Entrepreneurship is not about just starting a business, it’s about creating a solution that can add value to the life of others. And if you think your idea fits into this criteria during such an intense situation, it’s your time to kick-start.
Coronavirus has hit hard the entire human race. From Italy to India, countries around the world are taking several measures to slow down the turbo speed of Coronavirus. And this has led to the lockdown of about one-third of the entire global population.
Yes, this means, work from home, spending more time with family and of course more internet usage.
While it has negatively affected most of the industries, it has proved to be positively transformative for online service providing businesses.
According to Cloudflare, a service provider for internet optimization security and availability services to around 10% of the world’s websites, demand for video conferencing, streaming services like Netflix, news and online shopping coming from residential broadband networks is surging. And this means a great opportunity for online businesses to start selling.
But how can you start a business right now and get even funded?
While having a good idea with the right team is important, to get your startup funded is more important. Why? Because without proper funding, you won’t be able to pay your team and ultimately there will just be an idea, termed as a failed idea.
According to a recent report by KPMG since 2008, the number of startups has gone from 7,000 to 50,000 in 2018. And that’s a whopping 7.14 times. But do all the startups succeed? No! In fact, a staggering 90% of those startups, won’t survive even for the first five years.
And the most common reason behind this is “lack of funding”.
So, in this article, we’ll be discussing how to get your startup funded during the corona pandemic.
How To Get Your Startup Funded During This Pandemic?
While there are many ways of getting a startup funded, there are three primary ways:
- Venture Capitalists
- Angel Investors
Let’s dive deep and understand what fits your startup idea the best.
Do you have a startup that possesses the highest growth potentials? Well, if you do then the top-tier investors are looking for you. Venture Capitalists or VCs usually invest in startups in exchange of equity at the time of Initial Public Offering (IPO). In addition to the monetary investments, VCs provide entrepreneurs with mentorship, expertise and evaluation reports regarding sustainability plus scalability as per their observations.
However, venture capital investment is preferred to those kinds of startups that have crossed the initial phase and are generating enough revenue. Another issue with VCs is that they come with a short term plan like three to five years. And if your startup requires more time than that for getting a foothold, VCs might not invest.
In a nutshell, people with surplus money who look forward to investing in up-and-coming startups are called angel investors. Along with capital, they also mentor the startup for a sustainable future. Some of the best examples of companies that were funded by angel investors are Amazon, Starbucks, and Apple.
Where to find angel investors for your small business or startup?
Here are the two most common sources for finding angel investors:
Wealthy Individuals: People like wealthy businessmen, doctors, lawyers or anyone who have sufficient capital and are looking to invest a substantial amount in emerging startups in exchange of equity. There are several websites and online portals that you may refer to in order to find such individuals.
Family and Friends: One of the most common funding methods is to get funded by our near ones. You may start by sharing your idea and business proposal with your own family and friends who might be interested and are capable enough to fund your startup.
This is by far the best way of generating funds for your startup. Put simply, crowdfunding is a method of generating funds from several investors instead of just one. Here are three types of crowdfunding:
Reward Crowdfunding- As the name suggests, in this category investors receive a reward (a gift or product sample) in exchange of the investment.
Debt Crowdfunding- In debt-based crowdfunding, startups need to return the amount taken from the investors within a given deadline.
Equity Crowdfunding- In this category, startups raise funds from investors in exchange of equity.
In the past few years, crowdfunding has become the most preferred way of raising funds for small to medium-sized businesses because of the ease of the process. All you need to do is select the right crowdfunding platform, put forth the business details, and the amount required. Once done, the platform will showcase your startup details in front of potential investors.
Some of the best websites for crowdfunding in India are Kickstarter, Crowdpouch, Indiegogo, and Patreon. Most of such platforms helps to get funded in just three steps: Upload your campaign, add all the necessary details and launch and start receiving funds.
You got an idea and then wanted to test it in the real world scenario but suddenly this deadly pandemic put a pause on it. But is it really necessary to wait until this pandemic ends? Not necessarily, especially for those who want to start providing online services. So buckle up and get started! The investors are looking for you.