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How to fund your startup in Bangladesh?

My advice for first time founders who want to raise funding is almost always to put that thought aside until you have good traction. Instead, focus completely on traction. Focus on product/market fit. When you have good traction, it becomes much easier to raise funding. ~Joel, Co-founder, Buffer

I want to start but I don’t know how to fund my business-this is most common complaint in startup scene of Bangladesh. We don’t yet have a structured funding culture in our eco-system-there are no formal angel investor networks (well, lots of informal angels are in play), no venture capital firm, no seed funding firm and only a couple of pilot accelerators. On the other hand the bank interest rate is too high to be commercially viable.

Similarly there are a few very interesting funding options in Bangladesh as well like EEF, SME foundation etc. To make things better a few venture capital firms have already started working and there are more to come in the coming days.

With time, as the startup idea is becoming more popular, new initiatives will come to play and improve things for startups.

What is startup funding?

Startup funding is simple: you take money from others to grow your business and share your pie in exchange. It’s somewhat opposite to bootstrapping. When you bootstrap your startup you invest your savings instead of taking external investment. But when we are talking about startup funding, we are talking about external funding that includes your family and friends, angels, venture capitals, incubators/accelerators, banks and more.

Why you need to understand it?

Why do startups take funding: to grow fast among many other reasons. In Bangladesh we don’t have a funding culture yet. But we need one as soon as possible. There are a few lights on the horizon and we want to facilitate to make it happen. With funding lots of things come in. Founders not only need to understand the mechanics of funding but also the pros and cons of every option and responsibilities and risks that come along with it.

May for ‘Startup Funding’:

This month our theme at FS is ‘Startup Funding: Myth and Facts’. We’ll explore multiple areas of funding, not only technical issues but plain pros and cons of every option one can have while the funding question comes in.

We’ll talk to industry experts, angels, venture capital firms, entrepreneurs, bankers to get deep insight on the subject. You can write to us as well. We welcome articles, opinion, questions and suggestions on startup funding from any perspective to decode startup funding in Bangladesh.

Thanks to Samantha Morshed for editing this piece.

Flickr Image by visualpanic

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3 comments on “How to fund your startup in Bangladesh?”

  1. The lack of funding for startups and for social enterprises was a key theme of work that was done in 2012, as part of the Business Innovation Facility. A report was published on the Practitioner Hub on Inclusive Business, based on in-depth research with financing institutions. 'The Landscape of SME Finance in Bangladesh' by Barclay O'Brien is available at http://bit.ly/1nizUFW.

    There are also several short checklists on the Practitioner Hub, including one on how to be 'investor-ready'. http://businessinnovationfacility.org/page/publications-checklists

    1. Hi Caroline this is great, I tried to download 'are you investment ready checklist' but could not. There might be some problem with the link. BTW, would you be interested to contribute a piece on SME funding in Bangladesh?

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