Author: lapaasindia

Did you ever think? Why is BSE listing important for a company? Why companies list themselves in the Bombay Stock Exchange? In this blog, we will know three things that you should know about the Bombay Stock Exchange listing before listing your company to Bombay stock exchange.

What’s in it for me?

Bombay Stock Exchange or BSE is an Indian stock exchange at Dalal Street in Mumbai, India. It was established in 1985.

Mr. Premchand Roychand was a founding member of the Bombay stock exchange. The Bombay stock exchange is Asia’s oldest stock exchange and 10th largest stock exchange body globally.

What is BSE listing?

The Bombay stock exchange is a securities market Index. Generally, companies list themselves in BSE to generate funds for their business and grow their company.

When a company plans to issue Initial Public Offering (IPO), they list themself in the Bombay stock exchange. Now you must be thinking, what is IPO?

The Initial Public Offering (IPO) is a process where a company offers its share to the institutional investors, retail investors, public. The company issue shares to the public and provides them ownership of the company.

Therefore through the Initial Public offering, the company lists its name in the stock market. BSE listing companies allow the market to trade with their shares.

Why list on BSE?

To run a business, a company needs capital. In the earlier stage, a company raises funds by approaching friends, family, or relatives.

Then in the next stage, when a business has started, and the company requires more funds to operate in the marketing, angel investors help them run the company.

Angel investors are the businesses and entrepreneurs which improve and help companies in their business. However, these investors take some equity of the company.

Finally, the company is established and looking for more growth.

This is the situation where BSE listing enters. By listing the company in the Bombay stock exchange, a company will start to grow more. A company is now eligible to raise funds by issuing shares.

By initial public offering (IPO), a company allots shares to the public after it is ready to list in the BSE and NSE.

BSE listing helps a company to raise capital. The leveraging ratios get more attractive, and the capacity to raise debt increases.

Other than this, when a company lists in Bombay stock exchange, it enhances the visibility and credibility of the company. A company gets a broader capital base and an increase in working capital.

Moreover, a company can raise funds at low rates and comparatively on relaxed norms by BSE listing.

How to list on BSE?

The Bombay stock exchange has various criteria for different companies in the market.

Let’s start with startups

BSE Startup platform provides a friendly environment to the entrepreneurs and Investors. This platform helps them to list their company in the stock exchange and open for the way of finance for further growth and development.

Bombay stock exchange has a platform called “BSE SME” for small media enterprises and startups. BSE Startup is for new companies that are registered under the Startup India Standup India scheme.

Through the BSE SME platform, startups can avail INR 25 lakhs to INR 1 crore as initial investment by BSE listing.

Terms to list company in BSE SME

• A company should have issued the capital of INR 3 crore minimum after listing in the Bombay stock exchange.
• It should have at least three years of experience with tangible worth INR 3 crore.
• In the case of a new company other than startups, INR 5 is the minimum issued capital for SMEs for BSE listing.
• For high tech startups, no minimum capital, no past records are required for registration and listing process.
• A company should be registered as a limited liability company (public limited) under the committee of the ministry of government.

Listing Criteria for company

• The company should have a website with all the details of the company.
• The minimum application and lot size should not be less than INR 1 lakh.
• 50% of independent directors on the board should agree.
• The company should have a full-time company secretary.
• No ending petition is admitted in court.
• No regulatory cases were pending of the company or its directors.
• The company should not be a part of the Board of Industrial and Financial Reconstruction (BIFR). However, if the company has come out of it, then, in that case, it is eligible for BSE listing.

Migration from BSE SME to the Main Board 

When a company settles in the platform, it can migrate to the leading board platforms to compete with giant companies.

Here are some parameters a company should follow to migrate from the BSE SME platform to the Mainboard platform after BSE listing.

• The company should be listed and traded in the BSE SME platform for at least two years.
• At this stage, the company should have a paid-up capital of minimum INR 10 crore or more and market capitalization of INR 25 crore or more.
• Shareholder approval to be sought by special resolution and other eligibility criteria of the main board should be fulfilled.

