9 Helpful Ways Of Funding Requirements for Startup Business

Startup Business – 
Most often people are hesitant to start a new business because they are simply scared of the thought of it. Many are afraid of the risks involved in the startup business and fear of failure comes in the way of getting ahead with any business idea they may have.
However, the new breed of engineering, management, commerce and liberal arts graduates are willing to take the plunge but cite lack of funding requirements as the stumbling block for going ahead with the innovative ideas. Compared to yesteryears, the number of angel and venture funds willing to invest in the start-up business has increased manifold with many of them being sponsored by leading entrepreneurs or businessmen.
However, getting funds is not an easy job as you need to do your homework well and present a convincing case for funding requirements.

Here are 9 ways to get funding requirements for your startup business:

Be willing to get rejections several times Just as a professionally trained person sometimes knocks on several doors to get the first break in their career, an entrepreneur may have to meet hundreds of people before he gets an assurance of funding.
Most entrepreneurs approach banks for funding requirements, but they do n’t invest in a project but only provide debt. You need to have a good track record of running the firm smoothly for a few years, they analyze your balance sheet, profit and loss account, assets and liabilities. For a startup business, there is no track-record to go by. Therefore, they may offer a cash-credit facility or overdraft facility based on the collateral (fixed deposit, gold or immovable property) you are willing to mortgage. These credit facilities are not for long-term and also carry huge interest rates.
A good proposal should have the profiles of its promoters, the business model, how revenues will come from operations (revenue model) and more importantly pitch the startup business idea in an appealing way.

Get connected with entrepreneurship promoters and angel funds
Several new entrepreneurship promoters have emerged over the past two decades including The Indus Entrepreneurs (TiE) and The Keiretsu Forum which meet regularly and update budding entrepreneurs on how to do startup business. The idea behind TiE is not just providing funds to needy entrepreneurs but provide mentoring, awareness, networking, incubation facilities and funding. It is a global organization that has several chapters spread across different countries.
If you have friends who are entrepreneurs, their references can help you achieve a headstart in connecting with potential investors. Taking part in events organized by angel funds and entrepreneurship promotion organizations such as TiE can help you build contacts and feel the pulse of what is really going on in the market.
  
Make your presence felt and be marketable
 Some college graduates work as a team and come up with a good product or project and get them displayed in a leading entrepreneurship event. Or get them published in a box item in a local newspaper or website. This, in turn, may be shared by social media and it gets talked about. It opens the door for investors to notice your idea or innovation and increase the chance of attracting them to your project. Students in engineering colleges and technical universities sometimes make use of the incubator facility which contains office space, fabrication facility, small meeting rooms and other infrastructure to start off their venture. This helps keep initial costs lower and help build the business. And when they have developed a viable business model they can move out from the incubation facility and also get noticed by angel funds.


Try Crowdfunding requirements also
 These days many good projects are funded through the crowd funding process route. An idea is floated and interested investors vie for the project through a common forum. This type of fundraising is done for initial public offerings of public limited companies too. It is often resorted to by the young tech-savvy entrepreneurs. There are crowd funding process sites like Kickstarter and Indiegogo that brings investors and entrepreneurs through a common platform. These forums help people with funds to identify good projects to invest. The promoters of crowd funding process sites get an incentive from running the show.

Write to influential businessmen
Many wealthy businessmen are willing to fund innovative projects that may die due to lack of money.
By 2015, Ratan Tata had funded over 10 projects covering wind energy, e-commerce and IT some based on emails received from the startup business entrepreneurs. All such projects submitted are vetted by a senior advisor working under Tatas group. These businessmen have a team who track news reports for innovative projects and offer monetary support after proper evaluation of it. Most often the advisors or evaluators of these businessmen give only thirty minutes time to entrepreneurs to present their case. Those who succeed in making an impression are called for further rounds for shortlisting.

Look for grants by entrepreneurs and government agencies
Some government agencies such as science and technology ministry, rural affairs, the environmental ministry may be announcing grants from time to time for young researchers and entrepreneurs having innovative ideas to promote. Although they may not be sufficient to start a venture, it provides the seed capital to take care of initial expenditures. Most often they may not require any repayment. But the disbursement may be closely monitored and based on the performance of the new venture, the funding process would be done in installments.

Take part in contests 
Several major entrepreneurship events also feature contests inviting innovative ideas for funding process. They are also done by large enterprises and universities. The Amazon Web Services Start-up Challenge gives away annual rewards of $50,000 while Massachusetts Institute of Technology (MIT) provides $350,000 for prospective entrepreneurs based on pitching, and launch contests.

Don’t waste too much time looking for funds
According to some businessmen, new entrepreneurs spend a huge amount of time scheduling interviews, meetings, presentations with angel funds and investors that they don’t get the time to innovate or improve their products or face the customer who will bring the money that should keep the company going on for years.
When angel funding or venture funding is pumped into the company, you are under constant pressure to deliver above average returns because that is when the angels can make money. You may also be forced to have fancy offices and interiors to show the world that you have received the funding and create an impression among your clients.

Conclusion

Early years of a new startup business is beset with teething troubles and raising money is only one among them. There are no easy ways to raise funds- some have used family money and savings, others may have used more of venture funding process or even borrowing at high rates of interest.
Still, others may have been lucky getting grants from the government as small and medium businesses run by women are provided assistance or subsidies in many countries. 










SOURCE: www.educba.com