WHAT ARE START-UP?
As the very term suggests, start up are new companies that are in their initial stages of operation. They are founded by entrepreneurs who believe they have a product or service that would have a lot of demand. However, they generally have very small revenues and high cost as they are in their initial stages.Therefore they cannot sustain themselves without funds from external sources.
However, start up find extremely difficult to fund. studies indicate that more than 90% fail due to lack of funds. investors do not invest unless there is reasonable promise that the start up will succeed. A number of factors are involved in determining if a start-up is likely to succeed, the most important being the nature of the product and services, the capabilities of the founder and the timing. A product that is way ahead of its time, for example, may not make money in the near future. Needless to say, money is extremely important for business to become and remain profitable.
In spite of all the odds, several start-up have emerged in the last decade. people are also quitting regular jobs to build start-up,although it is extremely risky.
WHY ARE PEOPLE ENTERING THE START-UP COMMUNITY?
Some of the reasons are:
- The desire to do something path-breaking or useful to the society
- To get more respect in the business community
- To have full control
- To Make money
- For a sense of satisfaction from achieving something phenomenal
- for future opportunity, as building a successful start -up paves the way to high paying job offers and even a chance to a board membership in big companies.
FUNDING
As the number of start-up have kept multiplying so have the funding options. those who invest in stat-up do so on account of the need to be part of an innovation, to actively participate in the development of a product or service and to reap good return on their investments.
Ways of funding a start-up
Self funding: A start-up can resort to funding at any time.However, to begin the business, the founders either need to invest their own savings or borrow from friends and family. This is because unless a tangible is up and running, no external party will be willling to part with their money, either in the form of an investment or as a loan.
Crowdfunding: This funding options has gained a lot of popularity in the past few years. it is mean of encouraging a creative person by providing money in form of an investment or a loan. The entrepreneur presents a case on the nature of his/her business, plan for growth and reasons why one must in the venture. people who believe in the prospects of the business then invest in it and may or may not share a percentage pf profits.
Angel Investors: These are individual investors with surplus cash and keen eye for investing in good businesses. some of them even have networks that collectively screen start-up and decide on the best ones to invest in. In addition to Venture capital companies: These are professionally run fund companies that are in the business of investing in start-up. they provide funds and act as mentors, guiding start-up to success.
winning competitions: some start-up win competitions that fund them.
Bank Loans and Loans from non banking finance corporations: like any business, start-up also have the option to raise bank loans. the other option is to raise loans from other financial institutions
Government funded programmes: several government funded programmes helped fund certain start-up.
DID YOU KNOW?
Globally, India occupies the third position with over 4,200 start-up providing 80,000 jobs in the technology space.
The total number of investors grew by 2.3 times in 2015; 80% of the investors were foreign based.
SUCCESSFUL START-UP IN INDIA