In the case of underwriting:- 100% underwritten by the underwriter. Under section 106P(2) of Issue of Capital and Disclosure Requirements (ICDR) regulations, at least 15% of the issued size be underwritten by the merchant banker in his account.

Generally, the Marchant banker is the broker who acts as a link between the company and the investors. A Marchant banker knows the necessity of business. He helps to fulfill the financial needs of the company.

Therefore he has the authority to underwrite corporate securities and advice on issues like Merger.

In the case of market-making:- At least 5 market-making people are required three years of market-making. It is mandatory to have the liquidity of shares in the company and a minimum one year from the date of registration.

Let’s discuss

How much will it cost to list a company in BSE?

The capital includes Equity shares, preference shares, fully as well as convertible debentures, Indian depository receipts, etc. In the case of debenture capital listed before 1 April 2017, the fee will be 75% of the below fees.

In the case of Equity segment

• The initial listing fee is INR 20000. After that, if the listed capital is more up to INR 100 crores than INR 2.5 lakhs annually for commonly listed companies and INR 3 lakh for exclusively listed companies.
• Listed capital of a company of INR 100 crores but up to INR 200 crores than INR 3 lakh annually for commonly listed companies and INR 3.25 lakh for exclusively listed companies.
• From the listed capital of INR 200 crores to INR 300 crores, the annual listing fees will be INR 3.75 lakhs.
• Above INR 300 crores but not more than INR 400 crores, the annual listing fees will be INR 4.50 lakhs.
• From INR 400 crores to INR 500 crores, then INR 6 lakhs will be the annual listing fee.

If the listed capital exceeds INR 500 crores to INR 1000 crores, the annual listing fee will be Rs. 6.05 lakhs with additional listing fees of Rs. 3530 for every increase of Rs. 5 crores.

For the listing capital of Rs. 1000 to 2000 Crores than the annual listing fee is 9.90 lakhs with additional fees of Rs—3930 on every increase of Rs. 5 Crores.

In the case where the listed capital exceeds Rs. 2000 to Rs 3000 Crores than the annual listing fee is Rs 10 lakhs + Rs 4270 additional on the increase of every five crores.

Above Rs, 3000 crores listing capital Rs10.20 lakhs is the annual listing fee with addition to Rs 3910 on every increase of Rs 5 Crores.

All the fees are applicable for the full year.

In the case of Private debt securities 

The initial listing fee of privately placed debt securities is the same as the equity segment. Rs 20000.

The listing processing fee is applicable only for private companies, which is Rs. 4500 per ISIN and with issued size up to Rs 5 crore is Rs. 2500 per ISIN.

If the issued size is more than Rs 5 crore but up to 10 crores, the annual listing fee is Rs 3750 per ISIN.

If the issue size lies between Rs. 10 Crores to 20 Crores than in that case, Rs 7500 per ISIN.

However, if the issue size is above Rs 20 crores than an additional fee of Rs. 200 for every increase of 1 crore.

In the case of the SME segment

The annual fee is INR 25000 or 0.01% of full market capitalization. Whichever is higher.

In the case of the Mutual Fund segment

In the case of the mutual fund segment, the initial listing fee is nil. The annual listing fee for the tenure of scheme payable every month or part thereof. With the processing fee of Rs. 10000.

• In the case where issued size is up to Rs. 50 crore than Rs 1000 per month.
• In the case where issued size is up to Rs. 100 crore than Rs 1300 per month.
• If the issued size is above Rs.100 crore up to Rs. 300 crore than Rs 2800 per month.
• If the issued size is up to Rs. 500 crore than Rs 5300 per month.
• Between Rs. 500 to Rs 1000 crore than Rs. 9300 per month
• and above Rs. 1000, the annual listing fee will be 14800 per month.

Conclusion

Finally, in this blog, we discuss various topics from What is BSE listing to How much will it cost to list a company in BSE. BSE listing is a great platform to raise funds. The best thing about BSE is that it has funding and trading platform for every business.

A new company can also list them in BSE and avail the benefits of it. So, in my view, you have to list your business on the BSE platform. It will increase the authenticity and build goodwill in the market. It also helps you to raise funds according to your need.

