A startup is a business entity that is visualized as an idea or a concept by a businessperson or a group of them. Even at the preliminary idea stage, a startup will need funds to conduct a few trials, prepare a product or service based on the idea or do research, development and market study that supports the idea as a product or service in the market. 

Therefore, a business or a startup needs to be prepared to raise funds and look for options that help in funding for startups. But today, many means and methods support the cause of an entrepreneur. They can help to find funding for a startup business, unlike many decades ago when a person had to break the bank and empty one’s personal finances completely in order to start a business. 

How much Investment should be raised?

There is no simple answer to how much money one would require for a business. At the outset, a business may require a certain amount of money as capital which later becomes the equity of the company. 

At every stage from here, the business will need a percentage of money that helps the company to grow and move to the next level, such as setting up production facilities, adding more machines, buying more assets, creating more products, diversifying into new markets, enter global markets and finally become a public company. Read on to find out more about funding at each stage. 

Funding a Startup

For a new entrepreneur, finding the right sources of funds and the resources one can tap into for investment is an art to learn. A new entrepreneur may not know where to look for investment and who might be the right people who would be interested to invest in startups

Furthermore, banks can make it even more complicated as they need a trusted associate who can vouch for any payments or loans they issue to a new businessman. Some banks would only be interested in offering a mortgage loan to secure their investment or would need a considerable asset attached to the loan document so that any default can be recovered using it. 

With so much stigma in the market towards new entrepreneurs and startups, it can become extremely difficult for businessmen to find startup funding. But today, there are many organizations that work dedicatedly for new startups to find the right investors and to help find funding for their organizations. 

A business may also raise funds from various sources by itself by preparing an excellent business plan and presenting a solid pitch to angel investors or VCs. These investors are willing to invest in potential businesses and startups that have a bright future and potential market growth. 

Apart from just these investors, one can also tap into a simpler investment using crowdfunding methods, seeking loans from friends and family, approaching government organizations such as SBA (Small Business Administration) or other non-profit organizations that can help startups to acquire funding in a much simpler way by offering equity financing or through loans with an agreeable rate of interest. 

Based on how much funds are required and the various stages at which these funds are required, a businessman can easily prepare to tap into these resources as and when needed. Only with continuous investment would a business have the potential to expand, stay relevant, improve, grow and flourish. 

By Manali

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