This is how crowdfunding can elevate your business

Prabhjot Kaur
Prabhjot Kaur Feb 07 2018 - 4 min read
This is how crowdfunding can elevate your business
Where ‘Make in India’ initiative by the government has undoubtedly encouraged potential start-ups to come up with their unique business ideas, crowdfunding has given some of them a reason to taste success.

Crowdfunding can be considered as a fund that is raised for a project or venture by a large group of people, each contributing relatively a smaller amount of money, over the World Wide Web. But contrary to the popular myth, it is not only the common man who takes part in scoring the money for companies. Crowdfunding can be done by lone investors popularly known as angel investors or other more prominent companies. It is sometimes the only way you can raise the required funds for your company.

Securing a fund means securing money for a certain purpose or action. Funding is the practice of endowing a person or company with money by an organization or an individual or the government, for a certain purpose. It was estimated that in the year 2017, there were more than 9.5 million investors who provided secure investment through crowd funding to companies in need. It is an increase from 68% percent of the investors in the year 2012. It is blessed with an annual growth rate of 16.5% in the healthcare alone which is estimated to marginally exceed $280 billion by the year 2020.

Here are a few different ways of availing the successful funding for your business:

Angel Investment
It is one of the best ways to score the much-needed cash for the betterment of your company. The funding of the cash is done by angel investors who are wealthy personnel looking for the potential business that are both conventional or promising start-ups ways to invest in. This alternate form of investing is very popular among businessmen of today. It is an expected form of funding which offers up to 30% in equity to companies. Yahoo, Google, and Alibaba are few of the success stories made possible with the support of angel funding.

Companies – Mumbai Angels, Hyderabad Angels and Indian Angel Network are few of the popular Angel investors in India

Venture Capitalist
A venture capital investment company professionally manages the funds that are invested by them in various companies, usually against equity. They are known to use their exit plan whenever there is an acquisition or an IPO. It is a highly suitable investment plan for small businesses beyond the phase of startup and generating regular revenues. Fast-growth companies can gain up not only investments with the help of a venture capitalist, but also aid in the network and growth of a company.

Companies – Helion Ventures, Nexus Venture Partners, Kalaari Capital, Blume Ventures, Accel Partners, Canaan, Bessemer Ventures and Sequoia Capital are few of the popular venture capitalists.

Business Incubators and Accelerators
In the very early stage of funding, businesses can consider taking the help of Incubator and Accelerator programs that are a source of funding. Found in every other major city, the Incubator and Accelerator programs assist with hundreds of businesses in securing funding every year. There are a few fundamental differences between the Incubator and the Accelerator programs, even though they are used interchangeably. Incubators are more into nurturing a business by providing them with the training and tools to network their business. Accelerators also do a similar thing but on a giant scale. An Incubator can be seen as a parent nurturing their child and an Accelerator is more like the fast moving train running fast on the diesel of potential.

Companies – AngelPrime, Amity Innovation Incubator, CIIE, Villgro, IAN Business Incubator,TLabs and StartupVillage are few of the popular Incubator and Accelerator programs ready to help a company regarding funding

Over 94% of all the new businesses fail in their very first year of function. The lack of funding happens to be one of the frequent reasons as to why the businesses fail. This is why the scope or potential of the crowdfunding is immense. It provides you with sources of capital when you need it. It may be due to various reasons that you need cash fast which can be achieved with the help of crowdfunding. All you need is a clear plan of action that is well comprehended  by the investors to recognize the potential and you would be able to get the much-desired outcome.

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