5 Funding Options for Startups to raise Capital for business

February 19, 2018

Funding for a startup is just like fuel for a rocket, needed at regular interval to propel it to some height. Lack of funding will not only be an obstacle but may be the main cause of its shutdown. So at every interval, your startup needs proper funding to grow the business in every sphere.

Capital for a business goes side by side and one cannot neglect it as it is one of the major needs for any startup to get established. Numerous Startup funding options are available just one need to understand what harmonizes well with their requirement. Padrea, a business and management consultancy based in India having its branches in Noida, Bangalore, and Kolkata are intensively working to provide its clients the best consultation to overcome perplexity when it comes to fundraising and investment for a startup or business.

5 Funding options one can opt for are:

  1. Bootstrapping – Self-funding aka bootstrapping is the easiest option for fundraising for your startup because you are investing your own money in the venture. It is advantageous in many ways as it requires no formalities and documentation. One can also make their family and friends invest in their startup
  2. Crowdfunding – Crowdfunding means gathering money from the crowd or convincing them for investment. This option works well if your startup idea is steadfast enough. One has to present the business model in front of the mass for fundraising. Crowdfunding has a great benefit as you do parallel and indirect marketing of your product.
  3. Angel Investment – Angle investment is done by an individual or by a group of peoples who are interested in any startup idea. They generally put their money when the startup is an initial phase. Along with startup investment, they also provide guidance and mentoring to the startup. In return, in startup funding, angels enjoin equity.
  4. Venture Capital – Venture capital is the startup investment where a private equity firm, keens on investing in a growing and promising startup. The venture capitalists do the investment after the initial seeding stage in hope that their investment will yield a great return.
  5. Debt funding – Debt fund is the fundraising option where the startup borrows debt in form of a loan from an agency, and have to pay it back regardless if the enterprise is making a profit or not. They are different types
  • Venture Debt – It is the complement of venture capital and provides value to the fast-growing business and companies.
  • AR Line- It stands account – receivable based credit lines. It is a very good startup funding option if a startup or business is already generating revenue.
  • Asset Loan – The loan is given to equipment, if you have an asset capital then can apply into this, however, this loan is very hard to get.
  • SBA Loan – The SBA or the small business administration loan is provided by the banks, this type of loan has lower interest rates.

When the word investment or funding strikes your mind then feel free to contact Padrea for the best help in the same. We will always give you the best option for your startup or business to grow and conquer the market with best tactics.