The funding in the start-up sector of India has massively increased in the past few years. The main reasons behind this growth are the introduction of various schemes to promote new enterprises in the market and the availability of funding from multiple sources. Introduction of GST has also made the market conditions more favourable for aspiring entrepreneurs.
The most popular way to raise working capital for your business is through venture capitalists. They offer mentorship to entrepreneurs along with the funds in exchange for equity in the company. They leave a company after the acquisition of the IPO. Angel investors are quite similar to venture capitalist on this aspect. They invest the surplus funds they may have into promising businesses. They might invest funds as individuals or as network groups and expect equity in return.
Crowdfunding is one such external source of availing funds. Entrepreneurs can post the details regarding their business on any online crowdfunding platform to avail the required funds.
However, availing funds from these sources can be tough due to the fierce competition in the market. Entrepreneurs can self-fund the expenses from their savings, or they can borrow money from their family and friends. These options come with lesser complications.
Furthermore, entrepreneurs can also avail a start-up business loan in India for the required expenses. They can also avail loan under the PMMY scheme which entitles them to avail funding up to Rs. 10 Lakh. If they need a higher amount, they can avail a business loan from any leading financial institution.
There are various sources of start-up funding in the market. Individuals must choose a source that caters to their needs for a stable venture.
Additional Read: APPROPRIATE SOURCES OF WORKING CAPITAL FINANCE YOU CAN CHOOSE FROM