If you have a good business idea then getting funding for your startup is not a big deal for you however putting all your eggs in one basket is not a good idea. A profitable idea is always a center of attraction for the investors, Different states or countries have different rules about starting up a new business but some of them are more or less the same in every region.
Here we discuss some of the sources of funding for your new business start-up that will definitely help you to choose which goes better for your business.
- Venture capital
venture capital is a fund provided by the company to finance a small business. venture capitalists are shareholders and are involved in the profit and loss of the company. it is more often used in the early or seed round of a company.
How is it helpful to start up a company?
Venture capital is a form of funding that helps to finance a business in its initial stage and also helps to grow the business. Generally, ventures capital priority to fund businesses or companies that have the high potential to grow, for example, information technology.
But keep in mind one thing, when you take funding from venture capital you lose a large size of your business as venture capitalists take ownership of your business and interfere in all managing and decision-making process.
Angels are investors who invest in new companies with return interest of profit and management authority. as they are experienced in their field so they can use their knowledge to expand the business.
Angel works actively in the company as a board of directors or Colleague. Angels are generally retired workers who command in their fields and they like to invest in those businesses that are related to their fields.
The good thing about angels is is you can use their knowledge and experience to expand the business that actually helps you not only in startup but also grow it.
- Business incubators:
If you have zero knowledge about the business and you want to start up then a business incubator is the best option for you.
They not only finance your business but also provide mentorship, education, and access to investors. They act like a father who grabs a child's finger till his child walks or runs on his own. You can only stay on incubation period till your business settle down, once it's settled business incubators let you do it on your own.
How to apply for a business incubator?
You need to follow the following process to apply for business incubation.
Apply: You need to fill out an application form which requires some basic knowledge of your experience regarding business and about you.
Interview: A short interview would be held In which they might ask about your previous business experience or activity and also ask about your idea that want that you want to execute.
Decision making: It might not take a lot of time to decide whether the application is accepted or not you get your answer within a week or two. You can apply for financial aid as well after acceptance.
In the above article, we discuss three sources that help in funding to start up a business.
Venture capital: good source of funding but require a large size of your business ownership.
Angles: they are experienced officer and intrested in investing in thier feild. Their experience can help to grow and startup business however, they require hold in the business.
Business incubators: they are mentors and help new business owners to establish their business by educate them also give them access to investors.