FAQs

Are you about to start a Business? So, Or are you looking to mentor your startup? If yes, then you are in the right article. Hence, In this blog, we will tell you about the business accelerator and Incubator and what you should choose for your startup.

What’s in it for me

Are you planning to do business? Also, Are you about to start your own company? According to Money Control, 90% of Indian startups fail in the first five years source

So, Running a startup is not an easy task. It requires knowledge, funding, investments, experience, and many more things.

Therefore this is where accelerators and incubators come to help these startup businesses. Let’s check out what these accelerators and incubators are and how these programs work.

What is a business accelerator?

Business Accelerators work for companies and startups to grow their business and guide them for a short period. Usually, they provide services for 3 to 4 months. Meanwhile, The accelerator increases the size of the company.

Accelerators invest some money in the startups to grow them, and in return, they take some percentage of equity. Accelerators generally charge for their services.

Generally, accelerators work for startups to boost their company in the initial stage. They provide seed funding, guidance, and help them to convert their ideas into reality.

Accelerators focus on increasing the valuation of the startups. Accelerators focus on scaling up the businesses unless making them profitable.

Now we have an overview of what a business incubator is. Let’s know how it works.

How does business accelerator work?

As we have discussed above, a business accelerator helps to grow the startup in the initial stage. The accelerator programs are different from Venture capitals.

Accelerator programs mentor the startups and help them grow. They rarely profit investments and charge for their services, whereas venture capital is a funding mechanism that primarily aims at financial funding.

A business accelerator is funded and run by successful businesses and well-established corporates. Their main aim is to mentor startups.

They provide structural guidance and prepare them for the market and grow them to get their first round of funding. The duration of an accelerator program lies between 4 to 6 months, depending on the program you choose.

For all these services, accelerators charge a fee or some part of equity.

These are some examples of Business Accelerator.

• 500 Startups
• Techstars
• Venture Catalysts

Here are Indian based accelerators.

• Catalyzer
• Freemont Partners
• GSF Accelerator

However, this is not the case with an incubator. Let us know what an incubator is and how it works.

What is a Business Incubator?

Business incubators help businesses, entrepreneurs, and startups grow their companies until they get the first round of their funding. They work for long term periods depending upon the program. They usually don’t charge or take little to no equity of the company.

These programs usually funded by grants, universities, governments. The Incubator mentors the startups by providing guidance, workspace, networking, and many more services that help the startup grow.

Incubators do not provide any funding or investment, but they prepare the startups to get funding and settle in the market.

Now we have an overview of what a business incubator is. Let’s know how it works.

How does business Incubator works?

The concept starts in America and now booming in countries like India. A business incubator is a company that helps new and startup companies to develop by providing services such as management, networking, training, office space etc.

According to the National Business Incubation Association (NBIA), -A business incubator plays a significant role in national economic development.

A business incubator provides mentorship to avoid mistakes. They provide secure funding options and valuable networks and connections.

Incubator provides marketing assistance and several other business-related services. They have reliable contacts for funding and loans. Thus, they have access to angel investors and venture capital.

In incubator programs, the mentors ensure the overall growth of the startups and their members. For this, they improve their presentation skills. They provide links with strategic partners, higher education resources.

The Incubator will get some percentage of the company in return for their services and grow it to the first level of funding. Generally, incubators don’t charge for their service like an accelerator.

Therefore It is not a funding mechanism like the venture capital and angel investor. However, An angel investor is a successful entrepreneur or a business that invests in the startup and takes some equity in return.

Types of Business Incubators

There are different types of incubators in the market that help startups grow and stabilize enough to survive in the market.

To begin with

Academic institutions

Academic institutions like universities run their incubator programs to promote startup culture among students. These institutions generally provide seminars, working space, and guidance to grow startups.

Non-profit development corporation

There are non-profit corporations that provide incubator programs for free. Generally, these corporations are by the government and Non- profit organizations to encourage startup culture.

These corporations provide guidance, workspace, networking, management, and many more things which we have discussed before.

