Eight Types of Early-Stage Startup Funding Options in India – POD
Starting and sustaining a business requires a lot of capital! It is the key contributor to building and expanding a startup, and that’s why entrepreneurs often ask - “how do I raise capital?”
Below are different types of early-stage startup funding options in India -
Messiah for early-stage startups! Angel investors are high net-worth individuals (HNI) who are constantly looking to back the next 'big-idea' at the earliest stage with their time, money, and expertise.
These high-risk taker investors work independently, which means they vet and screen the startup on their own before investing in a startup.
(In recent research conducted by Harvard Business School, startups backed by angel investors are more likely to remain in business longer, induce substantial growth, and reward a more significant return rate to their investors.)
A syndicate is an investment vehicle/group that allows individual investors to co-invest with a reputable investor (a leader) in the startups. Syndicate leaders are business angels who have been part of the industry for many years and possess experience identifying early-stage investment opportunities.
For example, AngelList is one such example of Angel Syndicate where a lead identifies and vet a startup to present to its syndicate. Who, in turn, studies and decides whether they want to invest in the startup collectively or not.
The introduction of an angel investment platform is a boon for an investor who wants to kickstart their angel investment journey with less money. Angel investment platform, such as POD, introduces promising early-stage startups to its network of accredited and non-accredited investors, where they can invest individually for a higher sum of equity.
Even though the investment in early-stage startups comes with high risk, POD follows a stringent vetting process and only introduces promising deals to their network of angel investors.
These are pooled investment funds of high net-worth investors who seek private equity stakes in startups. A Fund Manager manages this fund pool and decides on the startups to invest in.
It's a way for startups to raise money for their revolutionary idea. A startup can raise capital in exchange for equity, rewards, debt, or nothing at all.
If you’re keen to explore this option, here are the top crowdfunding sites in India for startups to raise funds.
These are organizations especially designed to launch and nurture early-stage startups by providing seed capital, mentorship, etc., in return for an equity stake in the company. In addition to that, they offer a wide range of support during their tenure with the company, including "accelerator" programs that accelerate growth by linking founders with experienced mentors and investors.
Here's the list of 10 Startup Incubation Centre in India.
Entrepreneurs usually knock on the door of a bank for the startup loan before exploring other funding opportunities. Getting the funding primarily when the business is in its early stage is a challenge. Still, if a startup can demonstrate the ability to repay, they can avail 'Startup Business Loan' from SIDBI (Small Industries Development Bank of India).
"There are more than 39,000 startups in India who have access to much private equity and debt funding options."
"It is an award of financial assistance in the form of money by the government to an eligible grantee with no expectation that the funds will be paid back."
Here's the extensive list of Government Grant Programs –
Check the eligibility criteria for the Government Grant available for Indian startups.
POD is owned by Crowdpouch Ventures Services Private Limited and reserves all rights to the assets, content, services, information, and products and graphics in the website but third party content. Crowdpouch does not solicit, advertise, market any of the users registered with POD, neither does it solicit investors by offering leagues/schemes/competitions etc. related to securities markets. POD hereby clarifies that it does not carry any resemblance to the stock exchange nor does it facilitate trading of securities nor does it act like a broker/agent/media for raising funds. Investment through POD does not carry rights of renunciation. Investors are cautioned that POD operates in an unregulated space hence, investment through POD is subject to investment risk. Investments in startups are highly illiquid.