Funding is OXYGEN for Startups
“The life of a startup is full of ups and downs, an emotional roller coaster ride that you can't quite imagine if you've spent your whole career in a corporation”, ~Harvey Mackay
The above quote is beautifully reflecting about the life of an entrepreneur. Whenever we hit up an idea and we want to pursue that idea giving it a form of business, it demands a lot of perceptions and perseverance to make it grow. Startups are the gem of the industry, they possess the innovation and have the ability to earn the country a good economic return in form of GDP and make India proud. As the ecosystem of startup is propelling, the economy of India is speeding-up and currently, India is the 3rd largest startup ecosystem in the world, thus, India is known as Startups-Hub. It is creating a golden platform of vast opportunities for the young minds to evolve with their innovative ideas. Young students who have a keen aspiring and ardent minds of learning and doing new things by innovation and renovation often establish startups to give their ideas a realistic look. Recently, India is having 98,119 entities of startups which are growing and developing itself alongside developing the country’s the economic scenario.
Why is funding significant for startups?
Starting and setting-up a business is not a cakewalk, but it is a laborious, cost intensive and labor-intensive job to grow into a successful business empire. Capital is the first and foremost thing a startup needs to operate their day-to-day work, because capital is the life-blood of a business. If you have the primary fund to set-up the basic formation of your business, it can reduce your stress alittle or else you need to revolve round the offices of the capitalists or banks for loans.
Business Capital is significant in many ways,
1) Funds help to expand your business further by setting-up luxurious offices or outlets by renting or leasing plots and buildings and hiring employees.
2) It safeguards your assets which you have used as the initial funding
3) Funding helps the startups to reach out their sale from local to a global level and earning a lucrative profit as turn-over.
4) When you want to increase the production level you will require a good amount to start operating the processes. A continuous flow of funding helps to grow your business by improving product quality, and customer satisfaction.
5) Helps to create a brand identity in the market and it builds the trust of its consumer by meeting the demanded quality of them.
6) A sound monetary support can help the business to have competitive edge in the market by using latest and trending technologies.
7) When you have ample amount of fund, you can use them for improvising the channels of marketing and promotion
8) Funds help in trying out new technologies for expanding & business further. Trying and testing brand new technologies need a lot of expertise and knowledge, so funding is very important to update your system according to the pace of science and technology to stay afloat in the market.
9) Funds play a vital role in upgrading team skills and knowledge through R&D.
With the progress of science and technology, new ideas and innovation are blooming and booming which needs strong support and funding for putting across their ideas to action. Expert brains and skillful hands are needed to be employed which need funding. So, before leaping into a new venture, you need to know all the available and trusted sources and ways to get required funding.
Different Types of Funding:
Business Loans: Whenever we plan to start our business, the first option of funding that comes to our mind is ‘business loan’. Nationalized banks are the abode of trust that offers different schemes of business loans at particular rate of return or interest. Now there are numerous options of private banks those are also offering a good rate of interest for startups. SBI, HDFC, ICICI are few notable names of business loan provider.
Crowd Funding: It is one of the most familiar and widely used options in funding. When a startup owner raises their capital through collective funding from their family, friends or other acquaintances and accumulates a pool of fund for their business, it is called as crowdfunding. Whenever an entrepreneur plans to launch or introduce a new product, they would need money to do thorough market survey, manufacture new prototypes, and send free trial packs to big sellers to bring their products to the limelight. Now, startup owners are leveraging technologies and using social media and networks for raising their required funding and promoting their product cost-effectively. Kickstarter, Indiegogo, and GoFundMe are among the renowned crowdfunding platforms.
Different Types of Crowd Funding are:
1) Donation Crowdfunding
2) Reward Crowdfunding
3) Equity Based Crowdfunding
SBA Loans: SBA is a federal government program that offers support to small business owners in the form of mentorship, workshops, counseling, and small business loans. SBA loans don’t come directly, but you need a local lender who provides SBA loans in order to access the funding. MUDRA is a government sponsored SBA loan for young businessmen in three segments, Shishu Loans upto 50,000, Kishor Loans that is ranging between 50,000 to 5 lakh and Tarun Loans ranging from 5 lakh to 10 Lakh.