For-profit property development venture

Similarly- profit venture provides incubator services and charge some amount of fees or share in equity.

Venture capital firm

Venture capital firms generally provide funding to startups. However, their main motive is to increase the valuation of the startup. Therefore, they do not focus much on profit-making.

Combination of all above

Finally, there is one more category, which is a combination of all these companies that have all the qualities and services of all the incubators.

However, joining an incubator program is not an easy process as an accelerator. A startup has to pitch the Incubator to join their program.

Incubator programs have very tough competition for admission when compare to the accelerator model.

Some more drawbacks of the Incubator are that the scheme revolves around the mentors, and you have to take others’ opinions and inputs in your startups.

These are some examples of Business Incubator.

• Station F
• Binance Labs
• Demium Startups

Here are Indian based accelerators.

• Centre for Innovation Incubation & Entrepreneurship (CIIE)
• Amity Innovation Incubator
• Amity Innovation Incubator

Comparison between Accelerator vs. Incubator?

Purpose The main purpose of the business accelerator is to accelerate the business in the initial stage. While Incubator focuses on converting an idea into reality by providing them all the resources.

Duration A duration of an accelerator program lies between 4 to 6 months. In comparison, incubator programs lie between 6 months to 1 and a half years or more depending upon the project or program policy.

Availability, On the one hand, it is easy for startups to join the accelerator program. But on the other hand, it is difficult to join an incubator program because of high demand and high competition. 

Fees The accelerator generally charges for services. In some cases, they take some percentage of equity. Meanwhile, the incubators usually do not charge for their services. In some cases, they rarely charge little to no money. 

Funding Opportunity Accelerators have a more extensive network with VC, angel investors. Their primary focus is to increase the valuation and prepare for the first round of funding.

 Incubators do not focus on funding instead of that they focus on stability. Their main aim is to make the idea into something that attracts the investor.

Source of Funding These are for-profit corporations established by business and successful corporations. On the other hand, these are non- profit corporations. Universities and governments run these programs.

Conclusion

To conclude what we have discussed in this blog. Firstly we have discussed what an accelerator is and how it helps boost the startup in their starting phase.

Secondly, we have discussed what incubators are how they help startups from scratch. In addition to that, we have seen some of the examples and comparisons between the two.

However, both corporations help to support startups. They both promote startup culture. If you are looking for something that can help you grow your business in a short time, then a business accelerator is the right choice.

Meanwhile, they provide infrastructure, mentorship, seminars, and workshops, funding in exchange for equity in the company, Legal guidance, Networking opportunity, etc.

But on the other hand, if you are someone who needs infrastructure, networking, financial advisory/ intellectual property teams/ legal advisory, contacts for potential investors, manufacturing, initial financial support, training, and guidance, than Incubator will be a good option for you.

FAQs

Money is the most significant element that is required to run any business. Do you know how we can raise funds by BSE? Yes, I know by listing our business on BSE. But do you know how it is done? So, in this blog, we are going to explore how to raise funds by BSE.

What’s in it for me?

What is Fundraising?

Fundraising is a process of arranging funds for a business. Funds are an essential part of a business. They act as blood for business. It is challenging to run and grow a business without money. .

But knowing how to get funding, let’s get familiar with different levels of funding that a business raises during its entire life.

Firstly in the stage of Startup

In this case, the startups’ founder is looking for an initial fund to start their business. Therefore the owner raise fund from friends, family, and relatives by borrowing. It is difficult for a business to raise funds by BSE in the initial stage.

Secondly in the stage of early Startup

Usually, in this stage, when the business starts operating in the market it needs working capital to run the business properly. For this, they look for angel investors.

An Angel investor is successful businessmen or entrepreneur who invest in the business and fulfill the monetary needs. However, Angel investors take some percentage of equity in return. It is difficult for a business to raise funds by BSE in the early stage.

Growth stage of a startup

On the other hand, venture capital is a funding mechanism that invests in startups and helps them grow. They provide seed capital for business. Thus, venture capital increases the valuation of the Startup.

