Can you open a startup with zero investment? 7+ tasks that can get you 100% funding
You can start a startup even without money! Funding is available for every work; here are 9 ways, check now
Startup culture is growing rapidly in India. Currently, India's startup ecosystem ranks third in the world. Raising funding is a prevalent practice within this culture. When it comes to business, people often wonder how to operate without money. Startup funding proves invaluable for such individuals. Here are 9 reasons why a startup may need to raise funding. After reviewing these, you will understand that securing money to start a business is possible with a great business idea.
To Make the Prototype
The first step for any startup is to create a prototype of its product. A prototype is a sample made before producing the product in large quantities, allowing for necessary changes without altering the entire product. For example, car or bike manufacturers first make a prototype and test it. Small businesses sometimes need funding to develop prototypes as well.
For Product Development
Once the prototype is successful, it's time for product development, which requires substantial funds. Many startups meet this financial need through funding, offering some equity of the business to investors in return.
To Hire a Team
A company's team significantly contributes to its growth. A good team can propel a business rapidly. However, hiring skilled individuals can be expensive. Some startups raise funding to expand their team and bring in top talent.
For Working Capital
Businesses require two types of capital: fixed and working. Fixed capital includes assets like land, buildings, and machines. Working capital covers expenses necessary for product creation, such as raw materials, salaries, electricity bills, packaging, and marketing.
For Legal and Consulting Services
Sometimes a startup needs legal or consulting services. Spending too much on these services at the start can hinder product development. Hence, some startups raise funding to cover these essential services.
For Raw Materials and Equipment
Raw materials are crucial for product creation, and the equipment used is equally important. When money is tight but demand is high, some startups raise funding to secure necessary raw materials and equipment.
For Licenses and Certificates
Certain businesses, like those in the pharma sector, require licenses or certificates, including trials. Obtaining these can be costly. To avoid depleting working capital, some startups raise funds specifically for these licenses and certificates.
For Marketing and Sales
Rapid business growth necessitates marketing and sales, which are expensive. Typically, businesses spend 30 to 50 percent on marketing, particularly in the initial stages. When funds are short, startups often seek funding to support their marketing and sales efforts.
For Office Space and Admin Expenses
Every business needs an office and must cover associated admin expenses. To manage these costs, some startups raise funding for office space and administrative needs.