siliconindia | | APRIL 20218HOW TO FIND FUNDING FOR YOUR STARTUPBy si TeamDo you want to start a business but have no funding? Funding is an essential element in any business startup. Business startups can be tough when one has insufficient funds. The method you choose for funding deter-mines the speed you begin the business; some may take longer than others, hence inconveniencing. As an aspiring businessperson, there are several ways that you can use to get funding for your startup. This article reviews the top methods to fund your business.ANGEL INVESTMENTAn angel investor is a private entity or a group of people who provide financial backing for small startup businesses and entrepreneurs. This type of funding involves the ex-change of ownership equity in the company that you want to start up. Once they invest in your business, they will own part of the business. These investors have surplus funds and are looking to get higher rates of returns in your business. They may use their money or use crowdfunding to raise money for your business.Depending on the agreement you have, the investment may be one-time or recurrent support to the business. Some may give the initial investment and only come through when your company is going through a hard time. All this depends on the arrangements you have with the angel in-vestors. Compared to other lenders, angel investors have more favourable terms as they invest during the startup re-gardless of the course your business takes thereafter. Their main focus is on helping your business in its initial steps. To better understand the term angel in-vestments, it is the opposite of venture capitalists, whose main goal is to get profits for your business. In other settings, angel investors are referred to as informal investors. Angel investors can come from family and friends or wealthy individuals who like your idea.Pros of Angel Investment· You get guidance and mentorship in business· The funding is flexible and attracts a low risk· Startup businesses get more ideas and growth op-portunities· Guaranteed credibility and networkingREVENUE-BASED FUNDINGAlso known as royalty-based financing, revenue-based financing is a funding method where investors give you capital in exchange for a certain part of the company's gross revenues. As a businessperson, you ben-efit as you get funding for the startup without sacrificing or pledging part of your business or using it as collateral. The agreement is entirely based on the revenues you make. The funding method is different from debt financing as interest is not paid on the outstanding balance, and there are no fixed instalments for the investor to pay down the principal. In focus
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