Start-ups are the New Thing in the Corporate World

The Indian start-up ecosystem is expected to hit 11,500 by 2020, from 3,100 in 2014, says an article published in TNW News in July 2015. Start-ups are booming thanks to the ease of setting up business in India and various ways to finance it. Finance is one tool that keeps the engine of entrepreneurship running in all its stages.

5 Ways to Fund Your Start-up Idea

Banks and financial companies have also come with business friendly products that aim to fulfil the needs of an enterprise at various stages. Business loans in India can be taken to set up shop, to fund a project, for expansion and other purposes. Here are some of ways to raise funds for your start-up:

1.      Self-Financing – Also known as bootstrapping, it is possibly one of the first options that might come to your mind. Investing your own money gives you complete ownership, while saving you from the burden of loans. However, you might not be able to raise as large an amount as you can via other sources. It is also wise to save some money in an emergency fund.

2.      Angel Investing – Angel investors are experienced individuals with surplus cash who may invest in your start-up in return of some equity share. They may act as a mentor and have a say in your business decision-making, guiding you with their experience.

3.      Ventures Capitalists – Venture capitalists are organisations or individuals who invest huge sums of money in start-ups in return of ownership stake in the business. You need to have a business strategy ready to showcase to such investors to put forward a strong case.

4.      Crowdfunding – Crowdfunding refers to raising money through various individuals by propagating your start-up idea. In other words, you ask a lot of people for small amounts of money, which then accumulates into a big sum. Social media is one of the most popular crowdfunding channels today. However, you may have to go through a lot of legal paperwork and you not get any tax benefits.

5.      Banks loans – Although a loan may sound like a burden at first, it is considered to be one of the most profitable ways of raising money for your business because of the many advantages that it offers. You can raise a significant amount of money through a business loan in India. Moreover, you have a flexible repayment window and the ownership rights of your business remain intact. You may also avail tax benefits on interest payments on business loans in India.