The trend of setting startups has been grasping India from the past some time and interestingly the real estate sector has not remained untouched from the same. This idea of being a businessman or entrepreneur has given birth to various organizations in the market but survival is not an easy thing here. So, if you also plan to try destiny in the property market then know these funding tips for real estate startups.
The technology has offered new dimensions to the Indian real estate sector and thus the aspiring entrepreneurs must encash the same. You are suggested to forget the traditional method of raising funds for business where one was required to draw a business plan that had to be presented to the banks, financial lenders, business head of multiple companies and more to gather funds.
However, the Crowdfunding methodology lets you to float a business plan online and those interested in the same concept can make online donations from minimum to maximum amount and from somewhere to anywhere across the globe. The process of collecting funds via the Crowdfunding process brings in various financers at multiple stages and this may include your friends, family members and more.
In short, this is also the first step towards digital marketing of the business.
2. Angel Investment
Nature of the real estate sector is unpredictable and nobody knows what’s in store for tomorrow. Thus, you need to have strong financial backing and this can be earned through Angel investment. This is the second and important funding concept for real estate startups as you can bet on affluent individuals who in return wish to have a share in the cake.
An angel investor is the one who is ready to offer hefty funding to your real estate business in exchange of equity ownership or convertible debt in the same. This is one of the best ideas to safeguard property business in India as one requires money to complete/sell projects in well in time.
3. Venture Capital Funding
The initial investment in the business is known as Venture capital and this funding tip is ideal only when the business has ample growth opportunities. Under this concept, the capitalist contributes via equity or equity-related instruments and walks out of the business by selling his/her shares when the company is performing at par and earning profit.
The capitalist here has the advantage to use his/her mentorship and expertise. The Kalaari Capital, Nexus Venture, and Helion Ventures are some of the top venture capital firms in India.
4. Raise Funds via Bank Loan
This is the age-old method to raise fundings and thus going this way forward is not a bad idea. The young entrepreneurs can submit a startup business proposal to these financial lenders to get the loan sanctioned.
5. Expert Speak
The industry experts suggest that the best idea to raise funding for a real estate startup is to approach family offices, corporates, and High Networth Individuals (HNI). These people take a huge interest in such investments as they can cash the liquidity through the same.
Doing property business is not a child’s play and thus you must thoroughly research, plan and examine all the pros and cons of this industry before stepping in the market as a small mistake can make you pay a big cost.