Tag: Startup Investors

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Angel Investor Startup

Best 5 Ways for Entrepreneurs to Raise Funds for their Startup Business!

प्रोडक्शन लिंक्ड इंसेंटिव (पीएलआई)

A lot of entrepreneurs face plenty of challenges when setting up a new business venture. However, there is one factor that is common amongst everyone- to get the right resources and funds essential to kick-start your startup.

While there are plenty of challenges that entrepreneurs face on their journey of setting up their startup, raising funds could be the major challenge. This single challenge could decide the fate of your business venture.

If you too are encountering the same challenges, here are five ways in which you can raise funds for your new venture:

1. ANGEL INVESTORS

This is one of the fast-track methods that can help you to raise funds for your start-up business. An angel investor can take an equity share in your startup in exchange for the money they are putting in. However, they can be exchanged for convertible debt.  Though, one requires to have extreme knowledge of every aspect of the business.

2. PARTNERSHIPS

Partnerships are essential for organizational health. Coupling with a ‘strategic partner’ is always a good idea. A trustworthy partner can help you reduce liabilities, and can bring a fresh perspective into the business.

3. BOOTSTRAPPING

We all must have heard this term multiple times, but very few of us understand the concept of bootstrapping when it comes to fundraising. Bootstrapping is when you build the company up from the scratch with your own money. It is one of the best ways to raise money for your business if you do not want any investors in your startup project.

4. VENTURE CAPITALISTS

Entrepreneurs that are looking for investors can also take financial aid from Venture Capitalists (VC). VC firms invest in the early stages of a startup company in exchange for an equity share. These organizations raise money from distinct sources and mediums and invest this collective capital into the business. This funding along with business opportunities and additional resources can help startups to grow.

5. CROWDFUNDING

Crowdfunding is taking financial aid from small business financing individuals that help startups in raising investment capital. Crowdfunding allows entrepreneurs to reach out to a pool of investors, instead of seeking one big investor.

 

Companies like First Cry, BYJU`s, Nykaa have not only managed to do fundraising but have also joined the elite Unicorn club in 2020. You too can do fundraising for your business by joining our ‘Everything about Entrepreneurship’ course.

Learn the major challenges that you may face on this journey and how to break through them. To know more about this course, click here: https://www.badabusiness.com/?ref_code=ArticlesLeads

 

 

 

Categories
Finance Startup

5 Important Points To Prepare For Your Investor Meetings

Waiting to start an entrepreneurial journey, but freaking out with thoughts about how to conceptualize your business idea? Or have one great idea, but no funds to execute it? Then let us tell you that your journey has just started. Today, investors are looking forward to enduring some great business ideas and invest in those business ideas that can elevate to the next level of success.

The hard part is to pitch your idea to an investor and explain you are right concept without going in the wrong direction. Your months of research work and strategy can go wrong if you are not prepared well for the funding process. In this pandemic, many startups have gained investors in their business, and you must be thinking about what homework you need to have one good investor on board.

Here are a few tips that can help you to generate valuable partnerships or investor for your first meeting-

Make a Pitch Deck

A pitch deck is an important starting point, and your pitch deck categorically asserts the significant aspects of your business idea and product or service. Professionals always like documents and data to run through while talking about your idea. Well, the data explained, and the number shows the hard work you’ve done. It also gives the impression of preparation for the meeting.

Use graphs and pictures to present your strategies. Ensure that your slides are sharp and accurate. It also assists you in not missing valuable points to share.

Describe Your Story

Story narration plays a significant factor while making a pitch to an investor. It’s a human tendency to love stories that inspire them. A well-narrated story always brings an instant connection with a potential investor and helps you to indulge in your idea.

Make sure you display your passion and willing to risk your project. The more passion and commitment you have toward your dream, the more beneficial it will be to you.

The Team You Bring on Table

Most investors don’t generally put money just on the idea you share, but they also put money on the team that will run the concept. Therefore, when you meet, remember to introduce or discuss the team and its Essential Skills. Ensure that they can help you carry the idea to the heights you plan for them.

The main purpose here is to show that you are willing to make an effort to reach the goal you have done.

Industry Updates

For growing and staying in the industry, you should know about the competition also. To creak the opportunity, prepare the list before meeting with the investor. Then showcase how you are different from them. Also, work on a roadmap project to deal with the competition. 

Make a Financial Model

Make sure you have this discussion as your investor will be investing money in your idea until you share your plan on how you can utilize your money. Prepare the forecast of the financial model for the next 5 years. Try to give a clear picture you can provide to the investor.

Make sure, to be honest with your investors. Every investor aims to look for sincerity in the people they are backing up. We suggest you do your homework before meeting them as it will give you a good possibility of raising funds from investors.

