Sources of Financing

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What are the two main sources of finance for a business?

Short-term and long-term investments

Seed capital and seed funding

Owner's capital and retained profit

Internal and external (correct)

Which type of finance is considered the cheapest for an organization?

Seed financing

Internal finance (correct)

Owner's capital

External finance

What does seed financing represent in the capital-raising process of a startup?

An internal source of finance

The earliest stage of capital-raising (correct)

A type of debt-based financing

The final stage of capital-raising

Which of the following is an example of an internal source of finance?

Owner's capital Signup and view all the answers

Where do external sources of finance typically come from?

Individuals or sources outside the business Signup and view all the answers

What distinguishes seed financing from other types of financing?

Investors receive equity interest in a company Signup and view all the answers

What is the purpose of seed financing?

To give a founding team enough capital to prove if a concept works Signup and view all the answers

According to Marc Andreessen, what does 'product/market fit' mean?

Being in a good market with a product that can satisfy that market Signup and view all the answers

Who typically provides seed financing?

Crowdfunding Signup and view all the answers

What is the purpose of crowdfunding in financing startups?

Raising money from a large number of people via the internet Signup and view all the answers

What is another term used for founders using their personal savings to fund a startup?

Bootstrapping Signup and view all the answers

What do online crowdfunding platforms like Kickstarter do when a project reaches its fundraising goal?

Stop collecting more money Signup and view all the answers

What is one of the benefits of personal savings for financing a startup?

Independence from investors and loans Signup and view all the answers

Who typically contributes to the Friends and Family round of financing?

Close friends and family members Signup and view all the answers

What characterizes angel investors?

Diversify their investment portfolio Signup and view all the answers

What is a key benefit of Seed Financing for a startup?

Providing funds before the business starts earning Signup and view all the answers

What is the primary purpose of Start-up Financing?

Providing capital at the initial stage Signup and view all the answers

Which source of financing reduces the risk for founders by providing working capital?

Seed Financing Signup and view all the answers

What is a startup accelerator?

A program providing guidance, support, and funding in return for equity Signup and view all the answers

What is the main purpose of attracting additional investors in this stage?

To generate long-term profits Signup and view all the answers

What distinguishes super angel investors from regular angel investors?

Super angels invest larger amounts and provide mentoring support Signup and view all the answers

What is typically expected of businesses at the stage before they begin advertising and marketing their products?

Have a prototype to show investors Signup and view all the answers

Why do businesses need a larger infusion of cash at the stage mentioned?

To complete product development and support business launch Signup and view all the answers

What should businesses demonstrate at the stage mentioned despite having enthusiastic users?

How they will monetize their product for long-term profits Signup and view all the answers

What is the main source of funding for CVC?

Large corporates Signup and view all the answers

What defines a family office?

Company managing wealth for a wealthy family Signup and view all the answers

When does Late Stage Venture Capital typically occur?

After a company proves market opportunity Signup and view all the answers

What do investors look for in First-round Financing?

Performance and evidence of commercially viable product/service Signup and view all the answers

How do Performance metrics impact investor confidence?

They give investors confidence in the team's ability to succeed at scale Signup and view all the answers

What distinguishes Start-up Financing investors from First-round Financing investors?

Investment stage preferences Signup and view all the answers