Investment Opportunities for your new business idea in 2023? Know the right way to approach investors and get your business funded for success.

Setting up a business is great, but it needs much more than just an innovative idea. You probably need a website, a tech team, some office space, and most importantly, some investment or funds to tackle all the expenses effectively. It means that you will require a sufficient amount of money or investment to handle all the aspects of your business. Irrespective of the kind of business you are starting with, you will need funds for that. Here, through this article, we are mentioning some sources from where you can arrange funds to handle your business effectively and take it to the next level.

Bootstrapping

When it comes to funding, the first thing that comes to our mind is self-funding or bootstrapping. That typically includes saving accounts, credit cards, and any home equity lines you may have. In most cases, using this as a source of finance is a great approach. In fact, a few entrepreneurs continue to bootstrap until their business turns profitable. This is beneficial as you don’t need to pay off extensive loans, especially when you may run into snags along the way. At the same time, if you wish to give a boost to your business and bring in rapid growth, it can be advantageous to introduce outsourcing of funding.

Friends and Family:

Asking for money from friends and family is a daunting prospect, but it is a good first step toward obtaining external funding. However, maintain as much distance as possible between professional and personal relationships by keeping everything in black and white and clearly explaining the risks involved in investing in a start-up. Also, be sure that they have understood it thoroughly. Do not risk family and friends over investment.

Small Business Administrations:

It is one of the best sources of finance to keep going. There are many more programmes that have been launched by the government in recent years to fuel the economy through providing support to small and medium-sized businesses. The Small Business Administration primarily offers small business loans and grants. Not only will these centres help you to connect with a group of entrepreneurs for networking and angel investors for funding, but they can also help you out with the type of funding you may qualify for and even help you to apply for the same.

The Small Business Administration works with a certified lender, which is a bank, and most of the loans are administered by the local bank. Your area may also have a local Chamber of Commerce from which you may gather a lot of information and guidance in terms of getting local funding. In many cities, there are programmes and organisations that exist solely to bring business into the local community.

Loans

Taking a bank loan could also be one of the best options out of all the sources of financing your start-up. The approval of the loan and the amount approved depend on the bank’s policies for the same. There are different types of bank loans offered by various banks. One can take advantage of them based on their needs and the guidelines of the banks for the same.

So, once the bank is convinced that you have started to gain transactions and make money, you are qualified for a traditional bank loan. Many banks in recent times have come forward to help start-ups according to the start-up policies of the government of India. Though every individual bank loan application and the rules for the same are different from each other, the approval of the loan and the amount approved depend on the bank’s policies for the same.

Angel Investors:

They are professionals such as lawyers, doctors, former associates, or even entrepreneurs, who are interested in helping the next generation by supporting them in their businesses. They are affluent and willing to invest a lot of money in your business in return for some equity. They will not just invest money in your start-up but will also sit by your side and offer solid advice, mentorship, and provide access to their network of contacts.

The Angel Capital Association, funded.com, and angel investment networks are all good places to start because they have thousands of angel investors who provide information on the types of investments they are looking for. They even provide help in listing by area and platform type. Angel investors are ideal for businesses that are reputable enough and beyond the start-up phase. The only disadvantage is that you have to give away a small portion of your business to offset the investment received from them.

Private Equity firms:

Private equity firms give you access to everything from a few thousand to a million in investments. This is primarily provided to those start-ups considered to have significant growth potential. The main objective of these firms is to sell their part after a few years to reap a significant profit from investing in your start-up.

Social Networking sites:

There are numerous social networking sites that have been launched to help connect you with all types of investors across all industry specialisations and business segments. They also connect you with investors from other countries as well, who want to participate in the global business environment and often help in making global footprints. Some professional social networking sites are Xing, Start-up Nation, and Meetup.

Start-up India scheme:

The Start-up India scheme is based majorly on three pillars, which are mentioned below:

Providing funding support and incentives to the various start-ups in the country.

To provide Industry-Academia Partnership and Incubation.

Simplification and handholding

There are a few terms and conditions that are required to be fulfilled before applying for the same, which include the period of existence and operations should not exceed 10 years from the date of incorporation. A company should be incorporated as a private limited company, a registered partnership firm, or a limited liability partnership. The annual turnover should have an annual turnover of not exceeding Rs 100 crores for any of the financial years.

An entity should not be made from splitting up or reconstructing an already existing business. The business should work towards the development and improvement of a product, a process, or a service that has a scalable business model with high potential for the creation of wealth and employment.

Conclusion:

There are numerous players in the market to help you bring your dream come true to your life, but as we all know, everyone is ready to follow a successful person, and so is the case with investments as well. Your idea must be full-proof and able to bring a change in your customers’ lives. Then, you have ample investors available in the market.

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Wishing you all a splendid and exponentially growing career journey ahead.