Best ways for Entrepreneurs to Raise Funding For Startups

Funding for startups

Are you looking to raise funding for startups and scale it? In Today Startup Ecosystem there are many ways you can raise funds either in the form of Debt or Just by diluting the equity of your company.
Debt will lead to a 100% risk for you only and also a high-interest rate but taking money from Angel Investors will lower your risk and it will be divided between you & your investors.
So long story short, both will bear profit and loss together.

So there are many ways you can raise fund for your startup
3.Angel Investors
4.Venture Capital
5.Crowdfunding Campaign

So let’s discuss in detail so you can apply this to grow your business.

1.Bootstrapping for Startup

This option is available to each and everyone who is aspiring to be an entrepreneur. Bootstrapping in simple terms means using your own money (It can be Savings) and building your company from scratch without outside money.
To risk your personal savings and investing in your startup initially without taking cash from anyone can be difficult.
But you see most of the successful companies are bootstrapped and to scale it you can go for angel funding round and onboard investors to invest in startups
Apple, Facebook, Microsoft, Reliance, Ola, Oyo, Paytm all started with little or no money



Read this To Know more about How to start a startup


If you don’t have personal savings then you can opt for a loan, which is of different types like,

  • Small Business Loan (From banks)-Initially, in the early stage, it can be difficult to avail the loan i.e low chance of qualifying and there are many types like Term loans and Asset-based Loans
  • Using Credit Cards-You can use your personal credit or just apply for a business credit card which will take time but there are a high-interest rate and annual fees.
  • Line of Credit-This is better than using a credit card because the interest rate will be charged on the amount you are using and rest can be kept in a bank.
    (Eg. You apply for 2 lakh rupees if you need just 1 lakh for that instant you can simply use it without getting charged on full loan amount)

Get loan for startup


3.Angel Investors

If your startup has a business plan and pitch deck ready for pitching then you can raise funds through them.
Angel Investors can be anyone who has a net worth more than $1million, and they generally operate alone or groups of 2 or 3 together operate and invest.
This round is also known as seed funding round in which you dilute your share of the company for money. It can be any percentage(%) angel investors are demanding or simply you can negotiate with them.

Angel investors can be any wealthy individuals who can be found online on any website or through reference or in any startup meeting.

Visit Startup India to learn and find angel investors and also find Venture Capital Investors.
What do they see in startups?

  • Founder Enthusiasm towards idea/product/service.
  • The chemistry between the founding team member
  • A Solid Business Plan and Target Market Size
  • Viable Exit Strategy
  • Prefer Early-stage startups

Angel Investor

4.Venture Capital

Venture capital (VC) is a firm that takes the money from wealthy individuals or large companies looking to invest their capital into new businesses.
This funding for startups also is known as Series A Funding which is raised by small or medium-sized companies.
Some of the top VC firms are listed below-

  • Sequoia Capital (Funded Zomato, Practo, Justdial)
  • Tiger Global
  • Lightspeed venture partners
  • Accel Partners ( Funded Myntra, Bookmyshow, Flipkart)
  • Index Ventures
  • Andreessen Horowitz
  • GGV Capital

So Venture capital Includes Seed, Early Stage, Mid Stage, and later Stage and sees long term growth potentials.

There are various funding round involved-

1.Series A (used for marketing and helping the business grow)
2.Series B (helps the business in paying salaries and hiring more staff)
3.Series C ( helps to prepare the company for an acquisition)
4.IPO (Initial Public Offering)


5.Crowdfunding Campaign

The crowdfunding process in which you raise funds or investment from a large number of people instead of taking the high value of funds through a small number of people.
There are many types of crowdfunding like-

  • Equity Crowdfunding –In this, you raise funds and give them a stake of your company
  • Donation Crowdfunding- In this, you raise funds without giving them stake or return to the investor & it applies to NPO.
  • Debt Crowdfunding In this, if you’re unable to take a loan from banks you can use this and take a loan from an investor or peers by giving them back at a particular interest rate at the agreed point.
    Rewards-based Crowdfunding
    You must be familiar with this if you do not reach 100% of your funding campaign goal the campaign is considered to be failed and you will not receive any of the funds.

Crowdfunding Campaign new


Golden Tip– Before Running Out of Money, Start Meeting Investors 7-8 Months before. The Reason is it takes Minimum 3-4 Months for the transaction of Money or Fund for your startup.

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