The document discusses various alternative funding sources for entrepreneurs and startups beyond traditional loans. It outlines options such as crowdfunding, incubators/accelerators, convertible notes, equity funding, grants and subsidies from government organizations, venture capital, angel investing, royalty financing, leasing equipment, and viability gap funding. Specific Indian government programs to support startups are also described, including funds set up by SIDBI and other state governments.
Startup funding scenario in India _Entrepreneur surveySaiswaroopa Iyer
Results of a brief survey conducted among entrepreneurs in India. The subject was about the early stage funding scenario in India. Entrepreneurs responded to several Questions about their experiences in raising funds, challenges faced and future expectations
Startup funding scenario in India _Entrepreneur surveySaiswaroopa Iyer
Results of a brief survey conducted among entrepreneurs in India. The subject was about the early stage funding scenario in India. Entrepreneurs responded to several Questions about their experiences in raising funds, challenges faced and future expectations
How to Register your Start-Up under Start-Up India schememyHQ
Start-up India is an initiative by the Indian government to promote the growth of start-ups and boost the Indian economy. This presentation will help you to learn how to register your start-up with the start-up India scheme
Research Project Report on Growth of Venture Capital Finance in India and Rol...Piyush Gupta
The research project report “Growth of Venture Capital Finance in India and role of Business Confidence Index” is undertaken as a part of MBA curriculum at Kurukshetra University. Venture Capital Finance is a mode of financing a high risk and new business ventures and is no more in the dormant stage in India.
The academic research study has been undertaken in order to know the current scenario of venture capital finance in India and to predict it near future rate of growth. The report also lookouts for market share of different economic sectors in terms of Venture Capital Investments and analyses growth of venture capital investment in these sectors.
The research project report further analyse whether values of Business Confidence Index can predict growth rate of Venture Capital Investments. For this reason Business Confidence Index by Confederation of Indian Industry (CII) has been used.
The report starts with Introduction to the topic i.e. Venture Capital Financing. It then throws light of this Industry in India. The report than provides objectives of this project, reviews of literature done and Research methodology used. It then provides details of Analysis and Interpretation followed by findings and conclusion.
This presentation carries complete knowledge of Venture capital which will be very helpful to understand the origin and the requirement of venture capital.
Venture capital in India is a big action by the Indian government in the term of industry development. Venture capital having more problem and also denoted what will be scenario of Venture capital in future !!
provides good description of meaning nature needs and challenges before venture capital in India and what are the steps which should be taken to encourage venture capital in India
Three Sides of the Coin with Oracle Data Integration 12c - ODI, OGG, EDQMaria Gyurova
This presentation shows the tight integration of Oracle Data Integrator 12c with Oracle GoldenGate 12c and Oracle Enterprise Data Quality 12c. The demo shows similar content as in the next three videos.
How to Register your Start-Up under Start-Up India schememyHQ
Start-up India is an initiative by the Indian government to promote the growth of start-ups and boost the Indian economy. This presentation will help you to learn how to register your start-up with the start-up India scheme
Research Project Report on Growth of Venture Capital Finance in India and Rol...Piyush Gupta
The research project report “Growth of Venture Capital Finance in India and role of Business Confidence Index” is undertaken as a part of MBA curriculum at Kurukshetra University. Venture Capital Finance is a mode of financing a high risk and new business ventures and is no more in the dormant stage in India.
The academic research study has been undertaken in order to know the current scenario of venture capital finance in India and to predict it near future rate of growth. The report also lookouts for market share of different economic sectors in terms of Venture Capital Investments and analyses growth of venture capital investment in these sectors.
The research project report further analyse whether values of Business Confidence Index can predict growth rate of Venture Capital Investments. For this reason Business Confidence Index by Confederation of Indian Industry (CII) has been used.
The report starts with Introduction to the topic i.e. Venture Capital Financing. It then throws light of this Industry in India. The report than provides objectives of this project, reviews of literature done and Research methodology used. It then provides details of Analysis and Interpretation followed by findings and conclusion.
This presentation carries complete knowledge of Venture capital which will be very helpful to understand the origin and the requirement of venture capital.
