How to Get Seed Funding to Start New Online Business this FY 2021-2022?

Scope for FY 2021-2022

The new year is full of opportunities and this year promises major transformations in our lifestyle. The credit goes to technology trends that have changed due to 5G technology and the door step services that took over the world in the pandemic.

These influences have obviously changed the way of business dealings. So if you are planning to start a new online business going for on demand solutions or IoT apps is a good to go.

The following stats may help you get a better idea about the trending industries for the year.

• Pharma companies are in boom as 60-80% population is more concerned about health and want to get vaccinations and prescriptions this year- businessworld.in
• The finance sector has witnessed sharp rebound which gives scope of improvement and growth in the industry.- moneycontrol.com
• Industries that include lifestyle and luxury will be in the upper wave of the economic cycle.- thebalance.com
• 25-30% of people still are working from home which increase scope of CRM and online meeting platforms- lovemoney.com

I hope these stats could be quite insightful for you to know which sectors are booming. For more clarity, we will take up the trends and apps and explain them more in the blog below. For now, let us focus on what is seed funding and how to get seed funding for your startup.

What is Seed Funding?

According to definition of Investopedia,

The term seed capital refers to the type of financing used in the formation of a startup.

Yes, the definition explains itself. The funding or the main capital in the form of cash, assets or shares you get from the investor or through the loans or other financial setups to start your business. 

It is known as seed funding because it is the initial capital on the basis of which you can start your business. Thus if I have to say metaphorically, the  SEED funding helps your business to grow in a tree. It is the starting amount or the essential amount which you ask for to start all your business related operations.

Therefore when you want to start new business online, you need to get seed funding that covers-

• Your app Development Cost
• Salaries of Taskforce
• Management Compensation
• Resources

Don’t worry if you are new to this concept. We will be further talking about how to get seed funding and what preparations you have to do before pitching your idea.

Approach on How to Get Seed Funding?

Investing is not a child’s play. The investor thinks of 6 dimensions and aspects before investing. So if you want to get seed funding, it is very important that you do your homework and show confidence in your approach.

You can take tips from the following mentioned pointers.

1. Develop Plan

What is the app that you want to build? Why you need investment and what costs will be covered under the seed funding. You have to make a list of it.

You need to have a well-verified plan that is strong with facts and figures. This gives confidence to the investors.

2. Write Summary

Once the planning is done, try to make a summary of what are your positive points. Where you can face criticisms. How you have to tackle criticisms. What should be the central focus? You can also repeat this exercise after the pitch meeting is done as it helps you to analyze the outcome if you are on hold or wait.

3. Stay Focused

When you are going to sell eggs don’t talk about fish. As it may divert the investors. Meaning, the product or idea for which you have approached investors. Try to talk about that only. Keep things crisp and to the point. 

4. Make it Conversational

The meeting you walk in  should always be an informational discussion rather than one way communication. Involve the audience around you by asking questions or opening up to answering questions. This keeps the charm alive and investors stay focused on what you say.

5. Be prepared for Counter Questions

Before you go out for pitching, make a list of possible questions that could be asked by the investors. Even the silliest ones. Make a list and try to answer them. So that in case the investor asks something, you have a well-researched solution to it. This increases the confidence of the investor.

6. Have timeline

When you are pitching your business idea, you have to walk investors through your idea, vision, plan of action and the finances. So be sure when you are presenting your idea. You have to decide how much time you need to invest in each aspect while explaining to investors. 

7. Be ready with Stats

The figures make things more authentic. If you are pitching your idea you have to be backed up with the data, trends, figures and results that you can show to investors to add weight to your vision. This shows that you are good with the vision and investors believe your accountability.

8. Dress Code

Your clothes make the first impression. So try to dress professionally. Be hygienic, have your hair and nails roomed. Try to wear polished shoes and ironed clothes. Even if having a virtual meeting, try to have a  plain background at the back. Makes you look more professional.

Smart Ways on How to Get Seed Funding

I hope we are clear with the approach, now let us talk about the ways you can get your seed funding to start new business online.

1. Bootstrapping

Bootstrapping also known as self funding is the way of investment where you use your own funds and assets to first start the business. You can use your savings or pool in your friends and family to contribute to your business.

2. Crowdfunding

This is one of the trending ways of taking the investment. In this the person can seek investment from more than one investors. The user can put his requirement of the amount with his plan, vision, goals and projected profits on crowdfunding platforms. Some of the platforms are- Kiva, GoFundMe, Funding Circle, Kickstarter and Crowdrise.

3. Angel Investment

If you are just looking to get seed funding on the initial phases of  your business, then angel investment is the right option for you. In this, the investors invests for the starting and then back out by getting their share of interests or convertible equity.

4. Venture Capital

If you are able to show your long term growth and vision to the investors, then venture capital is the right way of getting seed funding for your business. The good investors invest in your business in the form of equity as they can see the good growth scopes.

5. Business Incubators and Accelerators

The Business incubators are the stimulators for your actual run of the business. In this, the company offers the startups the seed funding in the form of office and management training, providing workspace and tools necessary to start your new business online.

6. Contests

Yes, the things like Shark Tank exist and they are actually very helpful for you to get the investment and aso be in the spotlight. You can participate in the contests where the investors are there, even some business quiz that guarantees cash price or some investment.

