Mastering the Art of Startup Fundraisin
Any new startup needs Funds, Investment, and grants to convert their idea into reality. The entrepreneur circle offers a diverse range of funding options with its own set of advantages and considerations. There are various ways to raise funds Bootstrapping, Venture Capitalism, Incubators, Angel Investors, and Government Funds like Seed Funding are present in the Entrepreneur System to help new Startups grow and flourish in their journey.
Bootstrapping
It is the most common entrepreneurial way to raise funds for the business. The director or the owner can use their Savings and Profit from the initial stage of the business. This kind of fund allows the directors to use them in the most controlled way, allowing them to take on a zero-debt system. As it has its advantages it also comes with its disadvantages as few innovative ideas need a big number of investments to grow in such cases, Bootstrapping does not always work as a backbone support. It works as a resourceful net and perseverance through the ground stage with little to no budget for small startups.
Funds from Friends and family
To grow any idea into reality the entrepreneur can rely on personal assets but can also on friends and family who put their trust in the idea of the startup. The funds provided by friends and family are in the form of friendly terms and patent capital. These funds mix personal relationships into a professional manner. It isn't easy to handle these agreements in a very intellectual and professional manner. Handling all the funds with transparency and communication lead technique can create a sense of growth with personal bonds of relationship without any risk.
Seed Funding & Angel Investors
When any startup grows it comes to a stage where it is mandatorily required for it to acquire funds and grants to move to the next level of the process. In this case, the government-initiated project is Seed funding and Angel Investors come into Play.
Seed funding often comes from Angel investors or crowdfunding. It is a needed investment to scale the operations for the process of production and reaching the market. In the case of Indian investors, it provides financial support with value added in the experience of extensive network and maintenance skills for younger entrepreneurs. The government of India has recognized that any startup needs funds and grants to grow and make their ideas. For the same reason, the government has launched a few initiatives as the Seed Funding initiative to support new entrepreneurs as the Startup India Seed Fund Scheme (SISFS) launched in 2021 to provide financial assistance from 20 lacs to 50 lacks through various Incubators across India. For the startups to acquire Seed funding there is a criterion of being recognized by DPIIT with a business idea that is unique and innovative for the betterment of the economic growth and environmental factors. Other than the Startup India Seed Fund Scheme (SISFS) the government has other Seed funding programs as the Technology Development Board (TDB), Department of Biotechnology (DBT), Ministry of Micro, Small and Medium Enterprises (MSME) this provide Seed funding to new startups in sectors of Technology, Biotech and MSME startups.
Venture capitals
Venture capital is a form of private equity funds that are provided by different Firms as a form of funds for new startups at an early stage or for a startup at an emerging point that needs high growth and potential. The Government of India does not directly manage capital funds like Venture capitalist firms but has a significant role in providing venture capital to the startup culture.
Funds of fund schemes such as India Aspiration Fund (IAF) launched in 2015, SIDBI Fund of Funds for Startups (FFS), IFCI Venture Capital Funds Ltd, SEBI Regulations, and Tax incentives, that provide a supporting ecosystem in terms of Startup India Initiative & Atal Innovation Mission which are the flagship initiative providing an environment for startups to generate funding, mentorship and infrastructure. This initiative promotes innovation and entrepreneurship through various programs like Atal Incubators and Atal Tinkering Labs.
Venture capital plays a very important role in the entrepreneurship circle providing funds and a supporting environment for innovative startups that have the potential to help the industry grow and shape the future.
Incubators and Accelerators
Funds, Investments, and capital help are not the only services needed by startups they also need Nurturing, Mentorship, and community to go smoothly on an entrepreneur's journey. Incubators and Accelerators provide a structured environment to help in the early stage of the company with various resources such as Workspace, Mentorship, and experienced entrepreneurs with key business Skills, Workshops, and networking opportunities with various potential investors and partners. All Incubators and Accelerators do not provide Seed funding or capital investment but provide help in Accelerating the Development, Redefining the business model, and providing the connection with the entrepreneur circle for support and growth.
Crowdfunding
The new trend of Crowdfunding has emerged as a reckon within the entrepreneurial system it provides access to capitals that enable startups and entrepreneurs to tap into and leverage the support of Myriad individuals. Platforms such as Kickstarter and Indiegogo enable the entrepreneur to share their idea and pre-sell the products in the market to raise funds within a circle to create a sense of belief in the idea. Crowdfunding is working as a great force of monetary funds that it also provides marketing opportunities to support the idea and create a sense of excitement in the society helping in the creation of loyal and dedicated early adopters for the new product or services by the entrepreneur's business.
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