction before making an investment, the initial round of self-funding allows you to prove the feasibility of your idea and build confidence in the investors for a further round of funding.

Bootstrapping is a great idea for startup funding especially if the initial business requirement is small. It also gives you the freedom of being your own boss. You’re not answerable to anyone and it allows you to keep an eye on the revenue earnings as well.

Get in touch with the Venture Capitalists

A sure shot destination for big bets, venture capitalists offer you professionally managed funds who are looking for startups that have success potential. The best part about venture capital investments is the expertise and monitoring that they bring along. Ordinarily, VCs invest in equity and once the business releases its IPO or is acquired, they leave.

Venture Capitalists usually look for startups with a good enough traction and a strong team. But if you’re opting for venture capital funding, be flexible enough to take their inputs and accept the close monitoring.

Try Angel Investment

There are individuals with surplus cash looking for investing in promising startups and earn their share once it grows to its potential. They can either work alone or collectively in a network to screen startups with huge potential. This funding option has business minds looking to earn interest out of your success and they may expect as high as 30% equity as well.

Although angel investment comes with its issues of high-interest expectations and lesser investments as compared to Venture capitalists; it is important to remember that Google, Yahoo, and even Alibaba were a result of Angel investing.

Conclusion

Funding is required to take the best advantage of the existing and upcoming market opportunities. Even if you initially go for bootstrapping, outside funding is required to sustain in the long run.

70% of Indian new businesses will run out of cash in under 3 months An overabundance to tie down extra capital in the coming a long time to guide through the Covid pandemic, as per an industry report. 70% of new businesses in India, home to one of the world’s biggest startup biological systems, have under a quarter of a year of money runway in the bank, and another 22% have enough to scarcely make it to the furthest limit of the year, as indicated by a review directed by industry body Nasscom. Just 8% of new businesses that took an interest in Nasscom’s review said they had enough cash to make due for over nine months. 90% of new companies said they were confronting a decrease in incomes, while 30 to 40% said they were incidentally stopping their tasks or were currently shutting down. As new businesses stand up to exceptional occasions, many are considering finding a way to remain above water. About 54% of somewhere in the range of 250 respondents said they were hoping to rotate to new business openings, and 40% said they needed to broaden into development verticals, for example, medical care. The money crunch comes as financial specialists on the planet’s second biggest web market become mindful about composing new checks to youthful firms. In an open letter a month ago, a few unmistakable VC reserves cautioned new businesses that they may discover it particularly testing to bring new capital up in the following not many months. For certain new businesses, there are different variables at play, as well. Over 69% of business-to-business new companies, particularly those working in retail and fintech classes, state in the report that they are confronting delays in installments from their customers. This has left the greater part of such new businesses to implement pay cuts, decrease their advertising spends, and a fourth of them to change to a cheaper seller to set aside cash. New companies working in vehicle and travel areas are additionally seriously affected, with 78% of respondents saying they were reevaluating their plans of action and tweaking their items as per the current situation. In a call with correspondents on Tuesday, heads at Oyo disclosed new advances the spending dwelling startup had taken at its inns to guarantee security for administrators and clients. They additionally said they were trusting that New Delhi and state governments would permit more individuals to travel and remain at lodgings once more. More than 66% of new companies additionally said they were searching for arrangements that facilitated guidelines and spike government buys. Numerous likewise mentioned help in assessments for a couple of years. More than 66% of Indian new companies accept the effect of Covid will wait for as long as a year. (Nasscom) Recently, India declared a $266 billion improvement bundle to help resuscitate the slowed down economy. On Saturday, Indian Finance Minister Nirmala Sitharaman said that new businesses excessively will have the option to get to a portion of this help — however subtleties stay meager on how they should go about it. Since 2017, India’s startup environment has developed reliably. A year ago, new companies in the nation raised a record $14.5 billion. “Out of nowhere, this prospering development adventure has abruptly been hit by a barricade… the COVID detour. There is no nation, business or living being that has not been influenced by the COVID pandemic. While governments have been working industriously to secure and spare living souls, organizations have been hit and independent ventures and new companies have been the most influenced,” said Debjani Ghosh, President of Nasscom, in the report.

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Startup Funding Options in India

70% of Indian startups will run out of money in less than 3 months