Many startups or businesses fail because of poor planning and lack of funding. Almost everybody have an idea or passion to create a startup, product or services base business which seems very much in demand according to the person(s), but how to achieve the fund raising milestone while you already have an idea.
There are many ways to rise funding for your startup. But you must have answers of few things before asking for funding, i.e. is it the right time to ask for funding? Do you really need the funding? As asking for an investment of funding has its own implications for your startup’s future. We always encourage startups to adopt bootstrapping till they reach to a growth level where they actually need a financial input and they know how to manage it.
Here we assume, you are well aware of implications and according to you this is the right time for you to go and ask for funding, in this case we are going to explore the available options for a startup to get funded.
Here are few of ways by using which you can get funded;
FFF (Family, Friends and Founders): This is very widely used terms, and one of more effective and practice for small startups, especially for those which are founded by students. You need to go and convince one or more from the 3 Fs and hopefully you will be get funded by them, if you have a convincing potential in your idea. In case of friends and family members you might offer them some profit, share of your startup or just a time to return the money, but in case of founders, you should find a relevant person who can invest his/her time, skills in-case he/she is not able to invest money, and this is also a kind of investment, in-return you can offer them shares of your startup or company.
Angel Investors: There are many people or groups who are ready to provide funding in-return of almost nothing, you can apply for an angel fund by visiting in-person and pitching your idea or through online mediums (if available). Angels provide small investments, seed funding to early or growth stage startups, and most angels do not ask for heavy returns. But be wise before signing up for an angel fund.
VCs (Venture Capital Funds): You should not directly approach a VC at idea stage, or you can say at-least get advice from some of your seniors of financial advisors before going to a venture capital fund or company. Also keep in mind, you must be well prepared or even have a solid business plan before going to the VCs. It is better to prepare a prototype with a good business plan, and if you can afford to build a customer base for your idea/startup or services business it will enhance your chances to get funded by the VC.
Crowd funding: People often use this method to generate funding for their startups, there are many offline and online platforms where you can put your idea or startup details and interested people will participate in your fund raising campaign and hopefully you will get funded, but keep in mind not all the ideas get funded via crowd funding platforms, there are certain requirements which need to be fulfilled before you launch your campaign and get successfully funded by the people.