Let’s look at the different kinds of funding options to raise start-up capital:
Bootstrapping is ideal for first-time entrepreneurs. For instance, it is the best way to get funded for a new business. Hence an entrepreneur can either use their own money or get funding from family or friends. Self-funding is easy and hassle-free. There are no complexities of formalities, compliances, incurring interest costs, or any other liabilities.
In recent times, crowdfunding has gained considerable popularity. Since it provides options like loans, pre-orders, contributions, and even investments that are all done online. When people feel connected with your project plan, they contribute to raising funds to help build your business.
There are many crowdfunding platforms in India such as Indiegogo, Wishberry, Ketto, Fundlined. Similarly, a few well known international crowdfunding platforms include Kickstarter, PocketHub, goFundMe.
3. Angel Investor
These are the people who have money and want to invest in startups to earn attractive returns and pursue their sectoral interests. The advantage of having an angel investor is that they can also become your mentor and help you connect with other influential people. Several popular Indian angel investor groups are Indian Angel Network, Mumbai Angels, Hyderabad Angel, etc.
4. Venture Capital Funding
Popularly known as VCs, they usually invest big money to support business growth, provide expertise, mentoring management support, and provide constructive feedback. They typically look for enormous opportunities in businesses which has a strong team of people and good traction.
Startup incubators and Accelerators: Primarily set up to support early-stage startup entrepreneurs with guidance, mentoring, and acceleration through proven practices, the incubators and accelerators are now handholding entrepreneurs in many other business aspects.
I hope you have understood what different channels you can explore in order to kickstart your business or grow it even further.