Truth about investment and funding for early stage startups

The main ingredients of a Startup are an original idea, a solid team, a robust execution, a viable business model and requisite investment. Investment in a startup is carried out in various ways such as Bootstrapping, Crowdfunding, Angel Investment, Venture Capitals, and many others. The startup has many phases namely, Start, Growth, Establishment, Expansion, and Maturity. The most vital stage is the early stage of the startup where everything needs to be done in the most possible accurate way.

Before investing in a startup, it should be ensured that the idea is strong and proper incentives are taken to work it out. All the required resources should be acquired. There are huge chances of a startup to fail. Therefore, keeping in mind every consequence, a proper strategy must be made and carried out. A failure in a startup can lead to the loss of a huge amount of money that must be taken on point before the investment.

At the very first, a proper business plan needs to be prepared for the startup. This business plan is the key to attract investors and to showcase the idea in front of people. So, the entrepreneurs build up their idea to form an appealing business plan. Now, this business plan is put on various platforms to seek funds. These platforms include Crowdfunding platforms, Angel Investment Platforms, Cryptocurrency, Venture Capital and even governmental schemes.

The very first approach towards investing in early stages is Self-funding. Self-funding starts with the savings. The savings must be made as soon as one thinks of building a business model on their own terms.

The Banks give loan for the new startups if the business plan is presented to them. Once the loan gets sanctioned, they give a huge amount of money in a short period of time. But a lot of interest and a high credit requirement may be the shortcomings of this type of investment.

Angel Investors are the people who have a surplus amount of money and have a keen interest in funding a startup. The angel investors look for a strong and innovative startup, so they fund it and meanwhile provide guidance and mentorship for the startup. This type of investment generally occurs in the early stages of a startup. Angels are ready to take high risks associated with the implementation.

Venture Capitals are professional fundraisers who seek for a capable, fast-growing startup which can come into the market sooner. They judge the future of the startup by their own methods and apparently provide expertise and mentorship. Venture Capital Investment comprises of a lot of involvement and compromises in the startup, which is less favorable.

Crowdfunding is the method of raising funds by presenting the business plan and objectives on a platform where consumers can read everything in detail and then invest in the startup. It implies a good pre-marketing of the startup. The feedback can be easily obtained. An easy connection can be made with the audience. But the only shortcoming is the limited funding.

Just an idea is not the only ingredient of a startup. A long list of dedicated incentives and an icing of good investors may serve the best dinner for a startup company. The early stage of a startup is the most critical stage where everything decides the future of the startup. Therefore, every step is very important and it can either take the entrepreneur towards the success or one step behind it.  

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16th January 2019 At 5:36 am

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31st January 2019 At 5:36 am

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