Have you ever wondered what are the ways to Fundraising for your startup? Well, if not, it is something to think about. India is a country with a lot of potential for Startup Funding. 62.4% of our total populs is youth. Imagine if this number starts working on their own to make something better of this society, how quickly we will have one of the best, smart working populations. But that isn’t the point. The point is, for this population to put up to its potential, they need proper backing. And this backing is startup funding. There are various ways for getting Fundraising. Let’s take a look at them:
Top 4 Fundraising Options For Startup:
Generally, angel investors invest in companies in exchange for equity stakes in those companies. These investments are high-risk, high-return investments. To make a profit, investors are looking for startups with high growth potential.
However, this term encompasses a vast range of investors. An investor could offer funding as a one-time investment or as-needed. It is possible for investors to be involved in the startup’s operation or remain in the background. Some specialize in work within a particular field or in businesses in a specific location. Even a friend or relative who is exceptionally wealthy can become an angel investor.
The term Venture Capital (VC) refers to a type of private equity that is given to startups that have long-term growth potential. Investors pool their money to create these professionally managed funds and invest in promising startups. Emerging companies looking forward to future success or existing ones seeking expansion are turning to it as their go-to source.
The business plan that you submit to secure venture capital investments should include the same type of information that angel investors are looking for. The due diligence process begins after an introductory meeting with venture capitalists to explain the business proposal. To determine if a business is suitable for investment, venture capitalists ask a series of questions. Venture capitalists offer a term sheet after completing a legal review, which is the basis for an investment agreement.
An incredibly wide network of people can contribute to crowdfunding via contributions trickling in from start-ups, projects, and other ventures. Fundraising can be an effective strategy for securing investors.
In addition to businesspeople and investors, this model is also suitable for friends, family, customers, and shareholders. There are many online crowdfunding platforms available in India for startups and growing businesses like Kickstarter, Ketto, Milaap, Wishberry, InnoPitch, Crowdera, GoFundMe, etc.
Initial Public Offering
Private companies open their shares to the public through an Initial Public Offering (IPO). IPOs are the only way for companies to be publicly listed and traded on stock exchanges. An investor can purchase a company’s shares directly from the company, so it is beneficial to both the company and the investor.
A well-established, well-trusted company can expand its operations into other markets or domains. Any startup seeking to raise money for their ventures must complete an IPO. By sharing the rewards with the public, it is an ideal method to raise capital to meet the long-term goals of the company. Establishing an IPO requires a number of requirements and formalities, but it is advantageous for startups that have high recorded profits and are regarded as reputable.
Consultants, bankers, and brokers experienced in IPO registration and allotment can guide you through the intricate procedure.