It’s the most effective way of funding your business in its initial stage. It helps in avoiding formalities and avoids the cost for raising fund from other sources. This funding process is also considered as first option because of its many advantages one of its advantages are it helps the owner to tied to its business as he has put his money in it. Any startups backed by the bootstrapped in its initial stage shows that the person has uses its savings and these types of owners have one goal i.e. to enhance their product in the market and wishes to raise revenue from it.
In this type of funding company raises fresh capital by issuing its
company shares to public, investors or financial institution. Those who
purchases the shares becomes the shareholders of the organization as they have
received ownership interest in that company.
There are 3 types of Equity funds: -
A one can Figure out the meaning of this term by spelling out i.e. getting fund from the crowd as we can elaborate that collection of small amounts of capital from large number of people. To receive this type of funding a one requires vast connections with peoples,or one can try to put itself on social media platform to get the world out about its idea, with the goal of attracting investors. Currently these types of funding gaining a lot of popularity because of its unique way of funding the startups. Its just like getting loan or investment from different sources at same time. One should keep in mind as these may be most popular way of funding but its very competitive place to earn funding , so if you have a concrete, effective plan and market strategy ready with you then you are in the game otherwise you are nowhere standing in this competition.
Bank Loans can be a better option regarding investment for a startup as it has very less demand in compare to other source of funding like you don’t have to give up your control of business, a one can opt for this mode of investment if he has a good knowledge of interest rates that comes with each options. But where the term money and fundraising comes one should assume that there must be some hurdles like wise in bank Loans it involves lots of documentation and paper work, have to choose best option for repayment otherwise you may land your self in trouble last and not the least the money have to be paid back whether you business succeeds or not.
Startups can participate in multiple eventsto present products. Organizers awards prizes to first, second and third place winners from the contest and in addition, prizes also awarded in special categories. This money helps startups to run business without offering equity.
SBA Loans, which is known as Small Business Administration Loan, these types of funding are received from the government administration who are devoted to assist the small business to achieve their goals. It mostly helps and backed the small business. The most important thing about these types of loans is, they don’t come directly from the SBA you have to find a local lender who provides SBA loans in order to receive the funding.