Venture capital generally seeks technology, biotech, software-based companies. However, Venture capital does not focus on profit-making. In the growth stage, venture capital can help the business to raise funds with BSE.

Their primary focus is to increase the size of the valuation. It works at high risk. Venture capital focuses on sales and market share so that they can raise more funds from the market.

Business loan by banks

Not everyone can approach and pitch the angel investor or venture capital. Another way to get funds for business is through bank loans. Banks provide business loans on interest rates of 11% to 16% annually.

Banks loans are much more comfortable than taking funds from investors.

Maturity stage of a startup

In the maturity stage, startups usually seek private equity investments. Unlike venture capital, private equity focuses on all types of businesses, whether manufacturing, retail, IT, or FMCG.

It demands stability in business. Private equity mainly focuses on profit-making. It brings growth capital for business. Private equity works at low risk. It gives stability and profit to a business.

Private equity generally comes at the stage of expansion. It gives comfort to repay investment money, Unlike bank loans. Private equity exits by issuing the IPO of the company in the market where a company can raise funds with BSE. 

Stage of expansion

After the growth stage and maturity stage when a company seeks expansion. The best way to do it is by IPO.

Initial Public Offering(IPO) is a process of offering shares of the company to investors. The company sold the shares to investors to raise funds for working capital, debt repayment, etc.

By IPO, entrepreneurs list their companies on the BSE to raise funds from the public.

Let’s understand what BSE is? What are the funding platforms? And how to raise funds in BSE.

Introduction to BSE

BSE (formerly Bombay Stock Exchange) established in 1875. It is Asia’s oldest and now the world’s fastest Stock Exchange. BSE is India’s leading exchange group and has played an essential role in developing the Indian capital market.

The BSE provides an efficient market for trading in equity, debt instruments, debentures, currency, interest rate, mutual funds, and stock trading.

BSE also has a successful platform for trading in equities of small and medium enterprises (SMEs). BSE also has a platform for fundraising.

It has a global reach with customers across the world and a nation-wide presence. BSE’s systems and processes are designed to protect market integrity.

Raise funds by BSE platform

To promote the startup culture, the Bombay Stock Exchange is Asia’s oldest exchange launched the ‘BSE Startups’ platform on December 22, 2018.

As part of the launch, the leading external currency market has signed an agreement with Cornerstone Ventures Investment Advisers LLP and Venture Catalysts Private Limited. This initiative will help startups to raise funds by BSE.

The collaboration with the two firms will help the BSE to incentivize the startups in the field of IT, Fintech, 3D printing, biotechnology, and life sciences, space technology, and e-commerce.

The platform will also help in listing startups of hi-tech defense, drones, genetic engineering, nanotechnology, artificial intelligence, big data, virtual reality, e-gaming, and robotics.

According to Ashishkumar Chauhan, MD & CEO, BSE, -, “BSE is the origin of capitalism in India. Bombay Stock Exchange helped India to create a wealth of more than USD 2 trillion.

In the future, hi-tech startups will require less capital but will be able to create Excessive wealth. Indian youth need to get involved in more startups and raise funds from other Indians using BSE Startups platform.

Hi-tech companies will come and raise funds from investors through this platform, helping immense wealth creation for startups, investors, and the country by creating jobs.

How to raise funds by BSE

Till now, we have learned what BSE is, and It’s funding platform. Let’s explore how to raise funds on the platform.

The BSE has a startup platform called BSE SME for startups and small, medium enterprises. This platform allows SMEs and startups to list their company in BSE.

In the last eight years, more than 311 companies have been listed in BSE. Out of which 66 companies have been migrated to the main board platform, They raise ten crores on an average.

BSE listing will help the companies to build the trust for funds. BSE promotes capitalism without capital. Investors from different places can invest in the company through the BSE platform.

Procedure for listing

A company with three years of market experience can list their company in the BSE. A company will have an issued capital of Rs 3 crores after listing in BSE.

The company raises funds by BSE on the basis of their equity. A new company that is registered in Startup India can raise a fund of Rs. 25 lakh to 1 crore.

Especially High tech companies can list their companies and raise funds with zero capital and no prior experience.

