5 things to keep in mind while raising entrepreneurial finance!


Whether you are in India or anywhere on the globe, raising entrepreneurial finance is quite a challenge since you have to make individuals or institutions believe in your idea, project, business and vision.


Here are 5 things to keep in mind while raising entrepreneurial finance.

Tap your trade creditors

One of the costs in any entrepreneurial finance is the cost of inputs which can be in the form of services, supplies, raw materials or even finished products. These costs can represent a large portion of the initial finance.

Have you thought of negotiating good credit terms with your trade creditors? Traders are generally happy to give even start-ups credit in lieu of repeat business. So tap your trade creditors and ask for longer credit periods to cut down your entrepreneurial finance requirements.

Prepare a fool proof funding proposal

It doesn’t matter whether you are looking to raise entrepreneurial finance from your bank, financial institution, private investor or a Venture Capitalist, you will need a strong funding proposal.

Your funding proposal outlines the details of your business plan, the vital numbers and forecasts of performance and financial viability. Remember folks, your financiers are looking to invest in a solid business plan so don’t leave any stone unturned when you draft your funding proposal. If you are unable to answer any queries during your presentation to your prospective financiers, you can kiss your dream of raising entrepreneurial finance goodbye.

Be careful of the terms with an Angel Investor

In the day and age of technology, Angel Investors have gained popularity as rich sources of raising entrepreneurial finance. However, what you, as an entrepreneur need to be careful about are the terms of credit with an Angel Investor because this line of credit comes in the form of debt or equity. Debt is costly in the short term, while equity will reduce your share of revenue in the future. Depending on your forecasts and needs, make sure that you manage these terms prior to signing your life away.

Have a clean credit history

Your credit history is going to play a big role when you are looking to raise entrepreneurial finance, especially from the banking sector. So if you’ve been defaulting on your credit card or loan repayments, chances of you being able to raise entrepreneurial finance from your bank are slim. There are many ways to better your credit history and your past dealings with the bank and we suggest you start putting them into practice if you are looking to raise entrepreneurial finance in the near future.

Look for personal collaterals

Before you read on, be warned that using personal collateral is usually every entrepreneur’s last resort when it comes to raising entrepreneurial finance. If you have exhausted all possible sources for capital required to get your start-up business off the ground but still fall short by a tiny bit, personal collaterals might be your saviour. Although using personal collaterals are not your best option, it is always handy to keep the paperwork of your assets up to date, should the need arise to use them as collateral security for your entrepreneurial finance.

If you are you ready with a fabulous business idea and with the know-how to implement it, bank on your business plan and keep the above tips in mind on your journey to raise entrepreneurial finance.

  1. Robin says

    A new business needs to decide which type of organization will give their company the best liability and tax break. There are a few different ways to raise funds for startup, the traditional path is debt financing, which involves taking on a bank loan or private loan.

  2. Amit Kumar says

    very helpful

  3. James Greg says

    Great points raised here. Having a clean history would be the best thing so investors would have more faith funding in your prospects. A tricky person would not be able to gain much from an investor and end up getting a muddy reputation in the market losing his chances of trade.

  4. Shachin Bharadwaj says

    "If you are unable to answer any queries during your presentation to your prospective financiers, you can kiss your dream of raising entrepreneurial finance goodbye." – Not true buddy…you need to know what you are doing & if that makes sense and you are showing good growth… you will have the cheque.

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