Raising Money
With a funding guide from the Government of India.
Business owners have an idea of how they’d like to scale and grow their business. The only problem? Capital. There’s not enough money to drive the growth they’d like to see and considering that startups are designed to search for a business model and expand rapidly, things get tricky.
It’s around this time that some businesses start to consider startup funding. Access to more capital means implementing better growth tools, expanding the team, and generally making the journey to profitability much smoother. The right early-stage startup funding can make the difference between hiring a key employee or missing out on sorely-needed talent.
There are numerous types of startup funding options. While each funding type will net you money, no two types are the same.
Crowdfunding
Crowdfunding is a method of raising capital through the collective effort of friends, family, customers, and individual investors.
This approach taps into the collective efforts of a large pool of individuals — primarily online via social media and crowdfunding platforms — and leverages their networks for greater reach and exposure.
Loans
A small business startup loan is any loan that helps businesses with little to no business history. It’s one of many financing options for founders looking to either get started or improve their young companies.
Small business startup loan is an umbrella term under which a few different types of financing fall.
Angel Investors
Angel investors are typically high net worth individuals who look to put relatively small amounts of money into startups, normally ranging from a few thousand dollars to as much as a million dollars.
Angels are often one of the more accessible forms of early-stage capital for an entrepreneur and are a critical part of the equity fundraising ecosystem.
Series Funding
Series funding is when a startup raises rounds of funds, each one higher than the next and increasing the value of the business. It’s described alphabetically: Series A, B, C, D, and E.
Business incubators
Business incubators sometimes invest a small amount of money in the company’s operation in exchange for 5-10% of the stock. The incubation period lasts from a few months to a year.
During this time, other incubator startups, the incubator’s mentors and other mentors are trying to get the startup into good shape for the next round of funding.
Click here to access the startup funding guide from the Government of India.
Weekly Round-up
🇮🇳 January 16 is a special day for startups in India. It was on this day in 2016 that the Indian government launched the Startup India initiative that has catalysed the startup ecosystem. So it’s only fitting that this is the date chosen as the National Startup Day.
🔋 Commercial EVs for the Indian market: Amazon is working with a number of companies on EVs for its global delivery network, one of which is EVage. The Indian company just raised $28 million for an electric truck-van-box that I must admit is rather fetching – provided you are the sort of person who enjoys brutalist architecture.
⚡ Bolt raises $355M as the online checkout war continues: Bolt has raised a huge new round of capital that pushes its valuation to $11 billion. Bolt provides an online checkout solution for other companies.
Funding Galore:
🤝🏿 The week saw a total of 12 acquisitions, with Curefoods adding five brands to its portfolio.
📈 The week also saw 21-year-old Fractal Analytics entering the unicorn club with $360 Mn of funding.
🤑 In the second week of 2022, the Indian startup ecosystem raised $697 Mn across 42 deals.
🦄 LEAD became the country’s sixth edtech unicorn after raising $100 Mn in a fresh round of funding.
That’s all for this week!