Looking for startup funding? Here are the options you can explore
Bengaluru’s education platform raises $25 million in the latest round. (Economic Times)
Bike taxi startup Rapido closes its Series B funding at $54.9 million (INC42)
Cab aggregator, Ola, raises $5.05 million is Series J funding (INC42)
Every day the startup world is full of news about capital funding. Some of them leave us reeling. How are they able to raise so much money? How do I fund my startup and take it to the next level? What are the available startup funding options that I can explore? More often than not, these questions create confusion due to two reasons: The sheer number of options and the lack of awareness.
In this article, we shall help you by talking about the most popular startup financing options for startups.
Angel investors are quite well-named because they really are “angels” for early startups. They are individuals with a profound liking for startups, and that’s why they finance the ones they like. Some of them also offer mentorship and advice. The best part about these funders is that most of them do not mind taking risks. The downside (depending on how you look at it) however, is that they expect 20-30% equity, which is quite a big sum.
Google is in the list of companies that were funded by angel investors.
Kickstarter, anyone? Thanks to portals like these, crowdfunding has become very popular. All you have to do is to find an established platform, post your startup idea/model and goals, and attract the interest of consumers. This model helps spread the word about the business and get a few orders before the launch itself. Even though this seems amazing because you directly appeal to your target audience without a broker/investor, you should be aware that this is a highly competitive space. Your business model and growth plans have to be top-notch to garner interest and for raising money for business.
We hear that many startups are either fascinated or terrified of venture capitals because they are quite complicated. However, if you are aiming big, you have to try bagging a VC. VCs don’t just provide entrepreneur loan. They also provide mentorship, expertise, and other services. However, VCs will not invest long-term. They are usually only interested if you have a solid exit strategy within 3-5 years.
Accelerators and incubators
For early-stage financing, we highly recommend accelerators and incubators such as Turbostart. These programs take promising startups under their wing and nurture them with network, mentorship, business funding, marketing, etc.
Airbnb started off with an accelerator!
Other options for capital funding include bootstrapping, startup loans, microfinance, government programs, and asset-selling. They are not as popular because they are not very lucrative.