It’s not easy to get funding for your startup. If you’re at the stage of scratch without any product or service for the audience, then people find it hard to believe your idea. The sad part is you can’t get funding if no one believes your idea.
You go to people who know you, they‘ll believe you even if your idea is a bit risky or rubbish. Many of the great giants of today have started as same. Later they turn this initial funding to millions for themselves. Here are the other steps you should follow to get funding for your business.
A startup requires multiple rounds of funding to survive. Let’s see how many rounds does a startup needs to get better funding.
Seed Funding For Startups
At the initial stage of startup funding, you’ll get around $50,000 or $500,000 depending on how convincingly you pitch your idea. It is the riskiest investment because you can’t prove that does your business survives. Once it survives your investors will spend more money for a few more years. When your startup survives you’ll be able to get series A funding.
Once you’re out of money, you’ll connect with venture capital firms and angel investors to get more investment for startups. This bigger investment method could run from hundreds of thousands of dollars to millions of dollars. But you have to give a company share to the new investors.
Your startup can consider series B funding after 4-5 years of operations. In some cases, startups don’t opt for series B because they might be profitable by that time. Series B funding usually has a basic funding amount starting at 10 million.
Now you’re aware of startup funding and ways to get funding. It’s time to start developing a startup idea that you can turn into reality.
When you are starting a business, bootstrapping is an effective way to do financing. It means you are self-funding instead of relying on others for funding, giving you full ownership.
Crowdfunding has created interest, which also helped the product with marking. It also creates demand for your product as well as helps in funding.
Investors with high interest in upcoming startups and a lot of cash make up the angel group. They screen the proposals collectively as a group before investing. They also provide mentoring and advice.
When it comes to venture capitals, they are well known for managing funds professionally and investing in startups that they find potential
During the seed level of your startup, incubators and accelerators are a great option for funding. Incubators will nurture you by providing training and shelter tools and a network for business, Whereas accelerators help you to take the big step.
There are mainly two kinds of financing from banks. Funding and Working capital loans. For funding, we need to share the business plan and detailed valuation along with the report of the project, which determines the sanctioning. Capital loans require one complete cycle of revenue-generating operations; hypothecating stocks and debtors usually decide the loan limits
The government's funding is one of the best available. In the USA, small business lending funds and portals dedicated portals for grants are available. It would help if you met the eligibility criteria for government to grant funding.
This is one way of getting funds without any intermediaries. Lenders lend money to those with startup strategies.
Are you ready to turn your startup idea into a reality? Our 'Startup Guide' will give you the tools and resources you need to launch and grow your business. From creating a solid business plan to sourcing funding and building a team, this guide has everything you need to succeed. If you have any other resources suggestions or updates please contact us at editor@codeventures.com