Startup Finance Learning Outcomes

After going through the chapter student shall be able to understand: Introduction including ______ Presentation

Traditional lenders like banks etc. are not interested in a startup business because when you are just starting out, you're not at the point yet where a conservative lender or investor can rely on security of your assets or be able to forecast cashflows to secure their investments or estimate your repayment capacity with certainty. So that leaves one with the option of selling some assets, borrowing against one’s home, asking loved ones i.e. family and friends for ______ etc.

But that involves a lot of risk, including the risk of bankruptcy and strained relationships with friends and family. So, the pertinent question is how to keep loans from family and friends strictly ______ like.

This is the hard part behind starting a business -- putting so much at risk but doing so is essential. It's what sets entrepreneurs apart from people who collect regular salaries as ______.

A good way to get success in the field of entrepreneurship is to speed up initial operations as quickly as possible to get to the point where outside investors can see and feel the business venture, as well as understand that a person has taken some risk reaching to that level.Some businesses can also be bootstrapped ( start and build a company from personal finances or from the operating revenues of the new company).They can be set up and grown quickly enough to make money without any help from investors who might otherwise come in and start dictating the terms.In order to successfully launch a business and get it to a level where large investors are interested in putting their money, requires a strong business plan.It also requires seeking advice from experienced entrepreneurs and experts -- people who might invest in the business sometime in the future. 2.SOME OF THE INNOVATIVE WAYS TO FINANCE A STARTUP Every startup needs access to capital, whether for funding product development, acquiring machinery and inventory or paying salaries to its employee.Most entrepreneurs think first of bank loans as the primary source of money, only to find out that banks are really the least likely benefactors for startups.So, ______ measures include maximizing non-bank financing.Here are some of the sources for funding a startup: (i) Personal financing: It may not seem to be ______ but you may be surprised to note that most budding entrepreneurs never thought of saving any money to start a business.This is important because most of the investors will not put money into a deal if they see that you have not contributed any money from your personal sources.(ii) Personal credit lines: One qualifies for personal credit line based on one’s personal credit efforts.Credit cards are a good example of this.However, banks are very cautious while granting personal credit lines.They provide this facility only when the business has enough cash flow to repay the line of credit.(iii) Family and friends: These are the people who generally believe in you, without even thinking that your idea works or not.However, the loan obligations to friends and relatives should always be in writing as a promissory note or otherwise.(iv) Peer-to-peer lending: In this process a group of people come together and lend money to each other.Peer to peer lending has been there for many years.Many small and ethnic business groups having similar faith or interest generally support each other in their start up endeavors.(v) Crowdfunding: Crowdfunding is the use of small amounts o...

Every startup needs access to capital, whether for funding product development, acquiring machinery and inventory or paying salaries to its employee.Most entrepreneurs think first of bank loans as the primary source of money, only to find out that banks are really the least likely benefactors for startups.So, innovative measures include maximizing non-bank financing.Here are some of the sources for funding a startup: (i) Personal financing: It may not seem to be ______ but you may be surprised to note that most budding entrepreneurs never thought of saving any money to start a business.This is important because most of the investors will not put money into a deal if they see that you have not contributed any money from your personal sources.(ii) Personal credit lines: One qualifies for personal credit line based on one’s personal credit efforts.Credit cards are a good example of this.However, banks are very cautious while granting personal credit lines.They provide this facility only when the business has enough cash flow to repay the line of credit.(iii) Family and friends: These are the people who generally believe in you, without even thinking that your idea works or not.However, the loan obligations to friends and relatives should always be in writing as a promissory note or otherwise.(iv) Peer-to-peer lending: In this process a group of people come together and lend money to each other.Peer to peer lending has been there for many years.Many small and ethnic business groups having similar faith or interest generally support each other in their start up endeavors.(v) Crowdfunding: Crowdfunding is the use of small amounts o...

Personal financing: It may not seem to be ______ but you may be surprised to note that most budding entrepreneurs never thought of saving any money to start a business.This is important because most of the investors will not put money into a deal if they see that you have not contributed any money from your personal sources.

Credit cards are a good example of this.However, banks are very cautious while granting personal credit lines.They provide this facility only when the business has enough cash flow to repay the line of credit.(iii) Family and friends: These are the people who generally believe in you, without even thinking that your idea works or not.However, the loan obligations to friends and relatives should always be in writing as a promissory note or otherwise.(iv) Peer-to-peer lending: In this process a group of people come together and lend money to each other.Peer to peer lending has been there for many years.Many small and ethnic business groups having similar faith or interest generally support each other in their start up endeavors.(v) Crowdfunding: Crowdfunding is the use of small amounts o...

Family and friends: These are the people who generally believe in you, without even thinking that your idea works or not.However, the loan obligations to friends and relatives should always be in writing as a promissory note or otherwise.(iv) Peer-to-peer lending: In this process a group of people come together and lend money to each other.Peer to peer lending has been there for many years.Many small and ethnic business groups having similar faith or interest generally support each other in their start up endeavors.(v) Crowdfunding: Crowdfunding is the use of small amounts o...

Peer-to-peer lending: In this process a group of people come together and lend money to each other.Peer to peer lending has been there for many years.Many small and ethnic business groups having similar faith or interest generally support each other in their start up endeavors.(v) Crowdfunding: Crowdfunding is the use of small amounts o...