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The startup ecosystem has been booming for the past few years. The same is visible from the fact that approximately so many companies have become unicorns. There is no perfect time in to work on a start-up. If you are planning about working on your start-up and are wondering about funding, you should not be worried about it. Thankfully, there are many ways to pick up funds for your start-up. Before knowing how you can pick funds for your company, it is important to know there are three types of funding possible in a startup: equity funding, debt funding and government grants. With the growing importance of startups, the options of getting a fund have also increased. Here are five ways to fund your startup. 

1. Angel Investors 

Angel investors are basically individual investors or a group of individuals who invest in a fund. Most of the time, these individuals are experienced entrepreneurs themselves who understand the pain and opportunities that come with working in a start-up. The angel investors have a surplus amount of funds with them which they are willing to put in a start-up if they think that they can give them a substantial return. For picking investment from angel investors, you need to ensure that you pass their screening and research examination. Once the angel investors are convinced that your start-up has the potential to profit them, you are in good hands. It needs to be noted that the investment made by angel investors are small amount. Angel investors generally look for a bigger return for the small investments that they make. 

2. Venture Capital Funds 

Venture Capital Funds refer to an institution that is capable of providing a good amount of capital to any startup that they find promising. The amount from venture capital funds is usually large enough that is required for the growth and expansion of the company. Most of the time, the investors of venture capital funds look forward to sustainable development. Mostly, venture capital funds look for equity in the start-up in return for their investment. Once they make their exit either because of IPO or acquisition, they collect their return on the investment. 

3. Corporate Venture Capital

Corporate Venture Capital is a branch of Venture Capital where very big multinationals come together for investing in corporate funds for promising startups. In addition to providing the funds, Corporate Venture Capital also provides help to the startups by guiding them with strategic direction and marketing expertise. Just like venture capital funds, even the investors of corporate venture capital exchange their investment with equity. Corporate VC looks for a track record or for exceptional products and services such as GBWhatsApp, ShareChat, MX TakaTak, EasyShare which has exponential growth opportunities that can be achieved through the funding.

4. Venture Debt Funds 

Sometimes, the owners of start-ups do not want to dissolve their equity. It is because equity is important for any start-up and in such scenarios, venture debt funds come into play. With venture debt funds, you can get the required funding for your company. When exchanging equity or getting bank loans is not an option, then you can go for venture debt funds. Venture debt funds can be extremely helpful in expanding the company without dissolving any equity. 

5. Government grants and funds 

Not only the private players come into action when it comes to funding a start-up. The Government in pretty much every countries is very supportive of the start-up ecosystem. Government startup programs mostly offers grants to start-ups which can be extremely helpful. The government grants can also come in the form of reduced patent costs and income tax exemption. 

Other ways of picking funds for your start-up in include angel networks and platforms, micro venture capital and accelerators and incubators. In addition to that, you can always seek funds from your family and friends too and also, family offices and banks. Crowdfunding, even though a less popular funding option is definitely an option for the founders who are seeking funds for their start-ups.

 

Kossi Adzo is the editor and author of Startup.info. He is software engineer. Innovation, Businesses and companies are his passion. He filled several patents in IT & Communication technologies. He manages the technical operations at Startup.info.

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