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Rahul Gupta

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5 Ways to Raise Capital for Your Startup

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You know, what's the best feeling other than love? A COOL Startup Idea! I've recently experienced this feeling and been working on it with a bag full of zeal.

The growing trend of startups and all these million dollar ideas are taking over the industry with a storm. However, having an idea isn't just enough to change the world. You need to have a financial stronghold or capital as they say.

So, if you're into startups and wanting to follow the footsteps of becoming a successful Entrepreneur, then here are some useful tips that you can keep in mind while raising the much-needed funding for your startup.

But before moving to the main discussion here's a thing that I would to like share with you. There is a significant difference between the ideology of an Entrepreneur, and the VC's and Investors. We guys try to run a company, grow it, and make successful tools and applications for people, while investors just want to redeem higher profits from the investments that they've made in the startup ideas.

See, barking for hours in various Fundraisers and Idea Events would fuel your company with the capital that you need. However, raising the necessary fund isn't that tough. So, Step into the shoes of an upcoming CEO and acknowledge yourself with the top 7 ways to raise funding for your startup.

  • Get Funded from an Incubator or Accelerator

Most of the startup companies nowadays are a part of Incubators, and alone the Silicon Valley is home to tonnes of such Business Accelerators and Incubators. This kind of programs assists hundreds of different startups to grow in a successfully running business.

However, these terms differ a lot with their meanings. Incubators the usually nurture the ideas and the teams working on them as their children and provide growth, network, shelter, resources, and much more from the mentors. On the other hand, Accelerators help the companies to take a giant leap in the profit growths and margins.

They usually run for 6-8 months and require a lot of hard work and commitment. Those who get in the big games are required to give a percentage of their shares to the owners or so.

  • Bootstrapping

The term bootstrapping or better known as Self-Funding is still the best and most reliable way to finance a startup, especially if you’re at initial stages. People or specifically, the First Timers often struggle to get the necessary fund for their idea before showcasing any substantial chances of growth to the capitalists. Bootstrapping is mostly done by using your own or family’s savings for necessary expenditures. You can also ask your friends and co-workers, as they are usually flexible with the interest and time. It is considered as the first prioritised option because at the end; it’s your money that you are investing. However, if you need much more than you already have, then the upcoming ways are easily considerable.

  • Crowdfunding

A new and interactive to market and exposing your product to the customers is by raising the capital from Crowdfunding. For the past 2-3 years, Crowdfunding is becoming a popular amongst the young, enthusiastic ideologists to fund their upcoming company. It’s like taking the loan, receive donation or such from many people online or through a dedicated platform.

Moreover, it has other benefits too. The contributor also takes interest in your product, and you somehow manage to market the product along with financing it. Crowdfunding for your startup is a great way to know, whether the user would be interested in using it or not. However, it is a competitive place as most of the startups are following the similar footsteps. So, you better be ready with your kickass idea and great presentation to influence the Internet.

  • Getting Angel Investment

Angel Investors are usually the guys with loads of money and surplus assets with a keen interest in entrepreneurship and upcoming startup ideas. Most of the investors are usually the groups of some successful businessmen who also guide and mentor the startups

Most of the Fortune 500 companies like Google, Yahoo and Alibaba were initially backed up by angel investors and the funder expects a share of usually 20-30% equity in the business shares and profits. But it also has a downside as well; the Angel Investors generally fund small amounts of capital, and therefore multiple series funding is carried out nowadays.

  • Get Venture Capital for Your Business

These types of funding are leading reasons behind all those “Million Dollar Deals” breaking news in the tech industry, as it is the place where you make the big bets. VC or Venture Capitals are full-fledged professional funds which finance the ideas and companies with a lot of potential in growth and revenue. VCs provide funding in exchange for the equity and usually offer mentorship, expertise and passively evaluate the business from its sustainability and scalability.

It’s the most renowned method of reaching to the top but surely requires firm dedication, commitment, and revolutionary idea that can be easily marketed. The big cards like Flipkart, Uber and many more companies are perfect examples of a venture capital funding.

However, some of these ideas are not once considered good enough and then are paid in bulk for that failure product. You can always try the Bank & the new SME loans, Funding Contests, and much more. Take the example of WhatsApp, a whopping $ 19 Billion deal with Facebook. The point is you don’t have to quit or stop looking for the suitable capital investment.

Do share your thoughts on these ideas, and let me know if you’re aware of any other interesting idea in the comment section below. Cheers!