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15 Ways To Get Startup Funding For Your Startup

15 Ways To Get Startup Funding For Your Startup

At the last count, 7,200 Startups figured in India alone

For every successfully funded startup, there are at least a dozen who could not make the cut

The opportunities to fund your startups vary from own finances to Venture Capitalists

To say Startups are the in-thing is sort of repeating a cliche. The last decade or so startups booming or startups mushrooming (depends on which side you are) has been one of the hot topics- on and off the internet. At the last count, 7,200 Startups figured in India alone, according to the National Association of Software and Services Companies (NASSCOM)- the premier non-profit trade association of Indian IT and Business outsourcing industry.

In a way, this culture which has ushered in teenage billionaires and tech wizards have rewritten the mosaic of business once for all. With this phenomenon surfaced the concept of startup funding- a relatively new mode of financing business enterprises.

As more and more techpreneurs and science czars kick off cosy jobs to launch their own business and furrow their ideas to fruition, the big question staring at everyone is the big F – Funding. While ideas are relatively more elastic and oozing more profusely, apparently, monetary support to sustain these (ad)ventures are comparatively far and few.

Or so it seems at the outset. But a deeper peek into the whole scenario might present a heartening picture on the whole. According to NASSCOM, the startups in India registered a 108 per cent growth in total funding from $ two billion in 2017 to $ 4.2 billion in 2018.

Having said that, it would amount to presenting only the rosy side of the entire issue of startup funding. For every successfully funded startup, there are at least a dozen who could not make the cut. Even seemingly look-alike ideas and startup entities end up being on different ends of the scale of success.

The reasons might be many, but prominent among them is a lack of comprehension in tackling the exciting but equally excruciating task of funding your startup.

Startup Funding: An Art Or A Science?

Whatever it is, it is certainly not Rocket Science. At least not any more. For that matter, even Rocket Science seems to have been deciphered by Elon Musk– the maverick startup specialist! So, nothing is impossible. What the heck! Why am I running into cliches all the time?!

Well, to put it simply, it needs a methodical approach to succeed in finding financial support to your venture. An understanding of the avenues available, a thorough analysis of suitability and your preparedness to pitch in an impressive way are the precursors for your success.

Finding and finalising Startup funding calls for discretion and staying clear off from being caught in the weeds.

Ways And Means

The opportunities to fund your startups vary from own finances to Venture Capitalists. Take a look.

Self-help: Bootstrapping

Put yourself in, fully, without stretching yourself to the breaking point. It is the first recourse of most startup founders to tap self-funding avenue without cutting corners in personal life. It is important to analyse the requirement of quantum, your ability to fund it before committing to writing a self cheque for yourself.

Talk to members of the family, take guidance from the known circle of winners. Do your homework, know what it means to your immediate family. Don’t sell pipe dreams to yourself and family. If your savings is enough to take your venture to the next level without compromising the quality of your family life, go ahead. The best part is, no legal documentation needed. Best suited for first-time business owners and tiny startups.

Friend Request

Friends are like a safety net. They are accessible, empathetic and tremendously confident of your capabilities. Tap them. Reach out with a passion for all your friends and acquaintances. Communication is the key. Talk, chat, share.

You may seek a low interest-bearing loan or interest-free loan from them. Again, the process of funding your need at this level would be devoid of any long winding legal formalities or documentation. And a relatively a very supportive source than an unknown agency.


As the name suggests, this is the place to go for guidance for startups. Not just funding, (and incidentally they do not fund by themselves) they provide the nourishment needed from all perspectives during the neonatal stage of the startups.

They are early stage growth enhancers and provide the much needed multi-dimensional support services starting from office space sharing to access to finance. The best place for a startup to hone up and learn the steps to find funders.

Several institutions cutting across domains have set up incubators to enhance the startup ecosystem in a healthy way. From education sector like the Ahmedabad branch of Indian Institute of Management’s CII IIMA (in collaboration with State government of Gujarat and Indian government) to Indian Angel Network’s IAN Incubator, there are several incubators for the startups to approach.


Though functioning on similar lines as Incubators, Accelerators have a more well-defined agenda and program structures. They typically offer short term supportive services with hands-on guidance from experts and mentors drawn from diverse fields of business, technology and finance.

Go Private

Reach out to the unknown. This involves a degree of ingenuity. It was called “Private Placement” in BC – Before Crowdfunding -era! It was a remarkable success when putting to test in the early 1990s. Make out a crisp business plan; target high net worth individuals who frequent elite clubs of your city, members of prestigious trade and business houses, stockbrokers (remember, their clients are regular investors in public shares).

Offer a reasonable and assured rate of returns. The added advantage you have with these folks is you are “identifiable”, unlike in the corporates they invest. It lends a sense of security to the investors. Rope in a legal guy to guide you with the required paperwork.

Crowd Funding

This is what most startups and individuals seeking to address social causes do. Hit the social media in a big way. There are several crowdfunding facilitators (platforms) which can do your job for a fee.

  • Kickstarter
  • Gofundme
  • Indiegogo

are a few prominent platforms for crowdfunding activity.

This avenue is a relatively obscure one in the sense that none of the prospective investors has any personal rapport with the startup founder and is just influenced by the product/service that is being pitched for.

