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Why more and more startups are opting for crowdfunding platforms like Equity Crest & Grex

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Why more and more startups are opting for crowdfunding platforms like Equity Crest & Grex

Bengaluru, India | Red Newswire | Jan 14, 2016 Last Updated at 7:00 PM IST.

Some time back, CEO of Kleeto, Sunil Mahajan approached many venture capitalists to raise funds for the company. Many of them didn’t even listen to his whole idea.

Well, this is a major problem being faced by many startups today. Many of the startups have small fund requirements which raise an unusual fear in the investors. Mahajan says, “VC funds had no appetite to invest in B-to-B profile like ours.”

One day he came across Grex Alternative Investments Market which is a new exchange-like platform. It helps startups to raise money from various investors. It is somewhat similar to  the crowdfunding platforms. But it has its differences. In crowdfunding, investing individuals expect returns.

A limited number of investors are willing to invest in startups, whereas this is just the opposite for an established company. When startups raise money through crowdfunding they often dilute their stakes.

Mahajan finally listed Kleeto on Grex and gathered funds in a breeze. It raised rs. 1.5 crore from 13 investors and in just 12 days. Kleeto is also the first company to raise funds on Grex.

Manish Kumar, Founder of Grex says, “It was not easy convincing the Kleeto management to list on Grex.”

Equity funding is now the latest trend among startups finding it hard to rope in big investors. Many crowdfunding platforms have come up including Termsheet, Grex, Equity Crest and Let’s Venture. all these platforms combined have made 60 funding deals ranging from Rs. 25 lakhs to Rs. 6 crore.

Source: ET Bureau

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