India is undergoing a start-up revolution of sorts, with multiple companies springing up in every nook and corner of the nation. Most of them are inspired by and dream to follow-up in the footsteps of Indian unicorns such as Flipkart, Zomato, Ola, InMobi, MuSigma, and more. India’s innovative ideas as well as the ability to execute at low costs has also attracted the interest of institutional investors both from within the country and abroad.
Global firms such as Tiger Global and Sequoia have huge investments in Indian companies, as do India’s leading businessmen such as Ratan Tata, N.R. Narayana Murthy, and more. The current start-up funding market is highly crowded and volatile because of the multiple ideas competing for investor cash, as well as the inability of some of the Indian unicorns to turn a profit and sustain business growth. If you’ve got investors lined up outside your office looking to fund you, things are good! If you don’t, don’t worry – there are other options!
Creative financing means being able to think of more than traditional options like banks to fund your startup idea. The alternatives are many, but they are not easy. The most successful entrepreneurs are the ones who think creatively, not only about their offering, but also about how to acquire cash, and never say never. Here are five top sources for capital.
2. Personal Credit Line
Getting a line of credit for your business finance can help you to get your business off the ground. A line of credit can be more advantageous than a loan because you only have to pay interest on the money that you use. You can also build up your business credit when you have a line of credit. The amount of money you can borrow depends on your credit score and the level of risk that you represent to the bank. Apply for business credit cards. Research and apply for business credit cards, which offer a modest line of credit. Credit cards may offer rewards, such as cash or airline miles, for regular use. You’ll also want to compare interest rates and yearly fees.
3. Vendor Financing
Many suppliers offer financing for equipment purchase or lease. These programs can save money and include upgrade features to keep your equipment current. They won’t be handing over any money as such but can agree to an extension of the normal 30-day payment terms to a period of months or longer, depending on your credit worthiness and extra fees.
4. Micro Loans
5. Crowd Funding
Crowd funding is a popular way of business finance which can raise money for your startup. These days it is becoming more popular and relevant. All you have to do is go to a relevant website, post about your business and the money will come pouring in. However, crowd funding is not as simple as it seems. Here are the following ways you can follow to raise money via crowd funding:
- Set up funding goals: For your business finance, you have to determine how much money you are planning to raise with your fundraising campaign. This is very crucial decision as there are many platforms that function as all or nothing fundraising. That means if you don’t determine your fundraising goals, you will not be able to earn even single rupee.
- Get Social: You have to get social and not rely on your platform of choice to bring your donors into it. There is a direct correlation between your social networks and success in crowd funding.
- Develop a reward strategy: Giving the right incentive or reward can be the main difference between hitting your funding goals or missing them. You have to develop specific tiers of rewards for smaller donations i.e. Rs.250-Rs.2500 and larger ones i.e. more than Rs.2500. Explore the things which are affecting your donors and figure out what is going to motivate them without spending too much.
- Post your campaign: Prepare your materials. A crowd funding video is very important for successful crowd funding and can be rewarding for your business finance. Post them on the crowd funding platform of your choice.
Becoming an entrepreneur is not easy. Head over to betterU for resources that will help you run your own venture successfully!