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3 Best Funding Options To Raise Start-up Capital
10 December, 2021
Finance is perhaps the backbone of any startup business. Sufficient funds allow you to grow your business without hindrance and fulfill short-term goals.
Since India has the third-largest startup ecosystem in the world, it’s evident that business ideas in the country are abundant. But is there enough wealth to support these businesses? An IBM study shows that 90% of startups fail in India. Various factors contribute to the fall of these companies like weak leadership, improper planning, management issues, and so on, however, getting funding is also a challenge that is faced by new entrepreneurs.
Most businesses in India rely on venture capitalists or personal savings to keep their businesses afloat. However, there are various other cash flow verticals that are lesser-known but equally as effective. If you are looking for ways to fund your startup then read on!
Here are the best funding options to raise start-up capital.
Startup India Seed Fund Scheme (SISFS)
The Startup India Seed Fund Scheme (SISFS) is a support system created by the Department for Promotion of Industry and Internal Trade (DPIIT) to help startups source seed funding. The scheme is set to assist an estimated 3600 entrepreneurs in their endeavors. It, however, has a set of eligibility criteria that a startup has to clear.
Angel investments is a funding method where an individual invests in a company to earn interest/profit on their investments. Once the company reaches its potential and brings in ROI, these individuals reap a high return on their investments. They are a lot similar to venture capitalists who invest in early-stage startups, generally, after the Angel Investors have exited.
Companies like Google, Yahoo, and Alibaba are some prime examples that benefitted from Angel investments. Some of the renowned angel investors include names like Kunal Shah, Ratan Tata, and Sahil Barua.
Loan Against Securities
A lesser-known but potential tool that can bring in an abundant source of money is a product called Loan Against Securities or LAS. This product allows a trader/investor to avail a loan against their portfolio. What’s best is that once a loan against shares or other securities is availed, it can be easily repaid flexibly with no prepayment penalties and at low-interest rates. Pay only interest every month and only on the amount used. At the end of the repayment period, the investments will remain untouched.
It’s one of the best ways to leverage existing investments for profit.
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