How to raise funds when you are in the idea stage?

 How to raise funds when you are in the idea stage?

Introduction:

It takes a great concept, industry expertise, patience, and financing, of course, to launch your own business. Any business needs funding to survive since it would be challenging to develop a concept into a profitable enterprise without it. Despite their vigour and commitment, most entrepreneurs lack the knowledge of startup fundraising. Although it's often believed that a company can survive on its primary service, that couldn't be further from the reality. Great concepts can only get so far without a solid financial foundation. 

The five tried-and-true methods to fund your business at the idea stage are listed below in case you have trouble raising money.

Pursue grants

Although you shouldn't anticipate writing a sizable check, there are a number of grants available, provided by both public and private organisations with the aim of encouraging entrepreneurship, increasing the economy, and creating job opportunities. You may start up operations, buy manufacturing equipment, and pay personnel with the support of these cash infusions. But getting funds may be a difficult, drawn-out procedure that takes a lot of time. The government of India provides startup loans as a part of the Startup India FFS (Funds of Funds) programme.

Go after venture capital companies

Venture capital funds are your greatest option if your firm is still in the concept phase. Venture capital funds, formerly exclusive to the West, are now a crucial component of India's startup environment. VCs provide new enterprises with capital, coaching, and networking opportunities through their large network of angel investors, HNIs, and corporations. Even while it might be difficult to contact experienced investors and persuade them that your startup is scalable, you can obtain significant money, unlike grants and VCs.

Opt for crowdfunding

The concept of crowdfunding originated from the West, but India has started warming up to it. With dozens of crowdfunding platforms available today, it’s perhaps one of the quickest ways to raise funds for your startup. All you need is a compelling pitch that reflects your startup’s scalability and growth potential. The biggest advantage is that you don’t need to pay back the capital, and also gives you a platform to create a buzz about your business even before it is established. The main challenge, needless to say, is the fierce competitiveness of such crowdfunding campaigns.

Message an angel investor

Although it has only just picked up steam in India, angel investment is increasingly sparking interest across industries. Angel investors might include corporate personnel and high-paid professionals in addition to HNIs (high net-worth people). Keep an eye out for angel investors that have a history of supporting new businesses, and select the one who will provide you financing, business advice, and mentoring. Angel investors can be found through investor gatherings, internet networks, and personal ties. The one drawback is that, on average, angel investors provide less capital than banks or VCs. Additionally, it is possible to be heard in the competitive startup atmosphere.

Use the assistance of family and friends.

Self-made businesspeople frequently turn down assistance from their loved ones or friends. However, a lot of the world's richest businessmen have acknowledged to taking out loans from family and friends when they first started their businesses. Consequently, you shouldn't be reluctant to follow likewise. You often don't have to pay extra interest when taking out short- or long-term loans from relatives or friends. In some circumstances, you are not even required to repay them. In order to lessen the stress, it's also advised that you just accept a portion of the total needed funds from your family and friends.