...How To Prepare and Present a Successful Business Funding Request EVERY BUSINESS NEEDS CAPITAL Successful businesses are well planned and well capitalized. Being well capitalized means having the ability to access capital when your business needs it. Being well planned is the first step towards being well capitalized. The Cost of Capital I have watched many entrepreneurs lose valuable opportunities because they thought the cost of capital was too high. They spent too much time negotiating over the cost of the money, while their window of opportunity closed. The cost of capital should only be a consideration of the function of losses sustained by not having it. Simply put, if it costs you one dollar in order to make two, are you ahead or behind? What this book will do for you The objectives of this book are to help you • Analyze your market, the competition, and your financials, • Identify your strengths, weaknesses, and strategies, • Establish how much money you will need and when, • Determine the type of capital you will most likely qualify for, • Define what information you need to present to Lenders or Investors, • Package your request for your best chance of success, • Establish the format and flow of your presentation, • Direct you to the Funding Sources that offer exactly what you need, (If you don't know where to send your request, what is the point of all this?) Libraries and bookstores are full of financial "How To Books" and I highly recommend you read as many as...
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...com/sources-finance-advantages-disadvantages-14407.html Personal Savings and Assets Your personal savings and other assets make a great source of capital. Because you already have them, acquisition costs are minimal, and you won't be paying interest on a bank loan or sharing returns with investors. The drawbacks, of course, are that if you plow your personal savings into a business venture, you could lose it all. Some assets, such as retirement accounts, are safe from creditors and bankruptcy courts; placing such assets at risk may not be good for you, especially if you're approaching retirement age and are running out of time to rebuild depleted accounts. Investors Corralling a group of investors can help you raise start up or expansion capital for your business without placing all of the risk of loss on you alone. These investors may be active partners in the business, or they may be silent investors who simply provide capital and wait for their returns. The disadvantage to bringing in investors is that you do give up a certain element of control over the company. Even if you retain a majority interest, you'll need to keep your investors happy. Additionally, if you share the risk with others, you'll also have to share the profits. Bank Loans William Thayer http://smallbusiness.chron.com/advantages-amp-disadvantages-bank-loans-47377.html Private Banks can be another good source of funding. For small ventures, you may be able to secure a personal loan or line of credit;...
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...AND FUNDING 1 Business and Funding American Intercontinental University BUSINESS AND FUNDING 2 Abstract When it comes to business there is always more to learn. This weeks paper will look at a couple very important terms having to do with business management; investment banker, stock market, financial management, and risk financing. The paper will take a brief look at the function and importance of each of these terms and how they apply to business. I will also discuss how I will fund my new business venture, and why I choose that way of funding. There are a variety of ways to fund a business including borrowing from friends and family or even seeking out investors. There is no right or wrong way to fund your business, just what way works best for you and your situation. BUSINESS AND FUNDING 3 Funding a Small Business Venture Previously I discussed the way in which I wanted to run my business. I chose to run my new small business as a sole proprietor. As a sole proprietor I will run my own business and be taxed at a personal income level, and I personally am liable for all business debt (The Ultimate Resource, 2009). I will give you a brief reminder of my situation, I am starting my own small business for a new product I invented, and I believe this product can be used for a wide range of applications. I am very new to the business world...
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...FUNDING A BUSINESS VENTURE Unit 2-IP 1 THE FUNDING OF A BUSINESS RUDOLPH LUCIEN Introduction to Business BUSN105-1203B AIU July 29, 2012 FUNDING OF A BUSINESS VENTURE Unit 2-IP 2 ABSTRACT This essay will cover a list of issues facing the start of a new business and the funding of one. I will talk about the 4 terms investment banker, the stock market, financial management, risk financing, and how each one of them works. I will also discuss 1 of 3 ways that you can use when funding your business. Finally I will identify, describe, and explain everything else that deals with making a funding decision. FUNDING A BUSINESS VENTURE Unit 2-IP 3 Investment Banker Investment bankers are: They are critical figures in financial markets. They are involved in virtually all large financial transactions including mergers and acquisitions, initial public offering, and other securities offerings. An investment banker is someone who also helps companies raise capital by trading in securities and other investments. They function as: Investigation, Analysis and Research (Origination), Underwriting (Public cash offering) and Distribution. Most of the time a single investor banker performs all...
