Sometimes during the corporate journey, situations arise where you have to get funds for your startup. The fund is a driving force behind all business operations. A particular part of your business will simply die if it lacks money supply. However, raising funds for your startup is a bit difficult. All entrepreneurs are trying their best to attract investors to fund their business. If you are also someone trying to get funds, then you might be wondering how to achieve that. In this article, I am offering some ways to get funds for your startup this year.
Top Ways to Get Funds for Your Startup in 2020
1. Go for The Banks
A bank is the first place where people go and ask for funds. These financial organizations have a bunch of schemes to help your startup gain drive. While going for banks, it is crucial to clarify your business plan. Sometimes, banks might be hesitant to provide funds to startups, and you have to convince them for it. So, explain your business plan in detail and describe how your startup would see success within a short time period.
2. Angel Investors
An angel investor is a well-to-do individual who is very much interested in giving funds. In exchange, they take some ownership in your business. Such individuals can be found online easily. Angel investors are beneficial because they always prefer to provide funding for new startup companies. Some angel investors start a group when they try to spend on a lucrative business idea. You should always try to find out and communicate with these individuals on your road to obtain funds.
3. Ask Your Family and Friends for It
Yes, your friends and family members can help you out with the funds. They are always close to us, so you can ask them for financial support. Even if your financial background is not so good, there always remains a chance from their side. Furthermore, you don’t require to explain your business plan to them in details.
Accelerators are mainly known for giving accelerated growth and quick support to the startup companies. They always seem to be a reliable option when your business is experiencing an immediate need for money. Accelerators offer guidance, business mentorship, legal and management advice to improve an existing corporate network. One important thing to note is they stop supporting any business after six months. That’s why they are called accelerators.
Incubators are also a good source for getting funds. When compared to accelerators, incubators can invest their experience and resources into a given startup for up to two years. Accelerators may charge some money, but incubators do not. Most of the time, incubators are available for free. Thus, you need not worry while getting incubation support for startup funding.
6. Venture Capitalists or VCs
They are much similar to angel investors when it comes to the possession of wealth. Venture Capitalists provide funds to entrepreneurs through VC funds. Some banks can come within the category of Venture Capitalists. Entrepreneurs who are at the very first stage of their startup need to take help from such individuals. VCs have previously helped to cultivate companies like Facebook, Apple, which have now become significant players in the market. No matter how many companies ask for funding, VCs always look for the best startups to invest in.
7. Seed Funding
The seed fund is the amount required to launch a startup. You can ask your State governments for startup funding assistance. State governments all around the country can help with seed funding. One primary objective of state governments through seed funding is to help startups establish their foundations and create jobs for people after getting successful. By supporting the unemployed, startups can give a boost to the state’s economy as well.
8. Non-Banking Financial Corporations (NBFCs)
NBFCs are the companies which come under the Company’s Act of 1956 or 2013. They assist startups by providing a decent amount of advances or loans. In India, NBFCs come under the authority of the Reserve Bank of India and the Ministry of Corporate Affairs. NBFCs borrow money from the masses directly or indirectly. In order to raise capital, they allow better yields on cash deposits.
In this article, you have noticed some best ways to get funds for your startup in 2020. Competition is at its worst, and people are standing toe to toe for gaining success in the market. These tips I provided above can work as guidelines for you while going through a difficult time for raising money. Also, in the coming years, the competition will only grow, and you will always require a brilliant business idea so that no problem arises while raising funds.