Short-Term Loans: It is a small amount of money that has to be paid back within three to 18 months. This tool is used for emergencies, or to help companies take advantage of a business opportunity. Maximum Nationalised and private banks provide short term loans with high rate of interest.
Angel Investors: They are highly valued individuals who look to put relatively small amounts of money into startups, typically ranging from a few thousand dollars to as much as a million dollars. It is a widely used tool for entrepreneurs as crucial and emergency fundraising method. Owner of Tata Motors, Mr. Ratan Tata has been helping innumerable new ventures as an angel investor.
Venture Capital: It is an important source of funding for startups, for those with high growth potential. It is a form of private equity funding offered by the venture capitalists to small and unorganized companies or organizations. These venture capitalists provide capital through seed funding for a company’s initial operations, and growth capital, thus an overall growth of business in the industry. Kalaari Capital, Matrix Partners, Sequoia Capital, Blume Ventures and Elevation Capital are the top-rated venture capitalists across India. They are consistent in contributing on innovation and startups.
To be concluded, India has witnessed a wide range of diversified and unique startups and trend-setting setups that is influencing the whole scenario of Indian economy. Over a span of 10 years, India has become one of the top five platforms for startups in the world, competing with giant economies like the US, China, the UK, and Israel. Keeping aside the economic turmoil and uncertainty followed by the palpitating pandemic, the Indian startups have successfully raised $25 billion in 2022. Bangalore has been listed within the world’s 20 leading startup cities in the ‘2019 Startup Genome Project ranking’. It is also ranked as one of the world’s five fastest growing startup cities. Startups in the country have been able to create an estimated 40,000 new jobs over the years. It's hard to beat a person who never gives up, it’s very hard to ignore innovative ideas, and it’s too difficult to distance ourselves from trending startups.
The above quote is beautifully reflecting about the life of an entrepreneur. Whenever we hit up an idea and we want to pursue that idea giving it a form of business, it demands a lot of perceptions and perseverance to make it grow. Startups are the gem of the industry, they possess the innovation and have the ability to earn the country a good economic return in form of GDP and make India proud. As the ecosystem of startup is propelling, the economy of India is speeding-up and currently, India is the 3rd largest startup ecosystem in the world, thus, India is known as Startups-Hub. It is creating a golden platform of vast opportunities for the young minds to evolve with their innovative ideas. Young students who have a keen aspiring and ardent minds of learning and doing new things by innovation and renovation often establish startups to give their ideas a realistic look. Recently, India is having 98,119 entities of startups which are growing and developing itself alongside developing the country’s the economic scenario.
Why is funding significant for startups?
Starting and setting-up a business is not a cakewalk, but it is a laborious, cost intensive and labor-intensive job to grow into a successful business empire. Capital is the first and foremost thing a startup needs to operate their day-to-day work, because capital is the life-blood of a business. If you have the primary fund to set-up the basic formation of your business, it can reduce your stress alittle or else you need to revolve round the offices of the capitalists or banks for loans.
Business Capital is significant in many ways,
1) Funds help to expand your business further by setting-up luxurious offices or outlets by renting or leasing plots and buildings and hiring employees.
2) It safeguards your assets which you have used as the initial funding
3) Funding helps the startups to reach out their sale from local to a global level and earning a lucrative profit as turn-over.
4) When you want to increase the production level you will require a good amount to start operating the processes. A continuous flow of funding helps to grow your business by improving product quality, and customer satisfaction.
5) Helps to create a brand identity in the market and it builds the trust of its consumer by meeting the demanded quality of them.
6) A sound monetary support can help the business to have competitive edge in the market by using latest and trending technologies.