Firstly the company has to appoint a merchant banker who helps them in listing.

Then the merchant banker will arrange all the documents and formalities for the listing like material contracts, the financial documents, promoter details, government approvals, etc. and prepare documents for IPO, which include IPO structure, share issuance and other financial requirements. 

After the documentation process, the draft prospectus and DRHP are submitted to the stock exchange.

The BSE official will visit the company site and verify all the documents

For more detailed information about BSE listing, you can read our blog on BSE listing. After the post, site visit the promotor interview listing advisory committee

After a satisfactory interview and site visit, The BSE will issue an In-principal approval.

That the ROC approves the opening and closing date of the issue, the Marchant banker intimate the exchange about the opening dates of the issue along with the required documents. Source

At last, the Initial Public Offer (IPO) opens and closes according to schedule. The company submits the documents to the BSE SME for allotment. After the allotment, BSE issues a notice for listing and trading.

So this is how a company starts issue IPO and raise a fund using BSE.

Conclusion

We have seen in this blog that capital is required in every stage of business. In this blog we understand that what is fund raising and what are the stages of funding. Then we see how a business can raise funds with BSE and what are the procedure of doing it.

FAQs

Meanwhile, The best way to describe the investor relation is to think of the CEO of a publicly-traded corporation.

The CEO is the topmost person of the corporate pyramid and is entirely responsible for running the entire company to make it even more recognizable than before.

Let’s take an example of a company that everyone knows very well such as Apple, the current CEO of Apple is Tim Cook.

Tim Cook gets a report card, just like most students. But instead of getting grades on Maths, English, and receiving A or B grade.

He gets grades on the basis of his company’s performance, and then the grid is the stock price over time people feel at the CEO.

In this case, Tim Cook is really doing a very excellent job, and it also reflects Apple’s company’s performance. Hence, The stock is likely to go up for the CEO.

Hence, It means recognition and a lot of money, considering that many companies compensate their CEOs through their stock options.

In addition to their salary, the price of the stocks increases the value of all those options.

However, if investors have no faith in the CEO to increase the firm’s value, or they think that the CEO is taking the company towards the wrong direction.

As the stock prices decrease when this occurs in many cases, the CEO’s compensation will go far down.

And since it happens over a long period of time, the company can fire the CEO or ask him to resign.

How important the stock price is to the CEO?

So, Let’s look at how the stock prices move in different directions.

Stock prices move higher or lower due to the economics of supply and demand.

Meanwhile, I am assuming here that the supply of shares remains relatively consistent the whole year.

 So, If the demand increases or decreases, it will affect the price of the stock.

So, How does the CEO effectively and for their stock? 

This is when investor comes into play, though many small as well aS micro capital public companies may have a dual role.

CFO or investor relations manager or officer most mid-cap and more giant corporations have a dedicated investor relations team ranging from one individual so words of 10.

What’s in it

• What is an Investor Relation?
• Responsibility of IR Manager
• Where to Find Investor Relations Page or Tab
• Work of Investor Relations Department
• Qualifications for an Investor Relations Manager
• Conclusion
• FAQ

What is an Investor Relation?

Corporate management makes relations with its investors, so they protect the investors’ interest in their company.

Hence, In every public company, there is a separate department for working on this relation. We call it the Investor Relation (IR) department.

The IR department provides information as well as Financial records about the internal affairs of the company to the investor.

Based on this information, they decide whether they invest in their company or not.

Responsibility of IR Manager

The investor relations team in two major segment; the first significant responsibility for the Investor Relations team is to build demand for the stock.

One can accomplish this by proactively reaching out to investors, going to investor events or holding meetings with investors.

 The other responsibilities of the Investor Relations team are to keep close communication with current investors.

The investor relations team is responsible for keeping those investors up to date with everything that occurs with the company and how the company is doing financially by following the current investors well-informed.

 The investor relations team would hope to stem any potential selling and entice further buying of the stock from current owners or stockholders.

The Investor Relations team is an integral part of any publicly traded corporation and typically answers directly to the CEO or CFO.