How To Go About For Startup Funding

Has an amazing video made of your product/service to showcase its uses and upload in the platform? Pitch for a markedly low percentage of your total required funds for generating investor-interest. Remember, as Wil Schroter, the Founder and CEO of, says: “If you are trying to raise $100K, start with a $10K target. The reason is that getting the first bit of commitment is exponentially harder than the rest of it.”

Government-Sponsored Programs

Enroll and participate in government-sponsored interfaces like the Investor Hubs, Startup Hubs etc. They give a good exposure for budding and disruptive initiatives. Higher visibility, that too in the related environment is a perfect catalyst for your startup funding efforts.

Financial Institutions

By far the most traditional avenue for funding, Banks are considered a more secure and relatively more swift route to secure funds for startups. The banking sector too has opened up with innovative schemes and policies to propel the startup ecology in the economy.

With a wide network and well-honed up human resource capabilities, Banks can provide swifter and economical funding solutions. One major advantage with Bank funding is the near-total absence of funding cost to the borrower. But the downside is the sector’s conservative outlook.

Another advantage of mobilising funds from banks is the availability of more than one option. Banks have schemes to fund the day to day running expenses of the borrower – called Working Capital. It is helpful for the entrepreneur as the monthly overheads of the business are financed by the institution. The business owner can focus more on the core activities without being tied down by financial constraints.

Banks also fund the entire project including the capital cost. A wholesome analysis of the

  • Viability of the Product/Service
  • Market opportunities
  • Business owner’s credentials
  • Financial stability of the business promoters
  • Case study of comparative business enterprises

are conducted before the startup is funded by them.

Non-Banking Institutions

These entities are equally effective and most of the times, their processing time is faster when compared to the conventional banking sector. Non-banking financial companies (NBFCs) are in a way poor cousins of bank behemoths but are well endowed with funds to cater to their limited clients effectively.

Paper or legal work too is pretty simple with them and are known to take a more holistic view of the startup ecology when it comes to startup funding.

Another differentiating factor is that Accelerators provide seed funds to startups on their own. The selection process to qualify for their funding is acutely stiff. Most programs at Accelerators are of 90 days to six months duration during which period the startups can learn the ins and outs of the business.

Micro Financers

Though akin to NBFCs, microfinance institute is a type of banking service that offers microcredit on reasonable terms. However, their exposure would not be high and is spread thin over a large segment of people. If the fund requirement of the startup is relatively small, microfinance companies are an ideal bet.


Though a very remote avenue, it sometimes works best for startups. A plethora of online competitions offering tidy prize money is up for grabs. Not a bad idea to check, participate and try your luck.

Bridge Finance

This route is just a stop-gap arrangement, a prelude before the final deluge! This source is ideal for those startups who find themselves in a ‘so near yet so far’ situation. The lender could be anyone – ranging from a friend to a financial institution – depending upon the required quantum. Or even availing the available limits offered by the Credit Cards. A very high voltage avenue, best not utilized unless sure of meeting the obligations in time.

Angel Investors

They are high net worth individuals or groups operating on the principle of high risk-high returns. Angel investors offer equitable funding and are highly objective and acutely aware of the emerging markets and technology. A typical angel investor would prefer to take equity off the startup and would work with the founders at the ground level.

Founders will have to cede the luxury of independent functioning when an Angel investor evinces interest and funds the startup. That is more than a justifiable trade-off as the startup will not starve for funds.

Venture Capitalists

This is the ultimate go-to source for almost all startups before going public. VCs are slush with money, experience, hands-on knowledge of the business of diverse domains, subject matter experts – its a cornucopia of talent. Very discerning and highly objective, Venture Capital entities provide funding as well as guidelines for the growth of startups. They look for the abilities of the founders and their team and traction for their product/service to arrive at a conclusion.

It is imperative for startups to put the best foot forward and present a wholly captivating picture before the VC for a positive result. An amazing and crisp pitch deck highlighting the problem their startup is going to address, their USP, traction so far with facts and figures are important to win startup funding from the VC.


Initial Public Offer (IPO) is the ‘final’ recourse for startups to garner funds for their ventures. The process is pretty elaborate, replete with multiple statutory stipulations and formalities. This route is highly beneficial and feasible for those startups with an impressive track record of profits and reputation and which are on the high-velocity growth band.

Eligible startups can take the guidance and direction of seasoned IPO experts like Consultants, Merchant Bankers, Brokerage Houses to go through the process of IPO. Participating investors are offered equity in the startup based on their investment level. A successful IPO will mean the startup has joined the higher league of business with a reach for a wider arena to operate.

Not every route is suitable for all startups. It calls for an incisive study and objective analysis before taking the final leap. Additionally, the avenues too differ invariably depending upon the stage of the startup. Efforts to find Startup funding for your business must not be a trial and error exercise.

“The world has enough for everyone’s need, but not enough for everyone’s greed.” ― Mahatma Gandhi.

Note: The views and opinions expressed are solely those of the author and does not necessarily reflect the views held by Inc42, its creators or employees. Inc42 is not responsible for the accuracy of any of the information supplied by guest bloggers.