Startup funding

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IPO stands for Initial Public Offering. An IPO is away or a process of raise capital for the company's growth and expansion by offering shares of a the privately governed body or corporation to the public/individual in the form of new stock issuance. This Public share helps the company to raise capital from public investors. This is one of the new way or source of financing which helps in the business expansion with the help of the public investors. Once IPO is done then the company has now become the publicly owned company rather than privately owned company.
 

Idea lights up,creates logo and and put a name,here begins your startup ventures.Your company will need a legal structure and government will ask a lot from you.Now288 you need to rent a server, may be hire one or two,but we need more money.So298 you go looking for investors.The first might come from friends, family or crowd sourcing,anyway you have the seed money.

now suppose someone whom you know invested 50k on your idea.You312 and your friend with whom you started the venture decide to issue a 100k shares and split 40k among each other and give the rest 20k to your seed investor.So299 the total valuation of your company stands at 250k because he gave 50k for the 20k shares.

now the business expands and you need a room with more employees,you need more money.You298 go for the series A investment.You298 go asking for fund from angel investors and venture capitalists,terms which you might already know.You291 propose your idea and explains your business model.They interview you and finds you competent,they decides to invest.Now290 they value your company.There is pre-money valuation and post-money valuation. Pre money valuation is where you currently put your company.Post334 money valuation is the value of the company after the series A investment.The post money valuation is the one usually referred in negotiations.The series A investment divided by the post-money valuation is the investors share in startup(imagine your company had 100 million pre valuation and VCs invested 25 million to it,your post value became 125 million.Now339 the... (More)

Here is the typical process of raising a funding round for a Startup which translates to the below steps:-

I’ll skip step one and two from the picture assuming you’re through both these steps and investor has shown interest to hear you pitch.

1. Pitching to Investors:
   Whether you’re pitching your business casually to an individual investor or formally to institutional investors, angel networks or VCs, this is usually where you get started.
   You reach this stage when they show interest to hear your pitch after looking at your credentials and/or pitch deck (screening).
   Less than 5% of our monthly applicants qualify to pitch to our angel investors.
2. Termsheet Signoff:
   Based on several factors like investment instrument (equity, debt or a mix of both), stage of your business and structure of the investor (individual or institutional), you get a TermSheet (TS) from them.
   The termsheet enlists all the terms of investment you mutually negotiate and agree upon.
   The termsheets are usually non-binding and have an expiry date of 60 to 90 days at max to close the transaction and move to SHA (see step 4).
3. Due diligence:
   Upon executing the TS, you’re moved to financial and legal due diligence (DD) by the investor.
   The rigorousness of DD is based on the age and stage of your startup (idea, PoC, post revenue or growth stage), type of investor (seed stage, angel, VC or PE).
   This might typically take 4 to 8 weeks including workplace verification.
   Important: Some investors do their due diligence... (More)

There a few options when it comes to startup funding:

1) Bootstrapping your startup business: This basically means that the founders themselves, invest without any help from outside. This is also called self-funding. Most of the times, startups have a hard time getting investments without showing any success or traction, this is the way to go for it.

2) Crowdfunding As A Funding Option: Crowdfunding is one of the newer ways of funding a startup that has been gaining lot of popularity lately. It’s like taking a loan, pre-order, contribution or investments from more than one person at the same time. This is how crowdfunding works – An entrepreneur will put up a detailed description of his business on a crowdfunding platform. He will mention the goals of his business, plans for making a profit, how much funding he needs and for what reasons, etc. and then consumers can read about the business and give money if they like the idea. Those giving money will make online pledges with the promise of pre-buying the product or giving a donation. Anyone can contribute money toward helping a business that they really believe in.The best thing about crowd funding is that it can also generate interest and hence helps in marketing the product alongside financing.

3) Get Angel Investment In Your Startup: Angel investors are individuals with surplus cash and a keen interest to invest in upcoming startups. They also work in groups of networks to collectively screen the proposals before... (More)