Why is venture funding important?
Any NBFC startup which is registered under RBI to serve its business objective needs fundraising. NBFC is always one of the most popular sectors for the investor as if you manage NBFC by use of technology and big data the risk in business reduce to 5%. Whenever a venture capitalist starts funding for a startup at SEED stage or startup stage or later stage, the financing plan depends on the current market scenario and business growth expected by the founders.
In the modern NBFC business, funding and fundraising act as the major resource which supports the growth of a startup. To achieve the goal of a startup, it is important to ensure the right allocation of fund to each business segment. Fundraising agenda needs to be carried by founder on a regular basis. There is no end of fundraising process for a startup.
Why Every startup raises institution funding?
- Meeting the financial objective of a startup.
- Remove glitches from the path of success.
- Removing all the financial blockages from the path of success of startups.
- Matching the business standards and high level of competition.
RBI has opened NBFC sector for 100% FDI Subject to minimum capitalization norms, as follows for fund base activities.
- USD 500,000 for foreign capital up to 51%.
- USD 5,000,000 for foreign capital more than 51% and up to 75%.
- USD 50,000,000 for foreign capital more than 75%.
100% foreign funding is allowed without any restriction in all type of NBFC if the object of an NBFC is non-fund
- Investment advisory services.
- Financial consultancy.
- For-ex broking.
- Money changing business.
- Credit rating agencies.
Assets finance company and venture capitalist comes under fund base activities.