7. Bank Loans

Yes, the ultimate and very secure option of payment. Many banks today promote entrepreneurial loans or business loans. You can mortgage your assets and then raise funds to start a new business online. You can later pay the amount in installments, inclusive of interest.

8. Microfinance Providers

It could be banks or investors that find the potential in the low-income group of people or the small business that have potential to grow. It is a nonconventional way of getting bank loans.

9. Government Subsidies/Programs

Today governments are very supportive of the new businesses emerging. You can also start your business under government business schemes and programs. They provide subsidies, good tax save and lots of other benefits.

10. Short Cuts Finances

Shortcut finances refers to the immediate and temporary solutions to your finance requirements. It could be means of call money, money lending, barter system etc. These finance techniques are only recommended when you have good connections, are authentic and you trust in person.

Mobile App Trends that Will Rule 2021-2022

Now after we have talked about ways of financing and how to get seed funding, let us talk about the domains you can explore to start a new business online. In order to sell more and have better target reach you need to be in trend. Let’s check what trends you can follow to make on demand app.

• Blockchain

In times to come, everything will be online. So the recording of the databases that include the events, happenings, transactions etc should be online too. Blockchain technology refers to the way of storing data that is used to show transactions. This technology is very popular in cash exchange apps like wallet and cryptocurrencies.

• IoTs

The world is now running on gadgets and the internet. The things that need the internet to function have become necessities of our life. So if you plan to start a new business online that includes the participation of wearable gadgets or day to day use of internet devices. There are high scopes of growth and profit.

• Augmented+Virtual Reality

The other reality of the world today is augmented reality and virtual reality. Be it gaming, educational or training programs. AR and VR are the very popular wants of the public today. So you can integrate these elements in your app.

• AI & Chatbots

The 24×7 availability and productivity is the priority of every business person. If you want to get good seed funding, you have to make sure that the buyers or clients for your app are always entertained. And for this, you can make chatbot apps or provide chatbot and AI services.

• M-commerce

The Covid19 taught us one thing- that we can work online and so is our business. Online marketplaces are the trendiest thing. Everyone wants to shift their business online. So if you are planning to start new business online, you can also think about Mcommerce apps.

• 3D Gaming

Gaming is now a serious business. It has become a respectable profession too. So in order to shine amongst existing top list games like PokemonGo or PubG, you need to make an app that gives real life experience. So 3D gaming is also one domain to explore.

New Online Business Apps to Consider

Let us check some of the apps that you can make considering the trends that we have mentioned above. Let us check out each of them one by one.

1. Gaming Apps

The gaming apps are now recreational activities that happen on screen. From young to adults, there is a massive craze for gamings. So when asking for seed funding, you can pitch an idea for developing a gaming app that includes AR, VR and 3D gaming. 

2. Marketplace Apps

The world now has shifted to digital screens. People prefer to sell things online as it increases the audience globally and the people get better reach. If you think you do not have enough resources to set shop online you can also serve as courier deliveries services to these shops and provide delivery services.

3. Consultation Apps

The world today is busy and people rely on other people to get advice and consultation. If you make online consultation app like TalkSpace or Calm, they are popular because people can seek consultation from experts to change their lifestyle. Apart from that beauty and astrological apps are also getting hit in the consultation category.

4. Telehealth Apps

Fitness is the new mantra of the modern world but at the same time people like to save their time as well. So if they are provided the app that provides them fitness and that too on demand, it has a strong base of getting popular. Apps like Fitness my Pal are examples of it.

5. Vehicle Pooling Apps

People are getting conscious of the environment. Car-sharing apps or pooling are the smart choices of people. Also along with that taxi booking apps are also in big demand. So thinking of making taxi app, car sharing app or even bike sharing app is the good option to  consider.

6. On Demand Service Apps

The trendiest app from the past decade with promise to be in trend from decades to come. Everything being in digital space, customers prefer to order things and services online and get them at the comfort of doorstep. So having an on demand app that comes to your service with one tap could stand very dim chances of failure.

7. CRM Apps

Since everything is now online, people are working from home, the management needs to be streamlined. There are big players like ZOHO, Salesforce, Hubspot, etc that may not be affordable to everyone. You can make your own CRM app to sell other parties or create one to streamline your business operations.

8. Delivery Apps

As told above, the online marketplace, on demand apps etc the market has high hold. To deliver these products delivery apps are needed. They are complementary to the former. So, if you are planning to make an app that delivers for third parties like Lalamove, a courier app or food delivery app for your restaurant. Then you have strong chances to survive for long in the market.

9. Content Streaming App

The world is now consuming lots of content per second. There is a big audience for that. You can make content streaming apps like instagram, TikTok or Netflix in your language or for your region. This will attract your native audience and can make you a strong player in the market. 

Conclusion

The seed funding is a key to your success and growth. I don’t say that if you don’t get seed funding your business can not boom. But the seed funding catalysts to use more resources and with more power and resources, the chances of better productivity increases. I hope this blog helps you get seed funding and start new business online. And if you are confused about which app to make that is trendy yet suits our budget you got from funds, the good app consultant should always be considered.