How to Fund Your New Project or Your Startup

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Are you finally taking the plunge to work on your dream startup? Or perhaps taking forward the cherished project that you always wanted to work on? That is incredible. However, after getting your business plan, services, offerings, goals and ambitions in place, comes in the worry for the moolah.

The big and important question. How do I fund my startup? In this age of booming new businesses and gutsy new entrepreneurs, securing funds in itself is a rat race. However, today, numerous options are available to fund your startup or project. These are rather exciting times for beginning a business.


Let’s get you started and look at the different ways in which you could fund your startup:

  • Consider bootstrapping:

    This is the oldest and most enterprising way of starting your business, when you are dearth of funds. Bootstrapping ensures that there is no equity dilution. Most experts recommend that you bootstrap your startup for as long as you can.

  • Seek help from family and friends:

    You could always seek help from friends and folks who would be interested in investing in your business. They could start you off with the initial funding, in return for some equity stake even. However, ensure that you are honest with them about the risks, the potential of your business, the feasibility of your plan etc. Consider returning the money after a stipulated amount of time, with some interest that is agreed upon mutually.

  • Startup contests:

    There are hordes of these contests occurring these days to showcase and help fund startups. They let individuals, companies, and even enthusiastic idea nerds participate. You just need to find the right platform to showcase your idea or product. Even though the prize money in such contests is small, it gives you visibility and even opportunities to work with investors.

  • Check out crowdfunding:

    There are many crowdfunding platforms in India and abroad that let you crowd source funds from people to support your startup idea/business. All you have to do is put your story together, put it up on a crowdfunding platform, share the story in your social network and help spread your story. People will then donate for your cause/project, share the story in their networks and the money keeps pooling in out of goodwill and the genuine desire to help see good projects and ideas come to fruition.

  • Find HNI investors:

    HNI or High Net Worth Individuals are ones with deep pockets and businesses possibly looking for more pies to dip their hands into. If your business could start bringing in cash flows in 2 to 3 years, you could connect with HNIs and get them to invest in your startup.

  • Impact investors:

    These are organizations that invest ins social entrepreneurial ventures or projects with a social cause. If yours is one, you could seek such investors. In 2013, the Indian Impact Investor Council (IIIC) was established in India. It is a self-regulatory body to encourage impact investing in the country.

  • Find an accelerator program:

    They are run like university courses, they have a fixed tenure and curriculum. They usually receive numerous applications every year for their programs which run for a few weeks to a few months. They provide startups with a small seed investment and access to a large mentor network, in exchange for a small equity stake, generally between 2.0% to 10.0%.

  • Find a startup incubator:

    Startup incubators usually provide you a work space, other equipments and even help you out with work resources in return for equity. Your idea’s potential has to be really strong. There are many startup incubators in India.

  • Find angel investors:

    There are Angel Groups such as the Indian Angel Networks, Mumbai Angels etc. that bring together several HNIs. These HNIs together or individually fund startups with varying degrees of investment. Such networks usually have certain minimum investment targets per network. They therefore are continually looking for promising startups to invest in; however, this scenario gets highly competitive.

  • Find venture capitalists:

    Once your startup is off the ground and running, you can seek venture capitalists to invest in your startup, based on your size and the kind of capital that you are looking at.

  • Go for a bank loan:

    Many banks in India offer small business loans to support startups and new businesses! You can also get loans for mid-to late-stage startups. There is no equity dilution here, and the onus of returning the money is all on your acumen. You get collateral-free loans at higher interest rates, and secured loans at significantly lower interest rates.

  • You could use your credit cards:

    Yes, some banks offer credit cards to small businesses and entities who are existing borrowers of the banks. This is one, small option that you could consider.

  • Government institutions, government startup funds, and semi-government grants:

    Many government institutions such as SIDBI, NABARD and NSIC support MSMEs by offering loans at lower-than-market-interest-rates. Regulatory requirements are in place to govern such lending. There are funds such as the India Aspiration Funds where the government directly invests in your business, and the funds are managed by industry veterans. You could also get a Make in India loan for startup businesses that fall under this impact group of the Make in India program. Several government grants are also available for startups working in socially important fields such as waste disposal, water management, defense, sustainable resources and sustainability, and biotechnology.

  • Financial Partners through Aggregators:

    It becomes difficult to sort out the best option from the above. But there are financial aggregators and loan distributors who can help you out in this tedious journey of finding a suitable way to avail the best of the loan for your project.

With so many varied funding options in place, you can now take your time to understand each of these options, or reach us to find the best one for you, chase it with gusto and give wings to your entrepreneurial dreams.

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