Venture capital in India is a big action by the Indian government in the term of industry development. Venture capital having more problem and also denoted what will be scenario of Venture capital in future !!
provides good description of meaning nature needs and challenges before venture capital in India and what are the steps which should be taken to encourage venture capital in India
Three Sides of the Coin with Oracle Data Integration 12c - ODI, OGG, EDQMaria Gyurova
This presentation shows the tight integration of Oracle Data Integrator 12c with Oracle GoldenGate 12c and Oracle Enterprise Data Quality 12c. The demo shows similar content as in the next three videos.
Funding Sme – The Challenges And Risk Within - Alternative financing sources ...Resurgent India
Securitization of Trade Credit: Trade credit is an important source of financing for MSMEs, as they sell on credit to their large customers and then wait for long periods for payment. If these receivables (trade credit) could be packaged as a securitized asset, which would essentially be a commercial paper with the credit rating of the large firm, it could help MSMEs reduce their investment in working capital and their need for finance significantly. The credit worthiness of a typical MSME would also improve, qualifying it for greater bank funding. Though the securitization process which is similar to factoring, could be more cost-effective than bank funding, factoring, and letters of credit.
Financing Alternatives for Start-Ups and Small Businesses.pdfPay10
Entrepreneurs play an impactful role in the economic development of a country. Their responsibility is not just limited it making their profits but also creating employment opportunities, driving innovation, developing new markets, and innovating new products etc. Entrepreneurs are the valuable assets of the country who initiate to address socio-economic problems and find solutions for them.
Empower your business capital funding solutions that understand your unique needs and aspirations. These solutions are designed to support and guide you on your journey to success. Whether you're a small startup or an established business, capital funding can provide the resources you need to grow, innovate, and make a positive impact.
Need capital to start, grow and manage your business, we provide loans in the form of short term loans and long term loans, check your ability to get a loan by bank loan rating and credit score check. Get complete information about the Syndication & Funding right from Term Loans to Unsecured Loans and the Process.
Raise funds for start-ups is the top priority for starting any business. To start any business, capital is the most major thing that we need, as most of the companies fails due to lack of capital. Therefore entrepreneurs should take care how to raise funds for start-ups at every stage of business development.
Types of financing,
availability of loan for a business,
features of loan for a business,
ways of loan for business,
financial management,
innovative financial services
Meaning
characteristics
Advantage
Stages of financing
risk in each stage
Method of venture financing
Development of venture capital in india
Rules and regulation
critical factor for the success of VC
From Startup to Success Navigating Business Funding Services.Clean Slate Services
When starting a business, one of the biggest challenges is securing the necessary funding to get off the ground. That’s where Clean Slate Services comes in. We specialize in guiding entrepreneurs through the funding process, helping them secure the capital they need to turn their startup into a success.
Website - https://csservicesnc.com/
1. New Methods of Funding
Money is always eager and ready to work for anyone who is ready to employ
it
By- SALAJ GOYAL
2. For entrepreneurs with a lot of money saved up, the only obstacle to starting a business is
coming up with a viable idea. However, many aspiring business owners have the opposite
problem — the idea is there, but the capital is not. Clearing the startup-financing hurdle is
made even more difficult by the fact that brand-new entrepreneurs are often turned down for
business loans. Traditional bank loans have always been tough to secure, and although loans
funded by the Small Business Administration are typically more accessible, it is getting more
competitive.
When an entrepreneur asks for money, he is to explain to the potential investors how he
plans to spend their money. Straightforward, right?
The only problem is that most descriptions of “use of funds” are incredibly generic and
standard, typically involving the following:
· hire key personnel
· product development
· sales & marketing
Entrepreneurs should have an idea on what critical milestones need to be
achieved to justify the next big step. Maybe it is a certain number of paying
customers, or a certain number of free users. It could be traffic, or some other key metric
(or a few metrics / targets) of importance.
Apart from funding your business through Bootstrapping, Friends and family, Loans
or lines of credit, Incubators, Angel investors, Venture capitalists, Bartering, Forming a
partnership, Committing to a major customer or from philanthropists, there are
other sources available around us which will ensure easy money and less
equity dilution like:-
Government of India (Budget 2015-16)
When finance minister, Arun Jaitley was about to open his ‘Goodie Bag’ while presenting
the union budget 2016, expectations from the start-up community were sky high. In order to
boost small business and MSME sectors, Mr. Jaitley announced various schemes and
policies in sync with the Startup India Action plan announced previously by PM Modi.
