Angel Investment Comes For Promising Startups

1
Many startup businesses begin with high hopes and
investor confidence. However, a few circumstances
can either make or break that enthusiasm of
business startups. Studies conducted by experts
indicate business startups give up just within
the first year due to several reasons, among them
finance is the first reason. The first
requirement for smooth running of any business
is nothing short of capital. Capital is the basic
ingredient for any business to thrive. Without
adequate finance, business startups crumble. Lest
this happens with ones business, one has to
ensure steady finance flow and that causes
startups look to financial backing for their
startups. Are you also one of those startups
looking for seed funding or venture capital?
2
In order to source for the required funding for
your startup business, you have to conduct the
right market data analysis research for your
startup. Self-funding, also known as
bootstrapping, is an effective way of startup
financing, especially when you are just starting
your business. First-time entrepreneurs often
have trouble getting funding without first
showing some traction and a business plan for
potential success. You can invest from your own
savings or can get your family and friends to
contribute. This will be easy to raise funds due
to less formalities/compliances, plus less costs
of fund raising.
3
Angel investment comes for promising startups.
Angel investor likes to invest in a companys
early stages of growth, with investor expecting
upto 30 equity. An angel investor prefers to
take more risks in investment for higher
returns. Angel Investment as a funding option
has its shortcomings too. Angel investors invest
lesser amounts than venture capital investors.
4
Venture capital is professionally managed funds.
VC investors like to invest in companies that
have huge potential. They usually invest in a
business against equity and exit when there is an
IPO or an acquisition. VCs provide expertise,
mentorship and act as catalyst for the
organisation. VCs evaluate the business from the
sustainability to scalability point of view. A
venture capital investment may be appropriate for
small businesses that are beyond the startup
phase and already generating revenues. There are
downsides too as regards to venture capital
funding option. VCs have a short leash when it
comes to company loyalty and often look to
recover their investment within a three- to
five-year time window.
5
Get funding from business incubators and
accelerators. Early stage businesses can consider
incubator and accelerator programs as a startup
funding option. Available in almost every major
city, these programs help hundreds of startup
businesses every year. Though used
interchangeably, there are few basic differences
between the two terms. Incubators are like a
parent to a child, who nurture the startup
business providing shelter tools and training and
network to a business. On the other hand,
accelerators are more or less the same thing,
but an incubator helps and nurtures a business to
walk, while an accelerator helps to run and take
a giant leap.