Whether this is your first time kick starting your own venture or if you’re an experienced serial entrepreneur, sourcing early-stage funding never gets any easier. Anyone who’s started their own business will confirm the same.
Other than diving in at the deep end with the inevitable investor pitch, you’d think there would be other options out there to harvest funds for your bright idea? And you’d be right. Let’s take a look at them.
A trend that has taken off globally over the last decade, crowdfunding is fast becoming one of the most viable sources of funding for new and old businesses alike. Alongside the international leaders in crowdfunding such as Indiegogo and Kickstarter, a whole host of dedicated Indian platforms now also exist ready to support the latest startup ideas across a range of industries, from creative to medical to social enterprises.
Bootstrap and Cut Costs
Never underestimate the power of saving money. When you’re starting out, try in every way possible to keep unavoidable costs to a minimum. Share office space, delay superfluous purchases, utilise existing equipment. The more you save at the beginning, the easier raising capital will eventually be.
Venture debt is both flexible and efficient. Generally this will mean a three-year term loan with warrants for company stock, usually for equity-backed startups that lack the assets for traditional debt financing. The capital from a venture debt loan will allow you to progress ahead of predicted milestones.
Don’t overlook grants before you turn to venture capital funds and angel investors. Avoid giving up equity ownership for as long as you can get away with. A benefit of these sources is that many are milestone driven, which provides operative motivation for your startup.
Challenges and Competitions
Look out for pitching initiatives or competitions that are being run through various platforms or educational institutes. These challenges provide an opportunity for new ventures to pitch their breakthrough ideas and win potential funding. For example, this month, Impact Guru and IIT Bombay are hosting CrowdPitch Competition 2017, providing upcoming startups with a platform to present their innovative ideas and products as well as winning great cash prizes.
It’s vital you take the right steps to nurturing your idea financially and not to rely on investors alone. What steps are you taking to ensure your startup is a commercial success? Over to you.