 

Categories
Finance Startup

Why Do Investors Invest in Startups? Here’s How Investors Add Value to Startups and Help Entrepreneurs

Startups and Investors (Photo Credits: Pexels)

For any business to flourish, there needs to be good investment and planning that will help the firm reach its target audience and go beyond! Here’s where the role of an investor comes into picture. An investor puts capital to use for long-term gains, while an entrepreneur seeks to generate profits by using those funds. Thus an investor is a crucial aspect for any startup, who typically generates returns by deploying capital. Investing in startups is a risky proposition. However, the low requirement for overhead capital along with high upside potential, makes it lucrative for the investors to put their bets on startups.

Basically, an investor is a person that allocates capital with the expectation of a future financial return or to gain an advantage. An investor can choose to invest in-equity, debt securities, real estate, currency, commodity, token, derivatives such as put and call options, futures, etc.

According to the official website of Startup India- startupindia.gov.in, investors particularly venture capitalists (VCs) add value to startups in a lot of ways. Some of them are listed below:

  1. Stakeholder Management: The investors are the ones who manage the company board and leadership to facilitate smooth operations of the startup. Moreover, their functional experience and domain knowledge of working and investing with startups imparts vision and direction to the company.
  2. Raise Funds: Investors are best guides for the startup as they help to raise subsequent rounds of funding on the basis of stage, maturity, sector focus etc. The investors aid in networking and connection for the founders to pitch their business to other investors.
  3. Recruiting The Best to Achieve Business Goals: Finding great talent and best-fit human capital is critical for startups, especially when it comes to recruiting senior executives to manage and drive business goals. The venture capitalists, with their extensive network can help bridge the talent gap by recruiting the right set of people at the right time.
  4. Proper Marketing of the product: The venture capitalists (VCs) assist with marketing strategy for your product/service.
  5. Merger and Acquisition (M&A) Activity: VCs have their eyes and ears open to merger and acquisition opportunities in the local entrepreneurial ecosystem to enable greater value addition to the business through inorganic growth.
  6. Organizational Restructuring:As a young startup grows to an established company, they help with the right organizational structuring and introduce processes to increase capital efficiency, lower costs and scale efficiently.
Categories
Startup

What is a Startup? How Do Investors Add Value To Startups? All You Need To Know

Startups | Representational Image (Photo Credits: Pexels)

India is now becoming the world’s fastest growing startup ecosystem. In order to understand a startup ecosystem, one needs to know what a startup means! A startup is a young company that is usually founded by one or more entrepreneurs to develop a new and unique product. These entrepreneurs launch a service and bring it to market for people to use and benefit out of it. Startup, as the name suggests, begins with initial funding from the founders, their friends, families, relatives, among others.

Startups are becoming very popular in India. A start-up is basically a company or project begun by an entrepreneur to seek, develop, and validate a scalable business model. Startups face high uncertainty but some of them do go on to be successful and influential and become unicorns. The startup process can take a really long period of time and can go up to years to be successful. Hence, sustaining effort is required.

Over the long term, sustaining effort is especially challenging because of the high failure rates and uncertain outcomes. One needs to understand the basic concept that an entrepreneur is an individual while startup is an entrepreneurial team, and needs to work accordingly to achieve the desired goals.

How do Investors add value to Startups?

According to Startup India Portal, which is India’s largest online entrepreneurship, the investors, particularly venture capitalists (VCs) add value to startups in a number of ways. The Startup India Portal platform allows startups to network, access free tools & resources and participate in programs & challenges.

  1. Stakeholder Management: Investors play a key role in building up the startup. They help by managing the company board and leadership to facilitate smooth operations of the newly started firm. In addition, their functional experience and domain knowledge of working and investing with startups imparts vision and direction to the company.
  2. Raising Funds: Investors are best guides for the startup to raise subsequent rounds of funding on the basis of stage, maturity, sector focus etc. and aid in networking and connection for the founders to pitch their business to other investors.
  3. Recruiting Right set of people: Sourcing high-quality and best-fit human capital is critical for startups, especially when it comes to recruiting senior executives to manage and drive business goals. The venture capitalists, with their extensive network can help bridge the talent gap by recruiting the right set of people at the right time.
  4. Proper Marketing of the Product: VCs assist with marketing strategy for your product/service.
  5. Merger and acquisition opportunities: The venture capitalists should be alert about the merger and acquisition opportunities in the local entrepreneurial ecosystem to enable greater value addition to the business through inorganic growth.
  6. Organizational Restructuring: As a young startup matures into an full-fledged established company, the venture capitalists help with the right organizational structuring and introduce processes to increase capital efficiency, lower costs and scale efficiently.

In India, the Government, under the leadership of PM Narendra Modi, has started and promoted Startup India initiative to recognize and promote startups. This initiate is aimed to develop Indian economy and attract talented entrepreneurs.