Financing Options Available For Start-ups One of the biggest challenge the founder of start up faces is in raising finance for the Capital. Your own funds,besides funds from family and friends get used up very quickly. The traditional indian bank is very conservative and may ask the founder of a newly set up start that ” we need last three years balance sheet “. most start ups ar also on an asset light model and do not have any collateral to give to the Bankers. And most of us know that “Banks only lend money to costumers who do not need the money ” . So what is the solution to this problem. Capital for the business can be raised with a combination of Debt and Equity. Understanding basic finance and legal terms for the founder of any start up is very important. A. Equity Financing Startups are usually equity financed/funded by way of angel investors and/or venture capital/ private equity investors. Venture Capitalist/Private EquityVenture capital (“VC”) / Private Equity (“PE”) is often the first large investment a startup.