How to get funding for your startup?

You have a great idea of starting a fund and you have followed the basic steps also for the same.

Let's make a checklist:-

1. Idea- Check
2. Name- Check
3. Motto:- Check
4. Logo:- Check
5. Funding:-?

The major problem arises when we reach the funding stage for the startup. There are many ways to fund a startup it seems easy in the starting but as you move ahead it gets more complex but with our help, you can easily get funding for your startup. 

First comes the steps for funding your startup:

Step 1:- Calculate the amount of funding you will require to get your business off-ground

Before looking for investors for your startup you need to make a document regarding how much amount do you need to make the startup work then only you can get investors. 

Startup costs vary with different factors such as office supplies to formation fees and employment fees and taxes. 

Each and every startup have different costs depending on the field they work, their office, location, and other factors. 

There are two types of costs in a startup- fixed cost and variable cost. Fixed costs include rent, utilities, and taxes, whereas variable costs include employment payment, supplies, marketing, or any other factor that will change based on conditions. 

Estimating the amount you require for your startup will help you to decide which funding approach you should take.

Step 2:- Make a business plan

This is the complete roadmap and the goals you will be pursuing in the next 2-3 years in your startup journey. Creating a business plan not only does help you to make a proper strategy but also helps you to make a proper list of your goals and mindset.

There are two types of business plans:- 

1. Traditional Business Plan
2. Lean startup canvas

A. Traditional Business Plan:- 

This is an in-depth business look at your firm. It includes details such as what your startup is, how many people are in your firm, your milestones, and the path you are going to use to achieve it. This tells investors why they should choose your firm to invest in.

B. Lean Startup Canvas:-

It is a general overview of your startup. It is usually a page document of your startup which includes the basic information of your company for your startups.

Step 3:- Select the funding type you will require to work on your startup.

a. Bootstrap:-

The most basic and easiest way to get funding for your startup. The basis of this funding is that, "Why should one go to other funders when they can fund their own startup." Believe it or not, most entrepreneurs have their own funding for their startups. If you fund and get your company rolling it will be easier for you to get further funding.

b. Friends and Family:- 

In most cases, if your plan is full-proof then your friends and family are interested in funding your startup. But if your company tanks then you can find yourself in a messy situation, in legal terms as well as in personal terms so make sure you have a proper repayment plan to overcome this situation.

c. Crowdfunding:- 

There are many crowdfunding sites that help an entrepreneur to get funding for their startups. Crowdfunding basically includes multiple people funding for a single project here there is no requirement of repayment unless asked by the funder as such.

d. Venture capital firms:- 

These are the firms that provide startups with funding in exchange for equity. Venture capitalists basically focus on the long-term potential growth of a firm and thus focus on being a part of the board of directors.

e. Startup Accelerator:-

These not only provide funding but also gives additional perks such as mentorship, business tools, etc for the growth of a startup. There are many startup accelerators in the market which help a startup to grow such as Udemy, Techstars, and Y Combinator.

f. Startup Incubators:-  

This is similar to startup accelerators, i.e. they provide tools and funding but the major difference is that it is a community where entrepreneurs are in a shared space on a lease that renews on a timely basis.

g. Startup grants:-

Startup funds are basically free money to launch that does not need to be repaid, which is given to entrepreneurs but with stipulations. That means if the grant is given for employment coverage you cannot use the grant for getting technological support. 

h. Startup Loans:- 

With the recent growth of startups, banks are providing startups with loans to get them on track. But as the name suggests loans require a proper business plan and lengthy documentation before getting a permit for the loan.

i. Startup Business Line of Credit:- 

If your startup is already on a roll and is earning, then you are eligible for a Startup Business Line of Credit. It is a line of credit that is given to entrepreneurs to keep their startups moving easily and cover their business expenses. But there are some conditions like your startup should be providing you returns for at least 6 months and have sustainable revenue streams.

To end this all we can say that startup funding can be a tiring process but as soon as you get funding it is very easy to maintain your company and its assets. Here at VCHeatroom, we provide you with help with the startup funding process.

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