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What are Extraordinary Ways to Fund Innovative Startup Business?

Updated on May 4, 2020
PrateekJain24 profile image

Prateek is a banking professional who verifies and disburse loans to small and medium enterprises to helping them to grow their businesses.


Start-ups have become very common nowadays, which has great influence among youngsters. In stable market conditions, it is always beneficial to commence the start-up. There exists a great opportunity for aspiring minds who have the capacity to make their own brand. Therefore, with proper planning and adequate financial resources, you can start your business in such a manner that it will definitely grow up and expand in future.

Funding and fund-raising are the fundamental activity of any start-ups. The funding works in a 3 series i.e, in the series of A, B, C rounds. This series of funding involves different sets of investors at different phases of business conditions. Series A, B and C round of investment vary in time.

Today there are many entrepreneurs who want to launch their start-ups but they usually lack the required capital funds. So here in this article, I will share some relevant sources to raise funds for establishing start-ups successfully.

1. The CrowdFunding System

The conceptual framework of CrowdFunding Systems is similar to Mutual Fund investments. Under this system, investors invest in a business based upon crucial factors such as purpose to utilise the funds and descriptive allocation of funds by the organisation. If the business style is unique then, in that case, investors easily get attracted to invest in businesses with distinctive ideas and innovation.

There are many powerful players in the industry who are keen to invest in new business. Hence this system is gaining popularity on a very large scale day by day and helping in gathering funds right from the beginning. Here funds can also be raised from family, friends, and relatives, who believe there is some advantage to them from investing.

2. The Bootstrapping

Bootstrapping also known as self-funding is a very popular source of raising funds among various modern methods. In order to attract new investors to invest in the unique business model, it is necessary to build their trust in the business strategy.

Over time when the business starts to expand, it will ultimately lead to high profits. Hence this will attract more and more investors to invest in lucrative business ideas. By viewing the progress in a start-up business, investors will be attracted to invest in further schemes.

Bootstrapping is excellent when the initial funding requirement is small. This gives you the liberty to be your own boss. Managing funds under this option is very easy as there is no requirement of reporting to a superior and also there is no division of authority. Revenue and expenses will be personally monitored and controlled by the entrepreneurs who fund the idea.

3. Venture Capitalists

If your notion has the potential to grow and generate higher profits in future then you can approach venture capitalists. They are well-versed in managing funds and guiding entrepreneurs. Venture Capitalists assist to start business activities through consistent monitoring and deep analysis using modern strategies.

Until the new establishment launches its IPO, venture capitalists continue to support the new business. Once the company launches its IPO to raise funds from the secondary market they leave them. Basically, they aid in the first line of investment as well as in their management. Subsequently, once the business is set up and starts flourishing, they remove their involvement. Before planning to approach venture capitalists, one must know that they demand high flexibility so that they can monitor every business activity closely.

4. Angel Investment

Angel investment consists of a group of investors interested to fund the new business or innovative idea. Some high net worth investors assist small businesses or start-up to grow and expand their market capitalisation. Investors fund businesses without any commitment to returns on investment. Hence, in case the business fails to generate profits or incur any loss, no obligation will arise for capital repayment by the owners.

Passionate business Entrepreneurs, Doctors, Lawyers, Chartered Accountants or other professionals could be the angel investors. They are regarded as mentors for start-ups and also most of them have worked in top companies as an experienced executive officer. Hence their guidance and advice are very crucial for startup growth and development.

Google, Yahoo and Alibaba are some big companies whose business is grown as a result of the angel investment approach opted by them. It benefited them a lot by taking support from angel investment agencies at their initial stages.

How to Manage Startup for Assured Success?

The first and foremost questions that arise in people's mind is whether the startup will succeed or not? How to grow the startup idea efficiently? Here are some important ideas which guide me to measure the success rate.

1. Develop a Clear Strategy For Your Action

It is important to make a proper blueprint of all the activities that need to be undertaken so as to achieve select targets and objectives. Considering all the internal and external factors during the planning phase is a primary duty. The external factors include technology advancement, social influence, political policies, weather forecasting, and legal restrictions. Internal factors include human resources, organization goodwill, and corporate culture. In-depth evaluation of these factors is compulsory before proceeding further.

2. Be Consumer Visible Into the Market

Your products or services should be noticed by the end-user as soon as they are launched. If your product meets the customer satisfaction level then they will definitely buy it. Also, it will be spread to many people through Social Media influence as well as by Word of Mouth. Consumers have a habit of sharing reviews about goods used and services availed, so always make your goods and services from a customer comfort viewpoint.

3. Generate Debt Free Cash Inflows

At the initial level, there shouldn't be an instant profit or progress in the business. Having the patience to wait for revenue generation from the business activity is a wise decision. In order to capture a significant position in the industry, there should be a robust mission and vision statement of an organisation. Small and continuous demand will result in cash inflows, which ultimately motivate entrepreneurs to keep going with their mission strategy and encourages them to expand the product line horizontally or vertically.

4. Formulate a Powerful Team

Every organisation should follow both concepts i.e. being customer-centric as well as employees-centric. At the initial stage of the business cycle, you should build a strong team spirit among employees by motivating them through various motivational techniques.

When employees work in the team their efficiency as well as productivity increases. They must have the rights to participate in the decision-making process by sharing their knowledge and opinion over the matters. This will lead to a sense of belongingness among them. If decision-making rights are not granted to employees at their levels then waiting for approvals will consume a lot of time that will hamper the organisation's goodwill. Ultimately business growth is only possible by devotion and support by their employee and workers.


All methods that are discussed above are modern and effective. You can opt for any method or combination of two to raise funds. Hence before choosing any of them, you should consider their advantages and disadvantages.

If you adhere to the ideas mentioned above appropriately then you are good to go. Don't worry about your business progress so early, just keep following the above tips. Keep everything under monitoring and update the processes and technology when observed that they are getting traditional or obsolete. Although slowly and steadily you will surely achieve success. Remember successful business start-ups generate profits in the long term. Hence work with a wider perspective and vision to achieve higher targets.

This content is accurate and true to the best of the author’s knowledge and is not meant to substitute for formal and individualized advice from a qualified professional.

© 2020 Prateek Jain


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