A start-up reciprocates the dream of an entrepreneur. Every year there is a huge chunk of people coming up with new business ideas. There are a couple of reasons why startups do not manage to thrive and lack of funds remains the topmost of it. Fundraising meaning is raising money through various modes of traditional and modern are there to help.
Let us have a look at ways of fundraising for startups:
Create a Compelling Business Plan
A business plan is a foundation on which any company is started. With so much competition, an ordinary business plan will certainly not able to grab the attention of the investor. Yours should be a compelling one that can exemplify your passion and commitment towards your dream of building a business. Your business plan should answer some crucial questions like how your product/service will serve the need of customers, your financial projections, your exit strategy, and many more.
Craft a persuasive pitch deck
Your pitch deck should be such that it will grab your investor’s attention as soon as you begin to pitch. It should be short and precise. Moreover, it should strongly emphasize the uniqueness of your business idea. Investor pitching should answer the basic question that why you are the right one.
Build a Solid Network with Potential Investors
In most cases, friends and family are the primary investors. However, to sustain the long journey, any business needs investors who can help them to grow. This is possible once you build a solid network of investors. A network helps a lot to reach potential investors instead of you compromising on your dreams.
How to get funding for Startup
There are many ways to raise funds for startups but following the economical and growth-oriented steps will help your business to propel to greater heights. How to get find investors for Startup? Here are the few tested ways of grabbing investors,
There are many banks and NBFC’s who offer business loans for startups. These are locally available. They also have a well-defined process for processing the loan requests and you can expect money in a short span of time. They do not expect any ownership stake in your start-up. You have to return money to the bank along with nominal interest rates. Also, they will not interfere with the performance of your company. So, the profit earned by you will belong to you only.
Angle Investments refers to the investments made by angel investors. Angel investors are individuals with high net worth who are interested to invest their money in start-ups in return for convertible debt or ownership equity. Private investors, informal investors, private investors, seed investors, and business angels are some other terms used to refer them. These individuals are mostly attracted to start-ups which foster innovation. This in turn leads to economic growth. They are a bit risky as angel investors expect a high rate of interest.
Crowdsourcing is the fundraising option that has become increasingly popular in recent times. A borrower can raise funds through online campaigns using crowdfunding websites such as Indiegogo and Kickstarter. It is also known as rewards crowdfunding as the borrower can pay back donors by giving them gifts. This option gives easy accessibility to a large number of investors. If any entrepreneur wants to test the idea of a new product or service in the market, they can use this platform to validate it.
Venture capitalists are the individuals or companies who invest in a start-up in exchange for equity or ownership stake. They usually make huge investments. They are not afraid of making investments in companies that have huge risks but have huge growth potential as well.
Important tips for pitching to Investors
One thing to remember before pitching to investors is that they are used to listen numerous of ideas. You will have to strike the right chord by showing them how your business idea will serve the market need. Show them about your team is efficient for doing this. Gain expertise solutions on how to find investors for startups.