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What Do Start-up Business Owners Need to Know about Investment Deals?

What Do Start-up Business Owners Need to Know about Investment Deals?
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Start-up business owners have a lot of things to consider. They need to name the company, gear it to the target audience, and work out how to sell the ...

Start-up business owners have a lot of things to consider. They need to name the company, gear it to the target audience, and work out how to sell the product. These are all important things, but one of the most pertinent issues for young businesses is funding. Without proper investment, a lot of start-ups never get off the ground and become fully-fledged businesses. Indeed, a whopping 90 percent of start-ups fail. Just as a gambler wouldn't play a game of blackjack without knowing the card values, business owners shouldn't go into business without knowing how to get the right investment deals.

Starting a new business without the right knowledge is like walking around with a blindfold on. There is a chance you might be successful, but the more likely outcome is that you will trip and fall down a manhole. Luckily, the internet is awash with information to guide people in almost anything. For online gamers, there are detailed rules on how to play games like roulette before starting. There is even information about where you can play it for free or for real money. For people traveling to other countries, there are guides like Lonely Planet which provide details about where to stay and what to eat. The same is true for business owners looking for investment.

New business owners may have watched TV and seen business people gain investment for a portion of their company after a successful sales pitch. In reality, though, very few companies have the opportunity to go on hit TV series like Dragons' Den or Shark Tank and try to sell their ideas to wealthy investors. Instead, a lot of businesses choose to go to banks to get the initial funding for their ventures. The Small Industries Development Bank of India has begun to lend to start-ups directly and has a number of schemes to suit different people's needs. The company also gives guidance to young entrepreneurs about the best ways to get a business off the ground.

In order to be eligible for a start-up loan, business owners need to gather all the right documents to apply. These include passport photos, proof of identity, bank statements, and proof of income. Business owners should also be aware of the different types of loan available. Term loans are usually used for launching new projects and expanding businesses. These can be paid back over a long period of time, usually between 1 and 10 years. Working capital loans, on the other hand, are short term loans that need to be paid back within a year. These can be used for quick fixes within a business such as paying rent.

Aside from going through the banks and investment societies in India, another option for start-ups is to use a crowdfunding site. In India, the best sites at which to do this include Indiegogo, Wishberry, and Keto. Remember, when touting for investment, you need to sell your business and make investors believe it has strong potential for profit.

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