So, you’ve taken up entrepreneurship and registered your startup! Kudos to your decision, as you’ve made this decision at a time when the Indian business horizon is expanding exponentially with numerous startups emerging every year. But merely registering a startup doesn’t suffice. As a startup owner, you must be spending sleepless nights with several questions lingering in your mind – the most significant one being how to get investment for startups! So, here’s some vital piece of advice.
How to Get Investment for Startups – 7 Ways to Find Investors for Startups
Investors are the lifeline of every startup. Hence, it is necessary to find investors who’d fund your venture and fuel business operations. Since you’ve been wondering how to find investors for startups, here are seven ways to do it.
- Self-Finance the Venture
Most startup owners use a part of their savings to fund their startup at least in the initial stages. Self-financing is the easiest way to fund your venture. However, it could hurt your savings. Hence, you should use your savings wisely and carefully and have enough to survive otherwise and to feed your startup with the needed funds as and when required.
- Have Friends and Family Invest
Another quick and potentially straightforward way of getting investments for your startup is to ask your friends and family to invest in it. Not everyone among them would ask for returns. However, you shouldn’t take their trust and funds for granted. Back your demand for funds with a practical and realistic commitment to return on investment.
- Borrow a Bank Loan
You can also enhance your startup’s financial muscle by borrowing a bank loan. Many banks provide loans to varying extents, according to your startup’s business potential and based on your repayment capacity. However, ensure you borrow money from institutional lenders like reputed banks or credible non-banking financial corporations.
Scan the interest rates, document requirements, and maximum loan every bank can offer. Try to get a loan at the lowest possible interest rates to prevent the bank loan from becoming a liability and balance between the interest rate and your business income.
- Take Advantage of Government Schemes
The Indian government has been supportive enough concerning the growth of startups and provides a conducive environment to nurture them. Accordingly, it has started various schemes to support startups. Some include the Startup India Seed Fund Scheme, Startup India Initiative, Atal Innovation Mission (AIM), and Aatmanirbhar Bharat App Innovation Challenge. Check each available scheme and examine your eligibility and relevance for a particular startup program to apply for it.
- Apply for Crowdfunding
Crowdfunding refers to collecting funds from multiple investors through digital platforms like social media websites, etc. Although crowdfunding is more commonly used for raising funds for social causes, relief programs, etc., startups can also benefit from such platforms. Some prominent ones include Ketto, Milaap, Fundable, and Indiegogo.
- Go to Shark Tank India!
Getting your startup funded through Shark Tank India has become a matter of prestige. It is because only the most innovative and promising startup ideas stand the test of various rounds that Shark Tank India’s jury conducts. But there’s no harm in pitching your startup at Shark Tank India. Great if you make it. If not, you’d at least create an outreach for your business. Who knows, a potential investor might be looking for a business like you!
- Convince an Angel Investor
Angel investors are people with surplus cash and are interested in investing in promising ventures. Usually, these people demand higher returns than banks. But does that make convincing them easier? Absolutely not! Angel investors invest carefully and only when fully convinced about a business’s potential. So, if your business is a genuinely dashing idea and has enormous potential to blossom, you might want to connect with an angel investor. Some popular platforms include Indian Angel Network and Mumbai Angels.
We hope we answered your question about how to get investments for startups. Remember, onboarding investments can take time and a considerable effort in convincing investors about your startup’s worth and potential. It takes consistent efforts in the right direction and provides transparent insights about your startup to potential investors.
Besides, you shouldn’t stop at only a single round of investment. Based on your needs, you should participate in various startup contests and attempt to get investments.
However, you should also ensure you make the right and required efforts to grow your business and deliver returns as you’ve promised to your investors. Failing to do so might put you in a bad light. In situations like these, people will think several times before investing in your startup when you ask for funds the next time.
Additionally, ensure you evaluate your startup before pitching for money. But why is valuation important for investors? We’ll explain that in the next blog.