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How to Raise Funds for Online Business in India? Step by step guide

If you are looking for ways to raise capital for your startup business, then you are at the right place. Follow along to find out essential financing techniques to launch your startup.

While you are at the early stages of developing your startup, the management team might not have proper formation, and the products and services might still need to undergo more testing, and they can still be in a developmental phase. At this stage, your patents might still not be granted, and you might need to redesign your website. In this developmental stage, the entrepreneurs might need capital investments from venture capitalists and angel investors to grow the business, irrespective of whether the startup is an MSME or large enterprise.

Startup funding can deal with website designing, incorporation and everything else per your requirements. Fundraising is a significant deal-breaker for an entrepreneur to move up the success ladder. You can fundraise online or offline; however, the success depends on your fundraising ideas. Here is a compilation of a few financing techniques to help you secure a fund for the startup.

Self Funded Startup Business

Personal financing is the most secure way used by several start-ups. Even if you apply to avail of funds from a government entity or venture capitalist, you will be asked about the amount of capital you will be investing in your business. First-time entrepreneurs should invest their savings to show the investors that they are seriously interested in this venture. In the developmental stage, you are more likely to get the business loans, since investors will not have a reason to deny your request. They will also consider your business stable enough to be a low-risk investment.

Encountering Angel Investors

Individual investors with surplus cash to invest in business ventures are known to be Angel Investors. They are interested in fundraising for startups in India and abroad. However, unlike loans offered by financial institutions, angel investors demand higher returns for their profit, which can be risky for new start-ups. India’s renowned angel investors are Indian Angel Network, Mumbai Angels and Hyderabad Angels. Startup business owners directly contact them to find support. 

Option for Crowdfunding

Crowdfunding stands for collecting funds from investors through social networking platforms and crowdfunding websites for business needs. Online crowdfunding portals help in raising funds for charities, disaster management, events etc. Some online crowdfunding platforms in India are Ketto, Milaap, Kickstarter, Catapooolt, Fundable, FuelADream, Indiegogo, Wishberry etc. 

Apply for Loans Under Government Schemes

There are various Indian Government loan schemes are available in India to help startup enterprises, MSMEs, and SMEs while promoting social and economic growth in rural India. The schemes also focus on balancing the lives and aims of women entrepreneurs, individuals from the SC/ST category, educated youths and upgrading SSIs or small-scale industries, villages, residents of urban and rural areas etc. Various loan schemes promoted by the Government of India to facilitate startup businesses are the MUDRA loan scheme initiated under PMMY or Pradhan Mantri Mudra Yojana, CGTMSE or Credit Guarantee Fund Trust for Micro and Small Enterprises, Startup India, Atal Innovation Mission, Stand-up India, Make in India, TREAD or Trade Related Entrepreneurship Assistance and Development etc. You can visit each website separately to find out which scheme suits you.

Apply for Loans from Public Sector and Private Banks

Banks are the priority of startup enterprises since they are the most reliable and convenient way of getting funded. As a startup enterprise, you can get loans from banks in two forms- working capital loans and term loans. Every private and public sector bank in India offers business loans for new ventures. The loan amount, interest rate and repayment tenure vary. You can talk with the officials of different banks to find the loan scheme for you.

NBFC or MFI-approved Small Loans

If you do not have any prior experience in lending money or do not have a financial history or have not yet maintained any credit score, then you might find it difficult to have the loan approved for your start-up. You can therefore try contacting NBFCs, Non-Banking Financial Companies, MFIs or Micro Finance Institutions where your business loan might get approved based on your need without checking your financial history or credit score. However, you might have to bear higher interest rates than other PSU banks.

Avail Business Credit Cards

In recent times with the emergence of business start-ups, credit cards are widely used for business purposes. Suppose your business needs a small amount of money to primarily initiate the venture. In that case, you can use credit cards to carry on transactions and make timely repayments so that you do not have to face challenging debts and high-interest rates deducted as a form of a penalty.

Peer-to-peer Lending

In this type of money lending, no intermediate parties are involved. Lenders lend money to start-up owners or borrowers as a form of investment, and borrowers receive the money to invest in the business. The interest rate is higher, and RBI governs these peer lending institutions to maintain clarity in the borrowing process. 


Apart from these options, you can also seek help to come up with interesting online fundraising ideas by Vakilsearch. Vakilsearch has partnered with prominent venture capitalists and angel investors in India to provide the best-in-class fundraising services for ambitious entrepreneurs to scale up their startups. Once you provide the idea you are working on, Vakilsearch will put together your pitch deck. Then the design specialists will take care of your brand’s image and concept to come up with a completed pitch deck within 14 business days. Create a compelling pitch deck with Vakilsearch now with the guidance from legal experts, eye-catching presentation features and with the help of a dedicated compliance team and get connected with potential investors.

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