Most people should be aware by now that Nagaland state will get into a deep trouble if the current trend of over-dependence on government jobs continues. With employment in the public sector already saturated, as repeatedly stated by government officials, the most feasible way to avoiding a possible economic crisis in the state is entrepreneurship. That is the reason the central and state governments are emphasising, and encouraging start-ups and providing support system to entrepreneurs. The need to leverage private enterprises has deepened of late with the country experiencing an economic slowdown.
To create a culture of entrepreneurship, promote innovation among the youths and transform job seekers to job creators and a sustainable economy, the government of Nagaland has framed a start-up policy. It aims to help set up at least 500 start-ups in the next five years with special focus on local products and services. Eligible start-ups can avail several benefits and concessions including 25% of start-up funds for women entrepreneurs. Such assistance builds a favourable climate for business people and investors as well. But, how about the section of the population who wants to start private enterprises but could not avail government schemes? How can they get capital to convert their plans into reality?
Capital doesn’t come easy these days. Investors are choosy and only few can avail bank loans. In such a bad business-funding environment and scenario, the rise in crowdfunding industry came as a welcome disruption, enabling those in need of funds to access capital. It can also help solve capital crunch issues in the state. This concept has been there for years in many countries and has helped many small enterprises and entrepreneurs flourish but it is something new to this part of the world or at least not practised. This method of raising money for funding projects will be feasible in our region, as it does not require people to contribute in large amounts of funds but in small amounts from large numbers of people. Crowdfunding can be done in different ways: Reward-based, where contributors are rewarded if projects do well; donation-based, where a large number of people donate to a venture; and peer-to-peer lending where borrowers access funds from outside traditional banking. Soft loan (without interest) from relatives and friends is another alternative for new projects. Entrepreneurs can avail funds through networks like CoFoundersLab but they can also drive funding through social networking by making the details of their projects available to prospective contributors. This alternative way of funding ventures has many advantages like free access to capital sans risk besides solving the issue of dependence on investors, capitalists, and banks.
However, raising funds for start-up via crowdfunding platforms is not as easy as it appears. Entrepreneurs need to present practical, promising and interesting projects to convince total strangers to contribute in small amounts of funds for free. It may take a lot of effort to make such fundraising drives happen. However, if successful it can turn out to be a blessing not only for beneficiaries but for the society too.