How to Fund Your Startup?

You have a great idea to start up a business, have figured out how to get the resources, but when it comes to getting funds, you are stuck. You are not sure where to get the funds for your startup. Here is a guide on how to raise funds for your startup.
Bootstrapping

Bootstrapping means funding your startup with your money. If you have sufficient money, you can invest it in your startup. You have to weigh your spending options; try to get more returns with minimum investment--regardless of where you get the money from.

The advantage of bootstrapping is that you own it, are not answerable to anyone, and have full control. But the disadvantage in majority of the cases is that it might not be enough.

Love Money

Love money refers to raising money from family and friends, a very common method. The advantage is that money can be raised easily, and you can gain experience on how to pitch in a friendly environment. But, the main disadvantage is that it might end up ruining you relations.

Angel financing

With more and more venture, getting funds is becoming easier. Many of the venture capitalists are moving into funding startups in the earlier stages to get access to the freshest deals and the brightest, new entrepreneurs. Angel and seed financing comes into play before a business has launched its product, or shortly thereafter. It's the money you need to make it happen out of the gate. There are a few sources of angel financing:

Venture capitalists:
Involving venture capitalists would ensure higher amounts of funds and they are more accessible than other investors.
Strategic angels:
Someone having expertise in the industry or the domain would not only fund the startup, but also give expertise, contacts and legitimacy to the startup.
Non-strategic angels:
These include wealthy people looking out to invest their money and diversify their portfolio. The problem is that they don't usually so finding them can be tricky.

Series A Financing

Series A is usually done when a company has grown, shown some traction, and needs some more money to expand. The funds raised depend on how much money is needed, the valuation for the company, and how much the investors are ready to put in.

Series A usually comes from venture capitalists, so it brings in the strongest partner for the startup, with the most experience and highest pedigree. But in most cases, a Series A is used once the company has shown some traction and needs more money to expand. Series A financing typically comes from venture capitalists. And at this stage, you will want to bring in the strongest partner possible; the VC firm with the most experience in your space, the highest pedigree and the most success stories.