· Rs 500 Crores earmarked for SC/ST and women entrepreneurs under the
Startup India scheme.
· Setting up of a fund to raise Rs 2,500 crore annually for four years to finance
startups.
· 35 new incubators in existing institutions. The Central Government for
establishment of new incubators for which 40% funding by the respective State
Government and 20% funding by the private sector has been committed shall
provide funding support of 40% (subject to a maximum of INR 10 crore). The
incubator shall be managed and operated by the private sector.
· 35 new private sector incubators. A grant of 50% (subject to a maximum of INR
10 crore) shall be provided by the Central Government for incubators established
by private sector in existing institutions. The incubator shall be managed and
operated by the private sector.
3. · ‘Pradhan Mantri Micro Units Development and Refinance Agency Limited
(MUDRA) ‘starts with an initial corpus of Rs. 20,000 crore to extend benefits to
around 10 lakhs SMEs.
Entrepreneurs are supposed to submit the business plan and once approved, the
loan is sanctioned. They get a MUDRA Card, which is like a credit card, which
they can use to purchase raw materials, other expenses etc. Shishu, Kishor and
Tarun are three categories of loans available under the promising scheme.
Examples:-
· Venture Capital Funds Promoted by the Central Government
o SIDBI Venture Capital Limited (SVCL)
o IFCI Venture Capital Funds Limited (IVCF)
· Venture Capital Funds Promoted by State Government
o Gujarat Venture Finance Limited (GVFL)
o Kerala Venture Capital Fund Pvt Ltd.
o Punjab Infotech Venture Fun
o Hyderabad Information Technology Venture Enterprises Limited
(HITVEL)
Convertible Bonds
When a company is young, quantifying its valuation is often an arbitrary, pointless
exercise. There may not even be a product in hand, let alone revenue. But companies at
this stage may still need to raise money, and if investors decide on a pre-money
valuation of say, $100,000, another $100,000 suddenly buys control.
Convertible debt (also called convertible notes) is a financing vehicle that allows Start-
Ups to raise money while delaying valuation discussions until the company is more
mature. Convertible notes are meant to convert to equity later, usually a round of
funding. (Often notes convert to equity during a Series A round of funding.)
Capped Notes V/s Uncapped Notes
Entrepreneurs and investors agree to a “capped” round, a means that they place a
ceiling on the valuation at which investors’ notes convert to equity.
Therefore, if a company raises $500,000 in convertible notes at a $5 million cap, those
investors will own at least 10% of the company after the Series A round
($500,000/$5M).
An uncapped round means that the investors get no guarantee of how much equity
their convertible debt investments will purchase, making these kinds of investments
most favorable for the entrepreneur.
4. A company that raises $500,000 in an uncapped round. If they end up making so much
progress that, they convince Series investors to agree to a $10 million valuation, this
means that their convertible note investors are left with just 5% of the company, half of
what they would get if they capped the round at $5 million.
Viability Gap Funding
There are many projects with high economic returns, but the financial returns may not
be adequate for a profit-seeking investor.
For instance, an investor may seek connectivity of several villages to a nearby town. This
would yield huge economic benefits by integrating these villages with the market
economy, but because of low incomes, it may not be possible to charge user fee. In such
a situation, the project is unlikely to get private investment. In such cases, the
government pitches in and meets a portion of the cost, making the project viable. This
method is known as viability gap funding.
Working of the scheme
Under VGF, the central government meets up to 20% of capital cost of a project being
implemented in public private partnership (PPP) mode by a central ministry, state
government, statutory entity or a local body. The state government, sponsoring ministry
or the project authority can pitch in with another 20% of the project cost to make the
projects even more attractive for the investors. Potential investors bid for these projects
based on VGF needed and Business Feasibility Model.
Eligible sectors
Projects in a number of sectors such as roads, ports, airports railways, inland waterways,
urban transport, power, water supply, other physical infrastructure in urban areas,
infrastructure projects in special economic zones, tourism infrastructure projects are
generally eligible for viability gap funding. The government now proposes to add social
sectors such as education and health to the list.
BIRAC
The Department of Biotechnology is implementing the following measures along with its
Public Sector Undertaking Biotechnology Research Assistance Council (BIRAC):
· Bio-incubators, Seed Fund and Equity Funding
5. · Biotech Equity Fund – BIRAC ACE Fund in partnership with National and
Global Equity Funds (Bharat Fund, India Aspiration Fund amongst others) will
provide financial assistance to young Biotech Startups
WARRANTS
Warrants are a special type of instrument used for long-term financing. They are useful
for start-up companies to encourage investment by minimizing downside risk while
providing upside potential.
