How Can I Get Funding for My Startup in India?

Startup Funding

Starting your own business is hard. There are so many things to think about before you can turn your dreams into reality. You have to choose the right industry, secure all the permits and required documents, think about the manpower, and much more. But the biggest concern that most business owners face is the availability of financial funds and where to source them.

In the past, small businesses have had limited resources when it comes to financing their business. In most cases, business owners had to go to lending companies, pursue bank loans, or use their own money. With modern financing methods, things have changed, providing additional options. Today, crowdfunding for small business is so popular that it has become the primary mode of raising capital. But, is it good for your small business?

Why Funding is Required by Startups

What will you do when you can’t get investors to fund your business or you can’t reach out to them to pitch your startup? Unless you have pockets filled with cash, you don’t have many options left. That’s where funding from the masses comes in.

According to a recent report, around 50 percent of crowdfunded campaigns are successful. And, more than 75% of campaigns exceed their target goal.

Many startups have become successful after getting crowdfunded. And, this process of getting a small amount of cash from a lot of people to start a business venture is called ‘crowdfunding’.

Crowdfunding in the pre-internet era was difficult because one person couldn’t trust another person with his money. But, ecommerce has changed all this. Now, people can fund any startup of their choice through sites like Social For Action, Kickstarter, Indiegogo, and fundable.

In fact, startups have earned more than $5 million through these crowdfunding websites. One product named ‘The Travel Line’ has gathered $5.2 million on Kickstarter from 13,700 fund providers in just two months.

• Hire designers to create your product;
• Developers or programmers hired as full time employees or freelancers;
• Finally, having the ability to reach customers through advertising channels like Facebook or Google Adwords.

How can I Get Funding for my Startup in India?

There are many types of Crowdfunding for startups. From crowdfunding that helps with donations to equity-based crowdfunding that helps the backers earn more profit from it. The reason crowdfunding is so popular is because it is easy, secure, and accessible to everyone. Let’s learn about the types of crowdfunding in more detail.

1. Reward Based Crowdfunding

In reward-based crowdfunding, backers contribute to your project for non-financial benefits. This type of reward based funding is popular in creative projects where the backers will receive a token of appreciation or free gifts for funding the project. Sites like Social For Action, Kickstarter, Indiegogo and many others operate on this business model.

2. Donation Based Crowdfunding

Donation-based crowdfunding is for charities that are working for a social cause. One website that’s famous for donations is SocialForAction.com

Users just create a cause and then distribute the link of the campaign among their peers. They set a goal and all the amount collected is sent to the account of the person who has created the campaign.

3. Equity-Based Crowdfunding

Equity-based crowdfunding is meant to get a return on the invested amount. It is popular among in the stock market where people buy shares of various stocks and redeem them when the prices rise.

It is also a great way for startups to get money for their initiative. But they will have to sign a contract that they will provide equity to the shareholders or return their money if the project fails.

4. Debt Crowdfunding

Debt crowdfunding is when backers provide money in exchange for interest or higher markup. The debt crowdfunding option is usually practiced by banks and lending companies.

Crowdfunding Example to Take Some Inspiration

Here are some of the best crowdfunding example that you can use to enhance your campaign and increase their success ratio.

Coolest Cooler Ever

There was this one campaign of a water cooler that can turn into a blender, music stereo, power bank, cutlery holder, etc. And guess what? This cooler is also named as the ‘coolest cooler.’ It garnered over $13 million in funding last year on Kickstarter and is now available in the market.

Why Was it Successful?

The reason it became so successful was that it offered people what they consider essential for outdoor tours including power banks, juicers, ice cooler, and much more – all in a single product.  The cherry on top is its marketing campaign that includes an attractive video advertisement. The best part is that it asked people to get the complete cooler with all perks by funding the $165 only.

Ready to Launch Your Campaign?

Crowdfunding for startups is great when a startup doesn’t have access to investors. They can simply launch a great campaign on SFA crowdfunding website and get funding from the public for their product.

But, there is a catch! Crowdfund isn’t there to sustain your business for the long-term. This means unlike equity-based funding, you can’t get crowdfunding again and again for the same product. Once you have the funds, make sure to make your business successful and deliver what you have promised the public against their money.

That’s it. We hope you are now familiar with crowdfunding campaigns, their types, and how they can help you raise funding in a short amount of time.