 It is not usual for the Investor Relations team to be in very close communication with the CEO and CFO and even travel together to meet it.

Where to Find Investor Relation Page or Tab

 Go to any public company’s official website you will find a tab or page named as investor’s relation.

Open the page or click on the tab you will get to know the company’s financial records balance sheets and statements.

Major public companies provide the information regarding the company’s internal affairs like the company’s growth and performance in this year or this quarter, financial data, accounting records, financial statements, balance sheet, profit and loss account, and reporting all compliances.

They provide such data to educate investors, so they can invest in the company.

Work of Investor Relations Department

The investr relation department has to communicate regularly with the accounting, legal, and executive management departments to take information about the company’s internal affairs and be aware of the investor timely.

The investor relations department informs them the company is fairly trading on the stock exchange and the future of companies is bright.

Hence, The investor relies on this information and invests in the company on the basis of this available information.

The investor relations department also communicates with all financial groups like investors, shareholders, and government organizations.

Investor protection act 2002 governs all activities of investor relationship manager or investor relation department, and this act has all the provisions regarding investor relation.

Qualifications for an Investor Relations Manager

Generally, a Bachelor’s degree in Finance, Accounting, Communications, Economics, or relevant fields is required for investor relations manager. A Master’s degree (like M.B.A.) is unnecessary, but it is considered an asset.

Or a work experience of 2 to 7 years in such a position.

He should know the investor protection act 2002, financial, legal, and accounting compliance.

Conclusion

In every public company, an investor relations department must inform and educate the company’s financial and internal affairs to its investors.

Investors analyze this data and decide whether they should invest in the company or not.

FAQ

When business is small, then the proprietor makes all the expenses of his business. At some points, you need more funds and fundraising strategies to grow and expand your business.

By the end of this article, you will learn:

What is Fundraising Strategy?

A document which gives specific fundraising tasks and strategies, including who will be responsible for completing them and the time frame of when they need to be accomplished

6 Steps to Develop Fundraising Strategies 

1. Identify your assets

2. Develop a case statement

3. Set your goals

4. Create an action plan

5. Evaluate your strategy

We were going to go through six steps to create a fundraising strategy

1) Identify your Assets

When the first steps for us knowing your assets how do we identify your assets

How do we identify you know early on are there any weaknesses about your organization that we need to start paying attention to.

So we’re going to need to find a way to identify your assets, and you know probably speaking here we’re looking at your human resources and your current organizational strengths.

Examples of Assets

• Compelling mission
• Public support· Well-connected staff and board
• High traffic website
• Name recognition

SWOT Analysis

One technique to identify your assets is to use one of these classic strategic planning tools called a SWOT analysis.

SWOT means s stands for strengths W weaknesses O stands for opportunities, and T stands for the thread.

Part of your strategic planning process, doing a SWOT analysis or SWOT matrix at the very beginning, is an excellent way for you to brainstorm as a team.

So when we start to jot down your strengths and weaknesses, these are usually seen as internal driver’s opportunities and threats.

I’d like you to view them as external factors their technological changes happening in the world today that could be an opportunity or a threat to the way you work other social, cultural shifts happening in the world today that might be potential opportunities for your work or threats.

So the SWOT analysis visualizes a piece of paper, turns it into four corners, and labels those corners one corner upper left-hand side you might want to mark as strengths.

It is in the ultimate goal of doing a SWOT analysis is to identify your assets. This is part of a funding strategy process that would take, but you are also using it to figure out your advantages in this sector.

It’s good to know our advantages, but we also want to know where we are weak because we can always improve, so you want to jot down your strengths label another box weaknesses one box won’t be labeled opportunities and one table will be labeled threats.

this is yeah you might have to brainstorm as a team about this, but it shouldn’t take you that long to fill out a SWOT analysis and again our opportunities and threats are

Develop a case statement

2) Develop a Case Statement

It is a document usually viewed as an internal fundraising piece.

This is a memo that you write. It could be four to six pages in length.

