5 Ways to Raise Funds for Your Business

3 min readOct 16, 2022

From starting your business to running or expanding it, funds are crucial to turning your ideas into reality. Initially, you may not want to borrow from third parties to prevent dilution of your equity or incur debt; however, deriving capital from other sources becomes imperative as the product development or manufacturing demand increases. Even after the initial setup, a business usually requires resources for expansion, inventory, and sales and marketing. Remote working may save you the cost of office spaces, but sometimes, getting an independent place is unavoidable.
So, here are 5 ways that can help you raise funds for your business.

1. Bootstrapping

The first method of raising funds for your business is one of the most popular ones, i.e., investing your own money, also known as bootstrapping. It is also the ideal approach for those skeptical about taking external help. When considering the other below-listed options, you should prepare a datasheet mentioning how many assets you have put into the fruition of your project. People will want to know if you are ready to risk your finances before they risk theirs. This also means reducing your expenses, be it in your personal life or professional. Spending your own asset and business profits prudently means having more money to invest in the growth of your business.

2. Loans

The Government of India has a range of schemes and policies to help entrepreneurs with their startups. Many state governments offer similar aid as well. However, most find private or public sector banks more convenient when applying for loans. You can apply for a working capital loan to meet the requirements of your current operating expenses or apply for a term loan for a lump sum fund. And if an entrepreneur does not qualify for bank loans, there are always Non-banking Financial Companies (NBFCs) and Micro Finance Institutions (MFIs) to offer their lending hands.

3. Crowdfunding

Crowdfunding is an excellent way to gather funds when you have a solid idea that you feel can win the masses quickly. Harness the power of the internet and create a strong pitch for your startup, explaining how it will operate, the running cost, how it plans to make a profit or make an impact, and what the incentive will be for the investors. Apart from collecting funds, a successful crowdfunding campaign also helps create a buzz around your business, giving it an initial publicity boost.

4. Angel investor

Individuals or companies with high net worth often decide to invest in small startups or enterprises, dubbing them angel investors. They offer the funding capital (or a part of it) in exchange for equity ownership, expecting a return when the business grows. As a business’s success is crucial for the investor’s profit, they also offer their expertise to help the startups create a commercially viable business model. In the early stages of your business, before you find your footing or decide to go big with venture capitalists, angel investors can be a good option for backing your operation.

5. Venture capitalists

Venture capitalists offer an excellent way to expand your operation for extensive growth, whether you own a startup or an established business. These private equity investors provide capital in exchange for an equity stake with their professionally managed funds. Though they often expect returns in a window of 3 to 5 years, the large sum they inject into the business is often just what an entrepreneur needs for sustainable growth on a large scale. VCs are very popular amongst go-getters for this high rate of return.

Planning where you will spend every penny before you apply for the funds is essential. Once you get that big boost, spending it on areas where it may not be necessary may seem lucrative. Even when you have excess funds, responsible spending will ensure your business can sustain itself in the long term.

What’s the best way according to you? To know more about the world of finance, listen to my podcast Figuring Out.