7) When you have ample amount of fund, you can use them for improvising the channels of marketing and promotion
8) Funds help in trying out new technologies for expanding & business further. Trying and testing brand new technologies need a lot of expertise and knowledge, so funding is very important to update your system according to the pace of science and technology to stay afloat in the market.
9) Funds play a vital role in upgrading team skills and knowledge through R&D.
With the progress of science and technology, new ideas and innovation are blooming and booming which needs strong support and funding for putting across their ideas to action. Expert brains and skillful hands are needed to be employed which need funding. So, before leaping into a new venture, you need to know all the available and trusted sources and ways to get required funding.
Different Types of Funding:
Business Loans: Whenever we plan to start our business, the first option of funding that comes to our mind is ‘business loan’. Nationalized banks are the abode of trust that offers different schemes of business loans at particular rate of return or interest. Now there are numerous options of private banks those are also offering a good rate of interest for startups. SBI, HDFC, ICICI are few notable names of business loan provider.
Crowd Funding: It is one of the most familiar and widely used options in funding. When a startup owner raises their capital through collective funding from their family, friends or other acquaintances and accumulates a pool of fund for their business, it is called as crowdfunding. Whenever an entrepreneur plans to launch or introduce a new product, they would need money to do thorough market survey, manufacture new prototypes, and send free trial packs to big sellers to bring their products to the limelight. Now, startup owners are leveraging technologies and using social media and networks for raising their required funding and promoting their product cost-effectively. Kickstarter, Indiegogo, and GoFundMe are among the renowned crowdfunding platforms.
Different Types of Crowd Funding are:
1) Donation Crowdfunding
2) Reward Crowdfunding
3) Equity Based Crowdfunding
SBA Loans: SBA is a federal government program that offers support to small business owners in the form of mentorship, workshops, counseling, and small business loans. SBA loans don’t come directly, but you need a local lender who provides SBA loans in order to access the funding. MUDRA is a government sponsored SBA loan for young businessmen in three segments, Shishu Loans upto 50,000, Kishor Loans that is ranging between 50,000 to 5 lakh and Tarun Loans ranging from 5 lakh to 10 Lakh.
Short-Term Loans: It is a small amount of money that has to be paid back within three to 18 months. This tool is used for emergencies, or to help companies take advantage of a business opportunity. Maximum Nationalised and private banks provide short term loans with high rate of interest.
Angel Investors: They are highly valued individuals who look to put relatively small amounts of money into startups, typically ranging from a few thousand dollars to as much as a million dollars. It is a widely used tool for entrepreneurs as crucial and emergency fundraising method. Owner of Tata Motors, Mr. Ratan Tata has been helping innumerable new ventures as an angel investor.
Venture Capital: It is an important source of funding for startups, for those with high growth potential. It is a form of private equity funding offered by the venture capitalists to small and unorganized companies or organizations. These venture capitalists provide capital through seed funding for a company’s initial operations, and growth capital, thus an overall growth of business in the industry. Kalaari Capital, Matrix Partners, Sequoia Capital, Blume Ventures and Elevation Capital are the top-rated venture capitalists across India. They are consistent in contributing on innovation and startups.
To be concluded, India has witnessed a wide range of diversified and unique startups and trend-setting setups that is influencing the whole scenario of Indian economy. Over a span of 10 years, India has become one of the top five platforms for startups in the world, competing with giant economies like the US, China, the UK, and Israel. Keeping aside the economic turmoil and uncertainty followed by the palpitating pandemic, the Indian startups have successfully raised $25 billion in 2022. Bangalore has been listed within the world’s 20 leading startup cities in the ‘2019 Startup Genome Project ranking’. It is also ranked as one of the world’s five fastest growing startup cities. Startups in the country have been able to create an estimated 40,000 new jobs over the years. It's hard to beat a person who never gives up, it’s very hard to ignore innovative ideas, and it’s too difficult to distance ourselves from trending startups.
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