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Funding/Business Supports (Alternatives for raising money (Personal…
Funding/Business Supports
Why most new ventures need funding
Cash flow challenges
Capital investment
Lengthy product development life cycles
Alternatives for raising money
Personal funding
Family and friends
Personal funds
Bootstrapping
Equity capital
Exchanging partial ownership, usually in the form of stock, for funding
Preparing to raise debt or equity financing
Steps
Determine precisely how much money is needed
Determine the type of financing or funding that is most appropriate
Develop a strategy for engaging potential investors or banks
Creative sources
Crowd funding, e.g. kickstarter
Debt financing
Getting a loan
The elevator pitch
Brief carefully constructed speech outlining the merits of your business oppertunity
45 seconds to 2 minutes long
Sources of equity funding
Venture capital
Funds from venture capital firms invested in start ups and small businesses with exceptional growth potential
Business angels
Individuals who invest their personal capital directly in startups
Often willing to make small investments
Initial public offering
First sale of stock when listed on a stock exchange
Is a way to raise equity capital to fund current and future operaitons
Raises a companies public profile, making it easier to attract high quality customers and partners
Is a liquidity event that provides investors a means to recoup their investment
Creates a form of currency that can be used to help the company grow via acquisitions