All About Fund Raising In India For Startups

Fundraising for startups

Funding is one of the most important factors for any startup or new business. In India now when anyone wants to start their own business, they are looking for the funding from family members or own saving or banks loan. But now the time has been changed and entrepreneurs are approaching angel investors in India. Even now government also support the small business with the MSME Registration schemes which provide financial & marketing support but still these days angel funding or venture capitalist are trending.

Why “angel investor” is called angel?

An angel investor is a financial specialist who is a rich person that consents to put resources into a small startup or business that is struggling to manage capital.

Commonly, angel investor speculators are business visionaries who may likewise be companions or relatives of the individual beginning the organization. They put capital in the organization’s originators, and also their business idea, and they credit the capital required for the small scale organization to get off the ground, by and large at more advanced terms than different banks. Regularly, angel investor financial specialists need their speculation to stay private.

Consequently for strengthening the business, angel investor financial specialists, for the most part, get proprietorship in the new organization, frequently as favored stock. Angel investor financial specialists are for the most part keen businessmen who can offer vital bits of knowledge and mastery to the new organization’s administration, particularly when the startup is in the angel investor speculator’s corner.

Angel investor financial specialists are not the same as investors. Angel investor speculators are normally people who need the business to succeed for individual reasons and in addition business reasons. Financial speculators are organizations that pool cash from well off gatherings, venture banks or different substances in the trust of harvesting a gigantic benefit.

Business visionaries who need assets to get their business going can profit by an angel investor financial specialist. Be that as it may, some angel investor speculators may too nearly screen how their venture is developing and performing, which may not be what the business visionary has as a primary concern.

Benign role of “angel investor” 

It’s important to note the fact that most angel investors like to invest in industries that they have significant knowledge and experience in. Another point to notice is that angel investors improve the values of the company they invest with when they participate beyond just the financing. Angel Investors ordinarily associated with a tremendous network of successful colleagues who owns noticeable amount of resources. Angel investors sometimes become investors because of being having successful ventures with the industries. Their investment is necessary but being able to find an investor with industrial knowledge can double your chances for company’s growth. Sometimes the role of these investors can be very beneficial if compared to the investment itself, and this thing ensures negotiation for angel investor versus equity.

A decent approach to guarantee you are getting great angel investor venture terms with your financial specialist is to genuinely take a gander at the measure of angel investor speculation you are attempting to raise. Trim it down your necessities on the off chance that you can. Ascertaining the measure of angel investor financing that you actually need is a standout amongst the most critical strides in this procedure – too little and you are under capitalised – an excess of and you could look astute.

Lastly as most angel investor speculators will like to put resources into commercial enterprises that they have significant information and involvement in, you will find that your odds of raising heavenly attendant venture will increment extensively in the event that you highlight how encountered your administration group is. Keep in mind, an Angel Investor is likewise putting resources into the general population who will lead your business forward, and in the event that you have a group set up that can impart certainty into a angel investor speculator that you have what it takes to maintain the business, and that you have the administration with adequate learning and comprehension of both the business and the general business – you may well find this is a noteworthy point in your arrangement that can show signs of improvement angel investor deal.

Checklist required to raise funding from Angel Investors –

  1. Registered Entity – Startups have to must register their business with the government. They can simply apply for the basic legal registration with the GST Registration or any other applicable registration & open a current bank account.
  2. Non Disclosure agreement (NDA) and IPR – you have to must prepare a NDA Agreement with the angel investor so you can protect your rights in the business and idea or execution of the startup. 
  1. Financial Projection with the Pitch Deck : – Pitch deck is summary of your business plan where you mentioned the cause of the problem with the solutions & a executive summary. 

Hope this article is helpful for all entrepreneurs who are thinking to start their own business but have problem due to lack of the funds. If you have any query just mentioned in the comment section.

About the author – Ankush Sachdeva is COO and Co Founder at MyOnlineCA, deals in business and tax registration across India.