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Five funding fundamentals for Indian millennials

Five funding fundamentals for Indian millennials

Tuesday August 30, 2016 , 4 min Read

Almost 65 percent of the Indian population are millennials, (young people aged between 20-35). This huge segment is full of aspirations and energy, very dynamic and ready to take on the world. A report by Business Today says that there are more than 50 million small businesses in India (more than double that of the US). This figure indicates the entrepreneurial spirit in India. The Indian millennials are an important segment of small and medium enterprises (SMEs) in India.


However, financing their businesses remains painful for most. Many young entrepreneurs are ignorant about access to credit and business fundamentals that affect their business plans and funding potential directly.

If you are a young business, check out these five funding tips.

Don’t be a ‘me-too’ business

Many young businesses make the mistake of piggybacking or copying an existing business idea. As soon as a big brand launches a product, scores of smaller businesses follow suite. One can see similar launches in the market. However, hardly do such ‘me-too’ businesses survive long enough to make an impact. In this time and age, where innovation is the key to success, merely copying an existing idea will hardly do any good to your venture. No innovation, no growth - no funding.

Don’t burn before you earn

As a young entrepreneur, you probably want to have the best of everything for your business, be it a great office, liberal expense policies or anything else. However, it’s not always prudent to do so as you might soon run out of working capital. It is critical to monitor and manage your cash flows and spend, so that your business stays afloat. The thumb rule is to save before you spend! Be frugal and direct your raw cash power to expedite growth. Burning high, earning low - no funding

Stay compliant

One needs to be aware of the legal or statutory compliances required to operate one’s business. No one really wants a business relationship with non-conforming ventures – neither your funders, nor your customers. To get approved for funding from banks and NBFCs, one needs to ensure that all the licences, documents and data are in order. Lenders look for relevant compliances before they approve business loans. Stay compliant, get funded.

Don’t chase, let them follow

An entrepreneur has a lot to take care of. Funding, product development, marketing, etc., to name a few. However, it is important to maintain a balance and stay focussed on the core business activities. Develop and promote your product strategically, and investments will follow. Business lenders want to fund new businesses that depict promising numbers. Believe in your business plan, and work towards executing it. A good execution goes a long way to prove to investors/ creditors that the business is ready for external capital. Keep building, but not for funding. It will follow.

Plan for at least 18 months

When starting a new business venture, plan for at least 18 months of self-funding. The initial years of your business might not see much revenue. At the same time, there will be tremendous financial requirements that you will have to meet at all costs. A simple rule of thumb is to cut one’s revenue projections by half and double the expenses to see if one can still survive for first 18 months.

Indian millennials are now more willing to experiment and take calculated risks. New policy initiatives such as ‘Skill India Mission’ or ‘Digital India’ are leading to a better business environment in India. On the startup front, World Bank places India at the third position globally.

Funding wise there are various options to choose from - bootstrapping, friends and family, angel investors, bank loans, venture capital, crowdfunding, among others.

A growing trend in the recent years is to seek business funding online. As a millennial, one would prefer online lending platforms for its ease of use, speed, transparency and flexibility.

Digital lending platforms are supporting the needs of small businesses in a big way. Follow these five tips to get the funding you need to make a successful business.


(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)