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...Creating a Business Plan Entrepreneurship is the basis of the American dream. It can be one of the most rewarding occupations. Owning a business, making key decisions, and becoming financially independent are very rewarding benefits. Many people see starting a business as something that they will never be able to do, be it because of finances, interest, or knowledge. If people follow certain steps, entrepreneurship may not be as difficult as originally thought. Starting a small business requires skills, planning, and devotion. Certain skills are beneficial in starting a business. Being able to interact with a variety of people such as customers, vendors, employees, bankers, and lawyers is a must. Another trait required to run a business is being organized. An organized business runs smoothly and is not overrun with paperwork. Stamina is also a must. Business owners can spend twelve to fifteen hours a day working. Training for starting a business can be as simple as reading books and internet business guides. Having a college education in business management is not a must, but it can be very beneficial. Planning for a business is one of the most important steps in entrepreneurship. A business plan is a formal document explaining in detail plans for a financially successful business. Any lender will ask to review the business plan before any money is loaned. This living document generally projects 3-5 years ahead and outlines the route a company intends to take to grow revenues...
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...as another event titled “Three Business Models for Social Impact.” While the first event focused on generating capital to fund social enterprises, the latter centered on new business models that attempt to drive social change. At the first event, “Value Creation and Capital Markets,” speakers discussed how socially responsible companies can still use traditional methods of financing. In particular, they tried to push five major points. These points were external options of financing, internal options of financing, crowd funding, appropriate sources for capital, and new financial mechanisms. Of the five, external financing is by far the most traditional method of financing. It includes equity, banks/credit unions, friends/family, and social investors. Social investors can be particularly helpful because they are typically the most interested in your cause. Additionally, philanthropic grants can be used, but often not a reliable means of funding. Government funding is more reliable, but requires more extensive obligations. Internal options can be another source of funding. For example, a company can collect accounts receivable as quickly as possible by offering discounts for timely payment or interest for late payment. On the other hand, they can also delay making payments on accounts payable for as long as possible. Crowd funding is another method of securing financing, and has become extremely popular in recent years. Crowd funding typically consists of an organization...
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...1 FUNDING A BUSINESS FUNDING A BUSINESS Christopher Roberts American Intercontinental University 2 ABSTRACT The Inventor has best found that sole proprietorship works best for him. Now, he has to face which option for funding will be best for him and his business. He will research three options: borrow money, sell stocks or license the technology. He will view different aspects of business financing and research a few different tools that are needed: stock market, financial management and investment banking. He will learn the meaning, function and the importance of each of them. Furthermore upon conducting all research and weighing all options of the three choices, he will have come to the conclusion that borrowing money will best suit him and his business needs. 3 Funding a Business An investment banker is a representative of a bank or financial firm whose job is to raise capital for corporations, boroughs, communities, cities, town and districts to just name a few. A few responsibilities of an investment banker are to organize and negotiate large financial transactions. They also take role of advisor to company clients and introduce beneficial financial ventures for their own firm. When a company goes public an investment banker will assist in creating value for an I.P.O., initial public offering. The purpose of the stock market is to give firms a public forum where they can sell off portions of their company to raise capital. These portions of the company...
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...INTRODUCTION What is a Business Plan? A business plan provides a complete description of a business, explaining its products or services, marketing and sales strategies, the management team, operations and predictions of financial forecasts. In order to demonstrate the viability of the business idea, you should identify that the product or service has a definite market, outline the advantages in terms of competition, and appraise the costs and profit margins. The business plan, therefore, enables a business idea to be taken from the initial conception stage towards a fully reasoned and realistic plan of action. The plan also serves as a working document and essential management tool as it sets out how the business will proceed and the strategies it will employ. It enables possible obstacles to be highlighted and avoided, targets to be focused upon and achieved, and effective structures to be put in place for finances and business strategies. Businesses should use the plan to guide decision making and it should be reviewed, modified and developed as the business progresses and evolves. Businesses that implement their business plan and keep it up-to-date are able to monitor their growth and are in a better position to seek out external funding to assist with future developments. BUSINESS PLAN AND SMALL SCALE ENTERPRISES Small-scale businesses in Nigeria and other developing nations hardly grow to big businesses mainly because of lack of direction on the part of owners of...
