Finance for Innovative Business Ideas in India

How to get Finance for Innovative Business Ideas in India?

Many people who want to start their career as an Entrepreneur ask me this question. In fact, several people in India who do not start their own Business yet but have a great innovative Business idea has this question in mind.

How to Raise Capital for a Start-up Business is a Challenge & an Art. Here I will suggest you few great ways to raise finance for your innovative Business idea in India.

01) Family & Friends -

In developing countries like India, this is the age old method of raising money to start a business. You can simply borrow money from our friends, parents and other family members to start a Business. The main advantage of borrowing from family and friends is that, liberal borrowing terms and minimal to no interest rate at all. However, if you unable to pay this money back, you may spoil the relationship.

02) Credit Cards -

Credit Card is the next instant way to finance your Business. However, according to financial experts it is not the recommended way to raise finance for a new business. Because the annual interest rate of credit cards is anywhere between 35-50%. Which is a very costly form of Finance.

03) Banks & Financial Institutions -

You can borrow money from a Bank or Financial Institutes to start a new business. However, Banks don’t finance start-up businesses without any Guarantee. You will have to put your home, Shares Portfolio or any other Asset as a Guarantee to get this kind of finance.

04) Angel Investors -

Angel Investors don’t lend you money but they Invest their money in your Business for Equity Partnership. They pick up the Equity Stake in your Company and infuse the Fresh Capital in your Business. Here you don’t have to pay back any loan. However, to get this kind of Finance, you have to dilute your ownership in your own Business by selling it’s stake.

05) Venture Capitalists or Private Equity Players -

Venture Capitalists come last. Because they only finance the already started business. VCs don’t finance just the Business ideas on Paper. But they take position in already started businesses. ICICI Venture is one of the reputed VC in India.

Thus, all of the above are the great ways to Finance your Innovative Business Idea in India. So go for it and make your Fortune…!!!