For example, warrants can be issued to management in a start-up company as part of
the reimbursement package.
A warrant is a security that grants the owner of the warrant the right to buy stock in the
issuing company at a pre-determined (exercise) price at a future date (before a specified
expiration date). Its value is the relationship of the market price of the stock to the
purchase price (warrant price) of the stock. If the market price of the stock rises above
the warrant price, the holder can exercise the warrant. This involves purchasing the
stock at the warrant price. Therefore, in this situation, the warrant provides the oppor-
tunity to purchase the stock at a price below current market price. Generally, warrants
contain a specific date at which they expire if not exercised by that date
Leasing Business Equipment
Equipment leasing is a loan in which the lender buys and owns equipment and then
"rents" it to business at a flat monthly rate for a specified number of months. At the end
of the lease, the business may purchase the equipment for its fair market value (or a
fixed or predetermined amount), continue leasing, lease new equipment or return it.
Advantages include getting your hands on needed equipment without paying the costs
up front. Lines of credit stay freed up because the leases are not bank loans, and lease
payments can potentially be deducted as a business expense. It is also possible to easily
upgrade equipment once a lease expires.
Royalty Financing
Business owners guarantee investors a percentage of their revenue over a period, paying
them back the advance of cash. Deals usually run at 2 to 6 percent of increased
revenue and deals can run into the millions of dollars. It is well established in
industries from mining and music, in which revenue is steady when it is coming in, but
also unpredictable. This is a potentially great financing mechanism for business owners
who need a quick infusion of cash for their enterprise, and do not want to give up control
6. to equity investors. In addition, there are no worries during a down month for sales,
because payments are tied to a percentage of revenue.
Crowd funding
Crowd funding is the process of raising money to fund what is typically a project or
business venture through many donors using an online platform, such as
· Kickstarter
· Indiegogo
· Wishberry
· Ketto
· Fundlined
· Catapooolt
· Crowd funder.
Crowd funding is typically done through an online platform that allows the fundraiser to
set up a public campaign for accepting donations. People can donate a specified amount
through the fundraising campaign’s website and often receive some sort of
acknowledgement or reward in return for their donation.
TYPES
· Donation-Based Crowd funding: - Broadly speaking, a campaign in which there
is no financial return to the investors or contributors as donation. Common donation
based crowd funding initiatives include fundraising for disaster relief, charities,
nonprofits, and medical bills.
· Rewards-Based Crowd funding: - It involves individuals contributing to your
business in exchange for a “reward,” typically a form of the product or service your
company offers.
· Equity-Based Crowd funding: - It allows contributors to become part owners of
your company by trading capital for equity shares. As equity owners, your
contributors receive a financial return on their investment and ultimately receive a
share of the profits in the form of a dividend or distribution.
· Debt-based (peer to peer, P2P, marketplace lending, crowd lending):- Borrowers
apply online, generally free, and their application is reviewed and verified by the
website management. Investors buy securities in a fund, which makes the loans to
Individual borrowers or bundles of borrowers. Investors make money from interest
on the unsecured loans.
7. Examples
· Pebble Smartwatch- $10.2M
· OUYA- $8.5M
· PonoMusic- $6M
· Bivtore- $4.5m
Incubators & Accelerators
Early stage businesses can consider Incubator and Accelerator programs as a funding
option. Found in almost every major city, these programs assist hundreds of startup
businesses every year.
Though used interchangeably, there are few fundamental differences between the two
terms. Incubators are like a parent to a child, who nurtures the business providing
shelter tools, training, and network to a business. Accelerators so more or less the same
thing, but an incubator helps/assists/nurtures a business to walk, while accelerator
helps to run/take a giant leap.
These programs normally run for 4-8 months and require time commitment from the
business owners. You will also be able to make good connections with mentors, investors
and other fellow startups using this platform.
In US, companies like Dropbox and Airbnb started with an accelerator – Y Combinator.
In India, popular names are
· Amity Innovation Incubator
· Angel Prime
· CIIE
· IAN Business Incubator
· Villgro
· Startup Village
· TLabs