Contents in case statement:

• Mission and values
• rograms and services
• Accomplishments
• Plans for future
• Budget needs

It sets forth in you know really clear, concise, and compelling writing. It sets forth all of the reasons why your organization deserves and merits financial support right now and way into the future to develop a useful, persuasive case statement.

 You’ll want to get a sense of who you want to be like ten years from now. You’ve got internal documents that address your mission and the values that your organization holds.

You definitely should have documents describing the programs and services that you are offering the public and their outcome.

3) Set your Goals

It’s time to set realistic annual fundraising goals I mean you know exactly how much money you have in your budget next year to run your organization, and you should know how much it costs to do everything you want to do in your organization.

Start small build your confidence and then your funding history of how much money you’ve raised from which source is going to show you where you should be moving next year.

so the best advice here to set a realistic fundraising goal is to start exactly where you are if you’re not the money person in your organization sit down with somebody who has a much better sense of where the money has been coming from for the last couple of years

So you have to know simply who your current funding partners are?

Who are the largest funding partners?

Where could you strengthen your funding base?

4) Create an Action Plan

This action plan tells me exactly how much money you’re going to raise next year from investors and how you’re going to do it your fundraising plan.

You’re going to set a revenue goal for each of these strategies.

 If you’re going to raise money from corporations and businesses, I’m going to see which months and how much you’re growing from local companies as well as which months and how much you expect to be getting a more substantial amount from a multinational company.

So when you’re doing your action plan when you’re crafting it, you have to create a chart or time table with some kind of description and the person responsible for that activity.

5) Evaluate Your Strategy

We go through the fundraising plans because it’s teamwork together everybody achieves more.

It builds consensus among your team. It helps you prioritize what your fundraising strategies should be in the first place. There is a tremendous amount of communication internally and externally happening with these fundraising plans. You’re going to evaluate it monthly.

At the end of the year, you have to evaluate because you have to decide what worked and what didn’t work. Did we raise more money from investors, and we thought we were going to how did we do it? Did we not secure as much corporate support as we thought?

 We were going to secure what worked, and you know your fundraising success builds, so we already know that we’re putting significant amounts of time into the pitch in the proposal writing process and the follow-up calls.

Some fundraising ways are given below:

1. Loans:

Loans are risky. They are not widely recommended and they luckily for many people harder to get than.

 It would seem because you can get a personal loan possibly if you have good credit, but most people who try to get a lot of investments to end up not having good credit because they spend the money and then they have to pay the thing back right, and then they ruin their credit history.

Most banks don’t loan to companies that have not started.

• Risky, if the business will not succeed you still have to pay back the money with interest
• Bank does not give loans to new companies.
• You can try Lendio.com,Microlending.com and crowd-lending.com for an online loan.

2. Crowdfunding

• Websites that provide loans to the new business.
• Laws are different in all countries.
• Competition is high.

3. Investors: 

The investors invest in the kind of business that you have; of course, after seed investors, there are angel investors.

There’s always a lot of overlap between angel investors and seed investors.

Generally, angel investors are a little bit later in the game. Of course, the top of the pyramid here is venture capital. They typically give large ventures around, so your business has to be pretty established and have pretty high growth.

• Incubators Like YCombinator, TechStars, ERAccelerator, and many others provide funding to the new businesses.
• Seed Investors
• AngelList.com and gust.com
• Angel investors
• VC (Venture capital)

4. Bootstrapping

Bootstrapping, which is not raising money but running your business more practically with a deep, slightly different business strategy, you aren’t going to need a lot of money.

You should have a good business strategy because it’s easier to make that tend to raise money.

 

Conclusion

I explained the ways of raising funds. Again, the six steps developing a fundraising plan identify your assets and look at what’s happening externally.

 That’s the opportunities and threats part of it. What do we need to know about our operating environment next year after next year to identify your assets? This will tell you what your competitive advantage is.

Develop a case statement set realistic fundraising goals for yourself realistic fundraising goals.

That’s the key to creating this action plan, creating a fundraising plan implemented, doing the work get your team involved, and evaluating your plan monthly.

You’re going to assess your project by the end of the year because you’re working on your fundraising plan.

FAQ