Imagine having a brilliant idea and not being able to do anything about it. Especially when you have all the expertise to put to play but no spark to ignite the engine. Sad, right? Often in such cases, Capital tends to be the major factor for businesses to be up and running. I’m sure it is very relatable to many early founders.
Funding isn’t just required for a business to start its operation but is also essentials for its growth. The use of Financial investment into a business can range right from the manpower used to develop the product, its production, marketing and distribution and utilization of other necessary infrastructure.
Just like every business model may be unique in its own way, the progress report and stage at which they may look for funding may also vary. It’s not right to make a comment of which Funding option should one choose without evaluating its need and stage.
So, let’s discuss few ways to raise Funds for your startup:
- Can you put in some money?
Bootstrapping is as simple and easy to understand like its alternate name; Self Financing. I believe you got it right! Many entrepreneurs often pool in their own savings in order to start their own hustle. Startups may often find themselves unable to catch the eyes of investors especially when their business has seen no traction and so find it convenient to start from venting out their own finances. This initial fuel to the business may prove to be a factor which later will engage investors as they see the commitment towards one’s own business.
But let’s also highlight the fact, that not every entrepreneur has the capacity to fund his own venture! As an extension to self-finance, there can be times when one depends on immediate family and friends to help with monetary support. One might face less challenges while acquiring money from this group as there is lesser scrutinization of business and more room for flexible repayment with a considerable amount of return.
- Reach out to the masses
Crowdfunding; another trending fundraise option has been able to gamble a next level method in which you flash a proposal on crowdfunding platforms which mentions the objectives, plans and growth projections along with the amount the business is looking to raise. This is a platform available to common public who can contribute to the business by either pledging to pre-buy the product or raising individual capital towards it.
On one side you will notice that using this method enhances the market outreach and creates awareness for your offering even before it has made to the stands, and this can be an added benefit in terms of marketing. But yet again, this might not be a rosy story for every entrepreneur as the level of competition here is very high, accounting to the fact that most of your appeal to the audience depends on the first impression and how you showcase it to them.
- Let the Angels invest!
HNIs (High Net-worth Individuals) frequently referred as Angel Investors are individuals looking to invest their excess capital in highly promising startups. They may not always be the ones with the fat cheques like other institutional players, but are willing to incur higher risks for higher returns.
You will notice at times these individuals accumulate their finances to create a fund which helps them form a Syndicate or an Angel Network. This network may either bring individuals having similar industry strengths or it can also be a mix bag who collectively look at opportunities from various industries. A business can find themselves lucky to be mentored and given strategic advice by such industry veterans who may be willing to offer their expertise and network in order to grow the business.
- The VC game
Taking into account professional institutions, Venture Capital (VC) funds can be a game changer for many Startups. VCs often consider businesses with proven traction as it gives them a chance to predict the future market for that product or services. Apart from early or steady revenue companies, many VCs are also eagerly looking to invest in disruptive ideas, attracting pre-seed and seed stage startups with innovative concepts which they believe can scale successfully. Depending on the growth of the business, these institutes may plan to stay put for few more rounds of investments as they might notice increased potential.
VCs not just bring in the capital but also provide guidance to the business brought in from the various partners who are invested in the fund. They also help in attracting other VCs to participate in the funding round, highlighting their strong commitments towards them.
- Does your business DNA match?
Family offices are another group looking to invest mainly into business adding value or connected to their core line of business. Since they mostly come under the same umbrella, they are able to provide their vast experience which can be valuable for beginners, decreasing the chance of failures.
Family offices cater to many young startups and look towards the growth of their portfolio companies. Also, their extensive support and networking proves to be a great way for the business to scale rapidly.
Given the number of options available, in order to let your business grow exponentially you will have to look for external funds, if not from the very beginning. Avoiding the spray and pray approach, and knowing too well that not all investors are sector agnostic, might be a nightmare, especially when you are all set to go out but not sure where to start.
MergerDomo to the rescue!
Many options at hand but unsure where to begin? We completely understand your situation. Best part is that we won’t just help you connect with random investors, but will ensure our backend Algorithm curates a list of stage, sector specific investors at the blink of an eye. Yes, you read that right! MergerDomo will smoothen your process by hand holding you right from the time you approach HNIs, Angel Networks, Family Offices, VCs, keeping in mind your business, and assist you in successful fundraise. So, why wait?? Let’s take your startup out there together and show the investors you have what it takes!
Come join the network and help us grow your business!
(Relationship Manager, MergerDomo)