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...About Venture Capital (VC) | Starting and growing a business always require capital. There are a number of alternative methods to fund growth. These include the owner or proprietor’s own capital, arranging debt finance, or seeking an equity partner, as is the case with private equity and venture capital. Private equity is a broad term that refers to any type of non-public ownership equity securities that are not listed on a public exchange. Private equity encompasses both early stage (venture capital) and later stage (buy-out, expansion) investing. In the broadest sense, it can also include mezzanine, fund of funds and secondary investing. Venture capital is a means of equity financing for rapidly-growing private companies. Finance may be required for the start-up, development/expansion or purchase of a company. Venture Capital firms invest funds on a professional basis, often focusing on a limited sector of specialization (eg. IT, infrastructure, health/life sciences, clean technology, etc.). The goal of venture capital is to build companies so that the shares become liquid (through IPO or acquisition) and provide a rate of return to the investors (in the form of cash or shares) that is consistent with the level of risk taken. With venture capital financing, the venture capitalist acquires an agreed proportion of the equity of the company in return for the funding. Equity finance offers the significant advantage of having no interest charges. It is "patient" capital...
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...Assignment 9: Business Finance (16.0 points) 1. Choose an example of a type of new company you could start, and then use this company idea to answer the questions below. You might choose to open a hair salon, a babysitting service, a record store, or many other things. This can be the same type of company you chose in assignment 8, or it can be different. a. Describe the type of company you chose. (1-2 sentences. 0.5 points) b. If you needed to get funding for your company, would you prefer to get debt funding or equity funding? Explain why you would prefer this type. (2-4 sentences. 2.0 points) c. If you needed to get funding for your company, describe at least two sources of funding that you would prefer. Explain why you would prefer these sources of funding. (2-4 sentences. 2.0 points) d. List at least four operating costs your business might have. (1.0 points) e. Consider the industry of your company and the current economy, and then explain how these factors might impact your company’s sales. If you do not think these factors would impact your sales, explain why they wouldn't. (2-4 sentences. 2.0 points) f. If you had $5,000 to start this company, which department would get the most funding? Which department would get the least funding? Which phase of the business would be the most expensive? (2-4 sentences. 2.0 points) 2. Review the Financial Statements: Income Statement from Section 9, Lesson 2 of this course. Use the information...
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... There are quite a few pros and cons with having a business partner. They are as follows: Having two people responsible for the big picture, and making sure no important balls get dropped makes for an easier run of things. Having two perspectives on challenges and another brain to bounce ideas off will help avoid a number of disasters that rash decisions can create. Self-care and work-life balance are the elusive goals of every entrepreneur. It's easy to keep pushing yourself to the brink in the interests of furthering your business; what's less easy is to watch someone else being pushed to that same edge. And, as we know, the trickiest piece of the puzzle is the "self" part. Another pro of having a business partner is someone always has your back. It's really easy, as entrepreneurs, to believe that your way is the best way. In fact, many people go into business, because we were pretty convinced of this, and, if your business is successful, you have ample support of that view. But no one is right all of the time, and having a business partner to whom you have to justify your reasoning is a great way to make sure you're making decisions soundly and not just because you like the sound of your own ideas. Often business partners grow apart and you may not always find yourself heading in the same direction as your business partner, even if you start off in exactly the same place. With more than one person at the top in a business partnership you have to divide the dividends when they...
