Startup Funding | How To Find Funds For Your New Business Idea

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Source fund from your pocket or savings. This will not be difficult to do because of fewer or no regulatory. By and large, loved ones can contribute to your startup.

The need for startup funding

Startup funding can be provided by various sources. Perhaps the most popular and familiar sources are friends, family and personal savings. A few things to note in this case are the characteristics of these three sources. Friends Friends who want to support your entrepreneurial idea will first want to know the business idea itself. Friends who are experts in the field you are trying to start will want to see that you have researched and thoroughly understood the topic. Family Family members are your initial network. When it comes to wanting to spend money on a venture, family members will easily be the first source of funds to the extent that you can expect them to support your business. But when it comes to business ventures, family members usually expect something in return.

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Why finding the right funds is important

Without adequate funding, the chances of making your business a success are slim. However, crowdfunding seems like a viable option for you if you’re seeking private funding. The ability of crowdfunding platforms to raise funds from unorganized group is undebatable. Crowdfunding platforms have attracted funding from people who have an interest in particular products or services and are willing to fund a particular crowdfunding project.

How to find the right funding for your startup

The first and most important step in funding is identifying the right startup funding to apply for. It is likely to ask you to document your business idea with realistic projections and cash flow. What should you expect from the startup funding? Your idea needs to have commercial potential. This means it can solve a real problem people face in the market. It will be a money making business if you can attract and convince many customers. Raising money from friends and family does not count as startup funding. If you can't pitch your idea successfully to your network, the funding from family will be easily squandered. Commercial viability of your idea is not an absolute requirement for startup funding.

How to avoid a scam

Seed and early-stage investment fund are prone to scams. I have read about the success stories of companies that were started after they got seed funding from angel investors. However, the success chances are narrowed and far between. If you are planning to get seed investment, I would advise you to do extensive research on those who are reputed for the same. It is easy to fall for a scam. There are a number of ways in which a scam can be created. One, the fund that you get should have an experienced business angel (preferably a retired person). Two, it should be from a local investor and no online money transfer options are allowed in India. Three, the business angel should have the funding already and there should be little to no documentation.

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Conclusion

If you are a new entrepreneur, don't be tempted to start your business before you have enough money. Starting without money is a sure road to failure.

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