Tips to Raise Your Capital for Start-up

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Tips to Raise Your Capital for Start-up
09 Aug 2021
7 min read

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An entrepreneur knows very well, how capital is important for a business. You have to raise a huge fund sometimes and small funds sometimes. No matter what you need to know the ways to raise that fund. Here it goes. Read the below passage and know all the possible ways to raise your funds#ThinkWithniche

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Here Are Some Tips to Raise Your Capital for Start-up

The fund is such a thing which is most needed. All we work, all we do and all we invest is only to earn money. The investment, the fund money is very important for not only an entrepreneur but for everyone. There may be some exceptions but to build up a large industry or maybe a small industry, you need capital. The amount may be small or big accordingly but you need it. Individuals, businesses, and governments all use funds to set aside money. Individuals might establish an emergency fund, mutual fund, etc.
But there are lot f ways to raise your funds, let’s see what are they

1. Bootstrapping

Bootstrapping is the self-funding of your company through extending resources and finances. Bootstrapping is used in business to refer to the process of using only existing resources, such as personal savings, personal computing equipment, and garage space, to start and grow a company. This approach is in distinction on bringing on investors to provide capital or taking on debt to fund a business expansion. This is often the ideal choice as it gives you full control of your business, forces you to produce proficiently, and carries no debt or compulsion to a third party. Bootstrapping should always be your first option.

2. Family Donations

Family donations are a very important part to raise capitals that come from just that, your friends and family. Your family and friends are your most lovable person who supports you all the time and also believes you, that’s why there is no need of paperwork of the other debt-funding passages, and they are usually your first option outside of yourself

3. Government Schemes

Now, come the different government schemes. Government offers a lot of schemes and funds for small and big industries and startups. Make use of them to raise your capital.

4. Business Loans

Business loans are a more traditional debt-based funding route. It is the most common technique for raising your business fund. Make a proper plan for your future business and take a loan from banks. You have to show proper reason and have to have a lot of paperwork for these.

5. Crowdfunding

Crowdfunding is the pooling of money from many individuals through either an organization or website to support the startup cost of a specific project or company. Crowdfunding is the process of funding projects by a multitude of people contributing a small amount to attain a certain monetary goal, typically via the Internet. Crowdfunding has been used for both commercial and charitable purposes. The crowdfunding model that has been around the longest is rewards-based crowdfunding. This model is where people can prepurchase products, buy experiences, or simply donate. While this funding may in some cases go towards helping a business, funders are not allowed to invest and become shareholders via rewards-based crowdfunding.

6. Motivated Investors

Motivated investors are often known as Angel investors. They are high-wealth individuals who provide startup capital to entrepreneurs in exchange for a percentage of equity in the company. These investors can be a good source of capital for your business. Like bank loans, here also you must have a solid business plan and a great motive ready. Then you have to capture their attention with interest and promising data about your business and your future capability. This groups of investors consist of multiple motivated investors combining their money to invest a significantly larger amount in multiple startups.

7. Venture Capitalists

Venture capitalists, like motivated investors, exchange startup capital for equity. A venture capitalist is a private equity investor that provides capital to companies exhibiting high growth potential in exchange for an equity stake. This could be funding startup schemes or supporting small companies that wish to expand but do not have access to equities markets. Venture capitalists do not pay out of pocket but rather invest other people’s money in the form of private equity, pensions, etc.

8. Be Creative

There are lots of additional ways for raising funds. Like, you can start writing blogs about your company. Advertising is the best way to raise funds. Nowadays social media is also a helpful medium from which you can raise funds. Like, sharing messages, or sending e-mails to different world capital investors. Many global investors invest money online, you can apply for that by sending your details via mail or social media.

9. Business Incubators & Accelerators

Early-stage businesses can consider Incubator and Accelerator programs as a funding option. Startup accelerators and incubators can get involved at all stages of a startup’s development, from the idea stage to the revenue-generating, late stage. However, most tend to focus on relatively early-stage startups, as this is when companies can typically most benefit from outside help. Business incubators and accelerators provide advice, guidance, and various forms of support for businesses in the startup phase. Business accelerators wrapped the timescale for startups by working as a boot camp. Business accelerators claim to help entrepreneurs hit the ground running; business incubators raise the business for the startups, allowing them to develop at their own pace.

10.Winning Contests

Winning these competitions can also get you some media coverage. There are lots of contests available for businessmen where they can raise capital with the prize money. Keep a track of such contests and be the winner to raise your fund.

11. Fast Money

There are few more ways to raise funds for your business. These can be the fastest way to raise your capital.

12. Product Pre-sale

Selling your products before they launch is an often-overlooked and highly effective way to raise the money needed for financing your business. The can be helpful to test the market and the target audience as well as you can raise a little fund for your future business.

13. Selling Assets

This might sound like a tough step to take but it can help you meet your short-term fund requirements. Don’t try this in a normal situation, but when you will be in crisis you can use this method. You can also sell materials that are useless for you.

14. Credit Cards

Business credit cards are among the most readily available ways to finance a startup and can be a quick way to get instant money. Most banks offer credit cards to you if you are an account holder. You can use such a gift card and credit cards for your necessity in raising capital.