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  • Category: Investments

    What are the sources of getting funds for my company?


    Planning to get funds for your company? Searching for infromation about sources of funding other than crowdfund, incubators, loaning agencies like government or private firms? Find the list of possible sourcing agents on this Ask Expert page.

    Can you tell me source of getting fund other than crowdfund,incubators and loans to riace funds for my company?
    Can you explain me which govt or private firms whom I can depend on to raise my fund?
  • Answers

    3 Answers found.
  • Traditionally business houses or small companies had been raising funds through investors or banks or Govt loans but your requirement is to get funds from some other sources and not from these conventional ones.
    So, There are some unconventional sources which one can try to raise funds for working of one's company and one of the main is Angel funding. But you have to approach them with some attractive start up plan. Which means that your business model should make them interesting to participate in it. These Angel investors are cash rich people who have a inclination to help and nurture the start ups in any area. There are many NGOs also who are coordinating with these Angel investors and are working as a liaison between the two the start up and the Angel investor. These Angel investors will monitor your business whether you are going in the same direction of innovation and business modelling as was envisaged during the funding phase. You may be surprised to know that some of todays big business houses like Yahoo, Alibaba, and Google were once funded by Angel investors only. There is a network of these Angel investors in our country and you can find more information about them in the relevant websites like https://www.indianangelnetwork.com and many others.
    Another option is Venture Capital. Although this option is for slightly big companies but if there is a good potential in a business, they may like to review even the small set ups also. The advantage with venture funds is that they have a large experience in business arena and they guide the whole business and ask you to take corrective actions wherever you fail to steer the activities. They have access to the best experts in the field of investing and proliferating a business and are a valuable resource in all respect.
    Another way which is slightly new and unique is that there are some contests held by some reputed agencies where one can submit one's business model and project and if one wins in these contests there will be many agencies to fund the project as they feel that it is well assessed by the experts and has immense potential for growth. Some of these main contests programs being executed in our country are NASSCOM's 10000 startups, Microsoft BizSparks, Conquest, NextBigIdea Contest, and Lets Ignite.
    The most common and popular Govt loan scheme MUDRA loan is also a good choice but I am not elaborating on it much as you have excluded it in your query but still I feel it is worth to be considered.
    For raising small funds for a limited time credit card itself is a good technique where one can have margin of 45 days for repayment without interest. Some entrepreneurs go for product pre-sale to generate small funds. Then there is another way that is to sell some fixed asset in hand which is not being used presently and from the capital acquired, run the business and later when conditions are conducive, acquire that or some other asset accordingly. Many businessmen do such things frequently.

    Knowledge is power.

  • Money is like the blood of every business. If we can invest in time and correctly the company never can go as expected. Today many entrepreneurs look beyond various sources of business finance.
    The demand for financing in the Indian Industries is estimated at Rs 87.7 trillion, of which Rs 69.3 trillion in debt and the balance Rs 18.4 trillion is equity demand. It is very difficult for formal financial services to take care of the entire needs of various industries. So many entrepreneurs explore alternative methods of financing. The following are the four important ways in addition to the ways mentioned by the author.
    1. Angel investors:
    This is the best suited for young businesses and start-ups. Many startups will have great ideas or products. But they may need a launchpad. Such people can depend on Angel investors. They are also known as seed investors or informal investors. There are many such investors in India. They are generally from businessmen or corporate leaders. One should try to find out an investor who has an interest in the area you want to work in. It is easy to meet them at networking events and pitch sessions.
    2. Venture capitalists: They finance in at a later stage of business growth. They prefer providing capital to companies which are showing good growth. They provide money against taking a stake in the company. To attract a venture capitalist your business should have a good business model which is sustainable. Your company should have proven sales records and also should have loyal customers. You should focus on getting a write venture capitalist who will align with your ideas and gives you freedom if you assure good results.
    3. Business plan competitions: Many Business schools and corporates sometimes organise business plan competition. In that one can make a presentation of his ideas and plans and if it is attractive there is a chance some corporate or businessmen may get interested in funding your business.
    4. P2P lending: This model is called Peer-to-Peer platforms (P2P). Retail investors can lend money to small businesses through a fintech company's digital platform. P2P loans are stop-gap arrangments for any urgent requirements and working capital requirements. The approvals will come very fast and disbursals will also be very fast.

    drrao
    always confident

  • We need to raise external funding for the maintenance of health of our company apart from undertaking the expansion of the existing operations. This would require massive fund within the short time frame for the various purposes such as its expansion, maintenance and meeting other expenses etc.
    We would require to raise resources from the different routs so as to finance our company in the hours of need and some of sources indicated below can save us in such an embarrassing situation in meeting the additional resources for taking up different activities inside the company. We can raise resources in the following manner-
    1) Friends and families- Friends and families are a great source for funding since they have the full trust on our activities. However, there is the risk of loosing friendship if their money are not paid in time due to the constraints beyond our hands. Hence this aspect has to seen before rushing to our friends.
    2) Venture Capitalists- VC funding is the most convenient option to finance our companies for running their business and strengthening the health of the plants would mean higher profitability with the addition of some more productive units. Venture Capitalists would like to fund such companies having the ability to be valued beyond Rs 500 crores or more within five years. However, their approval would take some time say a couple of months in getting finances from them.
    3) Angel Investors- Most of the Angel Investors are not the member of Angel group. However, they are the business owners, executives or successful businessmen having the means and ability to fund dealings with the Industries so as to rake up the massive profits with their investments.
    4) Debt Finance - Under this scheme, the lenders ( often banks) give us funding son the assurance that we would repay over time with interest.
    We should be in a position to convince the lenders regarding our reputation as being Industrialists and can meet their expectations in relation to timely payment of the loans availed by them. Hence we should always make better planning to repay the loan within a reasonable time period to save our companies from payment of excess interests in delaying the time allocated for returning loans.


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