Startup Investor Platform to Raise Funds in India

Globally, there are ~4000 startups looking for funding every year and only one-fourth of these are able to receive the funding they require, which then goes on to limit the growth of their businesses. The underlying motivation to become an entrepreneur is to capitalise on innovation to pull off things that haven’t been done before, which stems from their experimental and free nature. You need an idea, a team, and good planning to get started. Bootstrapping is a good idea but it does not come with a guaranteed high growth and upscaling and that is why the entrepreneurs should opt in to get funding for their startup.

According to a recent study, over 90% of new businesses fail in the first two year of operations due to lack of operational funds resulting in either ramping up of business or close to no growth. This is why entrepreneurs often struggle with finding the right investors for startups. In a nutshell, ~3000 ambitious plans don’t take shape every single year because of funding issues.

Startup funding in India

Indian startups have raised approximately $20 Bn in the first half of 2022 despite shutdowns and layoffs. There are several sources of startup investment in India such as Bootstrapping, VC’s and Angel Investors, Debt financing, Incubators and accelerators, bank loans, Revenue based financing, etc.

Growing rapidly from the past two years, Revenue based financing has become a new preferred funding source for startups in which they share a certain source of future revenue with their investors until original amount funds are repaid.

Also, when it comes to angel investors - Kunal Shah, Naveen Tewari, Ratan Tata and Binny Bansal are few of the renowned Indian investors for startups.

How to evaluate and choose the right capital structure for your business?

Debt, equity, and retained earnings are the three basic ways that business owners can raise. The ideal choice will rely on the particular business and financial challenges the business is now facing as well as unique financing requirements. In order to fully weigh your options and make the best decision, this frequently calls for a high level of financial acumen.

Three-fourths of these newborn startups (precisely 1,37,000 per day) in need of funding have for years relied on business loans, credit cards and lines of credit. Airbnbs and Ubers of the world go for debt financing in billions in order to become successful sooner rather than later. There are founders who have proof of concept but no funds to finance the inventory, build their core product etc. In a case like this, founders should raise funds but NOT at the cost of massive equity dilution that’ll lead to many sleepless, stressful nights in the future.

Unless you find a dream VC who you WANT and don’t NEED, you should stay as far away from diluting your equity as possible. We even have a checklist (written by a VC-loved founder himself) for the kind of good investors you must look out for when fundraising.

The good news for Indian startups is that funding went up by 3X in 2021. The bad news, however, is that only 1-2% of venture-funded companies become billion-dollar businesses like Shopify and Spotify. The rest 98% depending upon VC funding (often need-based and not want-based) for the rest of their lifetimes. By the end of it, the founders and first employees who gave the business their sweat and blood are left with minuscule amounts of equity in the business.

Startup Investor Platform

In the recent two years several online platforms have risen up enabling founders to get quick access to financing for their business needs. Klub stands on the top of these platforms providing fast, founder friendly, and flexible funding upto Rs 30 Crs, so you keep what’s yours without any equity dilution or personal guarantees.

Klub acts as a bridge between investors and startups looking for financing. Klub is unique in the sense that it allows the repayment to be done in a flexible manner i.e. no fixed EMI’s. You pay more or less in proportion to the revenue that you are generating.

Multiple rounds of capital can be raised with the Klub as your company grows and the need for financing emerges for various business needs. Considering ~67% of startups that do end up raising funds have recurring revenues, all of these founders have a choice (if they don’t want to dilute equity) - to bootstrap OR go for alternate financing. Here’s exactly where platforms like Klub come in. We give you the growth capital you need in return for a tiny share of your revenue and NOT equity. How are we able to do this smoothly, transparently, effectively and efficiently? We have our patrons and tech team to thank for that - who invest with us in YOU with no expectation of equity in your company.

It’s simple - you win, we earn, you lose, we earn later. But through all this, you’re the 100% owner of what you’ve built. Your business needs the money today? Don’t wait to make that pitch, just apply for funding and get your money within 48 hours.