The need for start-up funding is growing as new innovators develop highly prospective ideas. Get to know about various sources of fundraising available in this blog
Starting an Online Fundraising Campaign is not an easy task. If you are among those Indians who are thinking about launching their start-up in 2022, you can proceed with executing that action now, literally from scratch. The present start-up ecosystem in India, backed by the government, is willing to help aspiring minds more than ever.
The entrepreneur, however, should decide each step strategically and take the help of numerical insights to ensure that the venture does not miserably fail within the first few months itself, which may ultimately force the person to close down the business mechanism as soon as it starts. Unfortunately, 94% of the companies faced such a fate in the past.
The need for start-up funding is immense to meet the long-term vision of a strategic commercial model. Modern businesses need to deal with massive upfront costs; therefore, fundraising and funding are required to favour the enterprise’s overall development and support its initial operational costs. In this article, we are about to discuss the various aspects of Best Fundraising Platform.
Best Fundraising Platform
Kickstarter
This platform is actively used in India and is known for merchandising new projects to bring them to life.
Wishberry
Creative entrepreneurs find this platform as a go-to destination. Apart from crowdfunding, this website is renowned for helping its campaigners in areas like marketing and mentorship. Donors and funders get rewarded for their contributions to new projects. This website looks forward to simplifying the online methods associated with fundraising services. Industry experts have highly rated this tool as it only supports limited campaigns based on its authenticity and genuineness.
Ketto
One of the popular fundraising websites in the country, this platform supports campaigns linked to health, animal welfare, education, women’s empowerment, sports, and so on. Tax benefits are extended to donors who actively support individuals with a good cause. Entrepreneurs recommend this networking tool as it has brought a massive social transformation and helped many raise funds by spreading awareness.
Click here to apply for Online fundraising Services:
Sources of Funding at Various Stages of Establishing a New Business
Numerous fundraising sources are available online that we will discuss in this blog. This source generally depends on the various operational stages that your startup venture passes through.
Conversion rates are much lower when you look for investments from outside sources. Also, the whole method involves a decent time before the amount gets credited to the bank account of the intended person; at times, it may take up to 6-8 months. Hence, patience is the key.
Ideation
Limited fundraising options are available at this stage as the entrepreneur has just come up with a new idea which he will pitch to several potential investors, hoping to raise small amounts to get started. This is the first stage of a start-up’s lifecycle, where an idea eventually comes to life.
Primary sources of investment in this stage include:
Self-financing
We also refer to this term as “bootstrapping,” a start-up where the entrepreneur has to depend on his savings to grow the business idea and give it a primitive shape. Ideally, the person must not seek help from others at this stage. Otherwise, the pressure of repayment will hinder the course of development.
The most commonly utilised fundraising channels at this stage appear to be family members and friends who trust your process of building a venture from scratch.
Finally, we have pitching events where the entrepreneur approaches organisations with his business model and competes with other businesses to convince potential stakeholders to believe in them. These institutions’ amounts are sufficient to sustain the business in the initial stage.
Seed Stage
Once the prototype has been developed, start-ups commence at this stage. Here, the products or services are offered to a handful of potential clients with the intent of performing field trials. The importance of initiating an online fundraising campaign in this phase is pronounced because these functions require sufficient investment, but seldom are investors convinced to spend money without sufficient market reviews; thus, entrepreneurs reach out to:
Angel Investors
These investors spend their money to support high-potential businesses, and in return, they ask for equity. Relevant industrialists can be reached online.
Crowdfunding is another good option where many individuals donate money via online fundraising platforms.
The government has also launched several loan plans at a moderately low-interest rate. At this stage, startup funding is needed to enhance the offerings directed toward the target audience. Popular options for fundraising in this phase include:
VC funds or venture capital funds
These institutions support specific sectors based on their preference; their decision to step in depends on the phase the business is passing through. Investee startups get valuable guidance in consolidating their market position from these institutions, but they need to give up their equity in return.
Banks will also give a business loan if they can showcase their market traction. Businesses can specifically apply this method to raise their working capital. Also, the entrepreneur may trade with equity instead of paying out the debt in this kind of debt financing.
The Need for Start-up Funding
A few purposes: Start-ups look forward to raising funds that have been shared with you. In the initial phase, the business might depend on trustable investors for several reasons. However, the proprietors must approach the right people with well-jotted business and financial architecture to convince them to join their journey.
Funding is required for:
- Generating a prototype
- Product development
- Recruiting a skilled workforce
- Securing sufficient working capital
- Purchasing equipment and raw materials
- Legal counsel and the use of consulting firms
- Obtaining certification and licences
- Launching sales campaigns and designing marketing channels
- Setting up office space and arranging administration charges
The Bottom Line
It is without a doubt that no matter how potential your startup idea is, initially, financial support is a must if you wish to trade at a considerable level. Various online platforms are available to support that cause to help Indian entrepreneurs and encourage their brainstorming capabilities.
The need for Best Fundraising Platform India is increasing considerably as innovators, day by day, are getting access to a wide variety of key sectors that require immediate solutions. Vakilsearch has a separate team who works incessantly to bring out these facts and present them to you; if you are keen to learn more, check out our other blogs.
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