Why Startup Fundraising is a Big Challenge in India?

“Starting a new company or entering a new market is a giant leap, both emotionally and financially”

This leap can discourage entrepreneurs with great ideas.

In My experience Setting up a few Startup and part of Co-founder, CTO, i have learned more about Fundraising structure in India.

Available Fundraising Method

Debt-based crowdfunding

In simple terms, debt-based crowdfunding is the practice of raising funds from individuals, in return for interest.

Equity-based crowdfunding ( Not Allowed in India )

Equity crowdfunding (also known as crowd-investing or investment crowdfunding) is a method of raising capital used by Startup and early-stage companies. Essentially, equity crowdfunding offers the company’s securities to a number of potential investors in exchange for financing. Each investor is entitled to a stake in the company proportional to their investment.

In India, the rules regarding crowdfunding are moderated by the market regulator SEBI(Securities and Exchange Board of India). In the initial stages of India, there were no set regulations, but later on, SEBI has set up certain guidelines for people to follow.

Equity-based crowdfunding is termed illegal in India.

Donation-based crowdfunding

Donation-based crowdfunding is the most preferred mode of fundraising, especially in India. A person first creates the campaign and spreads awareness about his cause using social media and other forms of marketing. The person who is supporting this cause is called a donor. Any donor who relates to the cause is welcome to donate towards the campaign. There is no minimum or maximum amount for donations. A donor is free to contribute as much as he/she likes.

Reward-based crowdfunding

In reward-based crowdfunding, the donors who believe and donate to the cause are given a small reward in exchange for their contribution towards the cause or Product/Service

The Above Said method Logicly work in India but in reality, you require more efforts to reach your expectation. indin Crowdfunding platform does not reach that extent wherein western countries.

Venture capital

VC, refers to the financing of a startup company by typically high-wealth investors who think the business has the potential to grow substantially in the long run. Typically, VCs only invest in startup companies up to a certain percentage.

The problem in approaching VC

The Venture Capital organization or Individual Wants to know the potential outcome of your Idea and Return. But you need to Explain your Idea End to End. But if u think my idea is very unique and minting money, no matter time if i explain my Idea there will be the chance where an idea could get 'stolen',

Yes maybe Who having more money they need only Spark of an idea it gets fired

International Crowdfunding platform

Where you can Use Indigogo, Kickstarter, Croudcube like international funding platform where ever you live?

Incorporate your organization.

Register your Startup or Organisation the above mention countries will allow you to participate in the International international fundraising campaign to get your money in your international bank account then it can be used in India to achieve your startup goals. need more clarification to mail us at incrop@pixceltree.in