Ways in which you can fund your startups

startup

Nowadays, there is the flood of startups in the market. As a result, a lot of entrepreneurs and freelancers have emerged to leverage untapped opportunities in the currently conducive business environment. However, starting your own business needs capital requirements on many fronts.

The primary expense for which capital is required is the office space. You first need to buy a place to have your office at, the address at which your company will be registered. In that regard, there are many cool office spaces in NCR that you can avail the same on rent, in order to save on the high initial cost of purchasing that space. For a startup, it is necessary to raise funds to meet its day-day expenses until it starts to earn profits. One can raise funds from the following sources:

Self-funding: Self-funding is an effective way of raising funds for your new startup. An entrepreneur can invest from his own savings or can ask his family or friends to invest in his new venture. One of the advantages of self-funding is that the obligation of repayment to the family and relatives is flexible.

Crowd-funding: Crowd-funding is like taking a loan from a pool of people at a given time. To raise funds from crowdfunding, the entrepreneur is required to put details of his venture; business goals, plans for making profits, etc. on a crowd-funding platform. If people like his business idea, they will contribute towards funding his venture. One of the added benefits about crowd-funding is that it helps in marketing of the product and in increasing the brand visibility side-by-side.

Bank loans: Every entrepreneur first thinks of raising funds through a bank loan. Banks provide two kinds of finances – working capital loan or funding. The process of raising funds from the bank is much like that of crowd-funding; a business plan is presented to the bank, based on which the loan is sanctioned.

Venture capital: Venture capital is a type of private equity that provides funds to small, early stage or emerging firms. Venture capital is for small businesses that are already generating revenues. However, venture capitalists look to recover their investment in three-to-five years. Therefore, such investors may not be interested in your business if it needs a lengthier time frame to become profitable.

With the aforementioned modes of raising funds available, what entrepreneurs need to do is determine the mode of funding that is suitable for their business model, so that they can repay to fulfill their financial obligations as soon as they can.

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