Got an Ides and business plan. Next What?

The entire idea materilisation stops at questions of funding. Today i will discuss the various investment options available for funding for an enterpreneur in India.

  1. Investment by friends, family etc. : The first person that comes to mind are friends and family. But someone rightly said choose friendship or money. If the return on investments are not proper or the investment made is not returned on time, you may lose friends or relationship become bitter.
  2. Angel investors or venture capitalists: This is the best form i believe, because the people investing in Ideas are professionals and understand the risks associated with investment. No friendship to lose here. But the problems with these kind of investments are:

    These funds will control your decisions.
    Making profit will the main aim rather than developing your idea and what you love.
    You wont be taking the independent decisions.
    Incase your business goes down the fund flow may stop and these funds may require you to sell your holdings to them or sell the business itself.
  3. Crowed Funding: Not allowed in India. The bigger version of crowed funding is Initial Public offer which is allowed. But crowed fundings are not yet allowed by regulatories in India. Private Limited companies can not accept the random deposits and this fixes the bars on type of investments available.
    However i came across a smart idea, the firm 1800exchange provides an unique type of investment option. It can be called a verison of crowed funding but with minor changes. Here the public does not give loans to business but invest for equity shares.
  4. Savings: Most of the enterpreneurs use the money they saved to start the business. This is the most commonly used investment option. But best motivator since you will losing your own money. But risk with this kind of startup capital is that it takes longer time to save enough to start the business.

Do you know of any other investment option available in India?

Posted 6 years, 6 months ago by Stock Guru

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