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...business plan analysis Quality training Quality training Table of Contents; 1) Executive Summary 1 2) Company Description 2 3) Market Analysis 4 4) Marketing/Sales Strategy 5 5) Research & Development 7 6) Staffing and Operations 8 7) Financial Projections 9 8) Sales Pipeline 14 9) Funding Requirements 15 10) Appendices 16 1.Report Summary quality Training is providing good training services but as per the business plan analysis we are determining the strengths and weaknesses of the given business plan on basis of the following measures ; * Purpose of the business plan * Product or service and its advantages * Market opportunity * Management team * Track record, if any * Financial projections * Funding requirements Financial projections should be summarised and highlighted. The following format is suggested as a guide: | Year 1 | Year 2 | Year 3 | Sales | | | | Exports | | | | Net Profit before Tax | | | | Investment | | | | Employment | | | | After analysing that business plan we found out that potential Clients often make a provisional judgement based on the market statements and provided information, and that their decision to read the main body of the business will depend on the information presented here. 2.Company Description The quality training is a family owned business so it has many risks and disadvantages in the market and they have not yet...
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...ANGEL INVESTORS Both are affluent individuals who provide capital for a business start-up, usually in exchange for convertible debt or ownership equity. However, they differ from Friends and Family who will typically invest very early when all one has is an idea. The prevailing challenge is people would rather invest in the company rather than the individual. In this regard, it is okay to say that Angel Investors look for same things as Venture Capitalists, but their differences play a hard role in shaping the financial strategies and the future of the business. Venture Capitalists are one way to raise serious amount of capital but as you may imagine there are pitfalls. The final vote on ‘the right of sale’ will also most probably be a mandatory right for them. Since Venture Capitalists main motivation is “Return on Investment as Soon as Possible” they always have an almost manic desire to take over every entrepreneur as quickly as possible and they care less where that return comes from as long as they are able to receive a massive bonus for the risk and skill that they have invested. More appealing to an entrepreneur starting-up is to seek out a business angel investor that is interested in the line of work you are involved in, as they will either take an equity position and some level of debt (or typically a combination of the two) in exchange for their investment. They will also take a seat on your board of directors, which they will in turn use as a platform to monitor...
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...monetary capital gave to early stage, high-potential, development new businesses. The venture capital store procures cash by owning value in the organizations it puts resources into, which typically have a novel innovation or plan of action in high innovation businesses, for example, biotechnology and IT. The ordinary venture capital speculation happens after the seed financing round as the first round of institutional capital to store development (likewise alluded to as Series A round) in light of a legitimate concern for creating a return through a consequent acknowledgment occasion, for example, an IPO or exchange offer of the organization. Venture capital is a sort of private equity. In addition to angel investing, equity crowd funding and other seed funding options, venture capital is attractive for new companies with limited operating history that are too small to raise capital in the public markets and have not reached the point where they are able to secure a bank loan or complete a debt offering . In return for the high risk that venture capitalists accept by putting resources into little and less develop organizations, venture capitalists typically get huge control over organization choices, notwithstanding a significant allotment of the organization's proprietorship (and subsequently esteem). Venture capital is likewise connected with occupation creation (representing 2% of US GDP), the learning economy, and utilized as an intermediary measure of advancement inside a monetary...
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...BUSN105 - 1304B - 23 Funding Your Own Business The importance of an investment banker is what they do. They are important due to the fact that they are of services that offer to the economy. They offer advice for economic dealings, for example, acquisitions and mergers for businesses. When a business retails new securities in order to increase funds, the representative has the responsibility to the actual buyer for these securities. The investment banker in turn would purchase securities from business and arrange a speedy resell of the securities to the investor’s bankers in order to, investigate research, analyze, distribute and underwrite. Typically, an investment banker will perform all of these functions, although some investment bankers are experts in certain areas. Investment banking assist in businesses with raising monies. It offers investment opportunities to the person or group of people. Most of the businesses develop consultative services from the investment banker in regards to mergers, divestiture and acquisitions. Additionally, due to the importance of the roles that are played of investment banker, the commercial banks do not execute these roles. (Morrison A. 1997). A stock market is an open market that trades the businesses stock or shares. The stock markets function is where the businesses can raise monies for their business by allotting shares to the investor. Furthermore, whereas the investor can buy or sell these shares. Business in turn will benefit...
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