How To Raise Seed Stage Capital In India

The Indian startup ecosystem has long been trying to gain the attention of potential investors. Despite being a land of huge talent, entrepreneurs with seed stage stage often need to go through a very tough phase to raise capital in India. Especially, banks make it the most difficult for entrepreneurs as they invest only if a startup has started earning revenues or it is an already established company. If you too are planning to raise seed stage capital in India, here are some of the most common sources you should check out instead of running from one financial organization to another.

Sources For Seed Stage Capital In India

  • Your Personal Fund

    Remember, your personal fund is not just a source of capital but also a potential certificate to prove the growth potential of your startup. In fact, any venture capital firm, at a later stage, would love to invest in your startup based on this aspect that you have utilized your personal fund in the growth of the company. If not 25 to 50 percent then at least 10 percent from your personal fund can also help you make a good impression.

  • Your Revenues

    Though not an enormous source but it definitely is another effective way to support your startup at this stage. Not to mention that you can also show other investors that you are capable of backing the firm with its own revenues. And the impression will be quite positive for sure!

  • Crowdfunding

    Trending rapidly around the world, crowdfunding is another cool way to finance your startup. This lets you showcase your product to the world, pre-sell your products to consumers on the internet and gain the capital to manufacture the products. Many successful startups have used this financing option as a stepping stone to their success. However, it definitely needs a lot of effort to make your business go viral on social media and other online platforms but the effort you put is worth it at the end.

  • Friends/Family

    Though friends and family members also make a very common source of finance, you should still be very careful while dealing with your close relations on such matters as there are chances that you might end up breaking your relation with the person which is definitely not a good idea.

  • Angel Investors

    These wealthy individuals are a very common source of finance for high potential startups that aim to gain a successful position on the global platform. These investors usually do not take part in a company’s management matters but they make the investment with an aim to back high potential startups so that they can grow, succeed and bring a significant change to the society. In return, they can take a small percentage of the profit share made by the investee company.

  • Venture Capital Financing

    Quite like angel investors, venture capitalists also invest in high-potential startups but with the exception that they do so only when they foresee huge profits with the company. Their sole aim is to earn profits by investing the capital in potential markets like technology, energy, software, telecommunication, digital marketing, etc.

    However, raising seed capital from a VC is quite a challenging job as they usually make the entrepreneurs go through quite a tough phase before bringing out the much-needed capital. However, they are justified in doing this as the amount of capital they invest is, any day, much higher than what any other investor would invest. So they just want to ensure that there is least risk associated with the startup they are investing in and they money they invest will come back as a larger profit.

Conclusion

How to raise capital in India is a question that is currently bothering millions of startups across India and Asia. It is all about identifying the right funding option for your startup and once you find it, you can smoothly raise seed stage capital in India.

Another way to get faster access to venture capital is to become a part of an intelligent network like Merger Alpha that offers a common platform to buyers, sellers, financial and strategic investors and advisors of the startup ecosystem in Southeast Asia. To become a part of this huge network or any information on how to raise capital in India, feel free to visit Merger Alpha http://mergeralpha.com/.

Good Luck!