Raising Funds- Gateway to Reap Profits

Money multiplies money” is a belief we may have come across. As a start-up business the seed money which is the initial capital money if self-invested from one’s own pocket gives liberty to function but does not give wings to reach the heights, there comes the necessity to raise funds for the business. Fundraising can be painstaking for a small business where they have no historicity. Injecting money into an already ongoing business need not be a matter of concern but to generate revenue at a state of evolution may depend on various factors. Why should I Invest in this? Needs to be answered, hence there are few guidelines on proposing financial institutions and fundraisers for capital investment in your business.

Nature of Business:

One of the major reasons for investment depends on the Realistic and Practicality of the business. Entrepreneurs often tend to be too optimistic about the future and potential success, end up being unrealistic. Financial institutions clearly scan the sustainability of the business and then process further.

More the capital, better the chance of survival:

The debt-equity ratio of any business should not exceed 2:1, which made vary from industry to industry. It takes a good level of waiting to achieve the breakeven first and then to reap profits. The business should also get breathing space between capital utilized and the final output. Hence the financial planning comes as the crux of the business. Also to manage the interest loans and other capital investment payback has to be taken care of.

Initial Public Offer” a route plan for generating capital proves to be proven business strategy. Once the business is operational with initial seed capital either owed or from an investor providing returns and a sustainable growth in the forecast, to raise further capital to achieve the forecasted growth and generate value for the promoter for taking the start-up risk and risk of initial capital contribution, IPO can be one of the best options.

It becomes the responsibility of the promoter and the management of the company to generate value for the shareholders of the company. Dividend payout is considered as one of the topmost value generating proposition for any company. A regular and timely dividend to the shareholders is perceived as one of the key factors to lure new investors in the company and generate further value.

Mutual Funds Basics

We struggle in lives and work only to lead a better life tomorrow. So, our today’s are all made for our tomorrow’s and we take necessary steps in determining them. We work, save a little, spend as much as our commitments and finally crib about not being able to meet the expectations set at the beginning.

So, how do we change the life course? How can we become better financially and stay independent? Well, investments are the path that we take to create a better tomorrow. The investments are made so that they help us lead a better life when we are no longer in a position to earn.

Life and investments:

There are many investment instruments that one can rely upon. They range from stock investments, bank deposits, insurance policies that cover life and also retirement, fixed deposits in different organizations, investing on companies via mutual funds, or any other mode, bonds and debts to others, and lastly just letting the money park in your savings account.

Now, when you are looking to seek growth to your money, each of them falls in a different order. Not all of them render the same returns as we expect, there are many factors determining the returns. Investing in markets is anytime the best vehicle to park your money for a longer growth period, where you will get returns, given that you have chosen the right path after a good research.

So, which vehicle is good and safe to park your money? Sometimes we get money in a lump sum, other times what is remaining with us is the small portion, so we need a solution to distribute them equally or even use the same path to achieve the end result! Exactly that is what a Mutual Fund investment does!!

Read more about Mutual funds:

Mutual funds are professionally managed investment tools that invest your money in other companies’ stocks, bonds, short-term funds, in the form of shares. Unlike investing in stocks, investment in mutual funds has many more people like you, so it’s a pool of investors that share the units available to the number of people in the pool.

Types of funds:

There different types of funds based on the maturity period of the scheme, based on the objective of the investment like to grow the corpus or looking for easy liquid funds and so on. Apart from this, there are also special funds that only concentrate on saving your taxes.