How to raise funding for a start-up in India 

“Chase the vision, not the money; the money will end up following you.”  –Tony Hsieh, Zappos CEO.

90% of Indian startups fail to make it past the first year of their inception. The lack of funding is one of the most prominent challenges startups face, followed by a lack of innovation and tough competition from western companies. 

A successful startup knows when it requires funding and how much they need. Over-funding can also lead to failure. Once you have realized the need for funding, start with these five steps to raise money for your startup business. All the best! 

  • Bootstrapping. The first round of funding should ideally come from your own pocket. You can also borrow money from friends and family for the initial financing because investors need to see some traction before investing in your start-up. With self-funding, you have lesser formalities and challenges. Remember, the size of your company matters when it comes to bootstrapping. Some startups may require money from day one, and in that case, self-funding will not be sufficient.  

  • Crowdfunding. Crowdfunding is the 21st century way to fund your business. You can put up your request on a crowdfunding platform, and people may either pre-order, loan, or invest in your business. To make an appealing case, you must: describe your business, talk about your goals, state the amount you need, and why your business deserves to be funded. Try platforms like Indiegogo: Crowdfund Innovations & Support Entrepreneurs for India or GoFundMe: #1 Fundraising Platform for Crowdfunding for the USA.

  • Angel investor. An angel investor is an individual who has the means and interest to fund your business. They can also act as mentors and guides and are interested in helping to grow your business. Angel investors have funded Google, Alibaba, and many big companies. Tap into your business network to find a suitable partner for you. 

  • Enter business competitions. There have been a lot of competitions for aspiring entrepreneurs to shine in. It is an excellent opportunity for startups to bring the company to market and win funds without wasting money on advertising, pitching, etc. Here is a link for upcoming events: Events & Competitions  

  • Venture capital. Venture capital is when you need big funding and know that your company has the potential to succeed. Venture capital funds are professionally managed, and they scrutinize the company and vet the entrepreneur before making an investment. You must be careful when approaching a VC because their primary motivation is to earn a profit, and their patience will start waning within three to five years.

Your startup funding can be used for any purpose that takes your business from the ideation phase to the successful running of the company. Most people think of venture capital when they think of startup funding. But for a sustainable venture, you must explore all your available options first.