The best medium of funding a start – up!

  Ateet Sanghavi   Jan 19, 2014   Uncategorized   0 Comment


It is “an idea that takes to change your life” and that idea could get you somewhere high up there with the most successful business men and in a position that is quite close to the circle of the top notch stature. However, this idea can be easily formulated into a business plan that you need to work on for setting up your own venture in a smooth manner. Let’s count the processes: Starting from converting your plan into realistic business plans in terms of product / service, customer base, clientele, resources and so on.

Everything said and done, sounds like quite a cake walk. You know what your product is, you know whose going to buy it, you know where to source it from, and you sure know your logistics and other legal implications involved. You also know the co-ordination and other important aspects involved. Now, the only interrogation that interferes! Where is the finance? It is ultimately the money that drives the whole vehicle of a successful business plan. It is the first and the most primary aspect that you need to consider and be sure of before kick starting a venture.

The financial power – It’s all about YOU!

Well it is as simple as a “Ready-Steady-Go!!” when it comes to your heavy pockets and full-to-the-brim bank accounts. If you have enough from your family virtues or you have earned each penny to invest in your venture one day, it is the ultimate and the best source of finance for your upcoming venture then. It is always better to have yourself as the base and the foundation of your own organization when it comes to the finances! Be your own creditor and increase your own role in the company that is again going to serve YOU!

This not only brings about a personal satisfaction and a free mind to work with, but also makes sure that each and every penny that you or your ancestors have earned with sheer blood and sweat induced in it, should be thoroughly justified. It is thus extremely important to be sure of what’s going where and how each monetary resource is being utilized, whether it is being utilized to the fullest of the capacity or no, can it be better treated and like.

When you are self sufficient, there is another indispensable element that is nullified – “The Big Bad Loan Burden” Imagine working on grounds, whereby you don’t owe money to any one! It’s all about the freedom and the availability of the resources that lies with you. Working with a free mind is something that anyone and everyone would wish to do. Thus, if we look at it, most of the start ups are funded from the personal monetary and financial resources rather than filing and applying for the other institutional and non institutional monetary resources in large quantum.

The first option is to always accomplish your goals with the resources that are pre existing because your creditors sure have a better memory than your debtors and you may have to take that slight burden of the “payback” when it comes to being accountable to anybody apart from your own self. Legal implications, deadlines, working with time caps, increased risks of clearing off dues and like could be the bottlenecks that could rise up when it comes to taking loans from banks and other institutions. But does that mean that if you are not “self loaded” that you can’t set up your idea into an independent venture? Definitely not! Everything has its pros and cons and options are what make life easy today!

Equity investment – The ruler of the markets today!

Equity brings in ownership and if you need the capital for putting up your own venture, then why not share the ownership with the people who can help you out on the capital front? In most usual scenarios, one would sell off the shares of the company to the interested investors, for capital funding of the start up. Thus, the shareholders become the part owners in your venture, but the cherry on the cake is that you have your source of capital ready and you also are the major owner of the Company as you do not sell more than 49% of your shares. Hitting two goals with the same shot? Now we are talking!!

After you have pooled the bit from your end – selling the shares of the company (Retaining 51 %) – equity investment, your personal savings and like, it is then time to make a fair and healthy concoction of funding resources. This could mean that you could whole and sole do up your entire venture from the heavy pockets that you have, or you could make up a mixture of equity and debt funding. It is always a better call to have a fusion of both the sides rather than sticking only on personal money or only on loans thereby nullifying the cons of either of the ends.

Introducing: The debt funding story!

What’s your next approach: The bank! Of course, the bank becomes your temple and the creditor your new god! What’s next? There is more accountability and responsibility as you have been entrusted with money from an external source and thus you might have to keep more of a track on what’s going where and why it’s going there! The bank credit does serve as a blessing for all those who are extremely passionate about running their ideas in real business world. Thus, bank loans are another very pivotal option for funding start ups. It could serve as a beneficial medium in terms of increased cautiousness.

Various long term and short term loans are available from varied financial institutions which can sure help fund your venture. Making sure everything is going into the right place and thus fast pacing your business to grow and prosper becomes primary as you are now not only funding, but are also being funded!

Government grants may or may not be possible when it comes to funding your business and thus sticking to the mixture of your personal finance, equity and debt funding shall always serve as the most feasible and viable option for funding your business.

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