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Funding a Business

In: Business and Management

Submitted By waitek
Words 1076
Pages 5
Funding a Business
Kimberly Waite
AIU Online

Abstract

This paper will describe the different types of funding available to begin a business. These include borrowing money, selling stock, and technology licensing. This paper will discuss the meaning, function and importance of the stock market, investment banking, financial management, and risk financing. This paper continues with a scenario with a future business owner and the decision making of how to fund his business. This paper concludes with a decision on what type of funding he should chose for his business and the advantages and disadvantages behind that decision.

Funding a Business Every business needs cash to function (Ebert & Griffin, 2011). Deciding how to raise that cash can be a difficult decision. There are many options to raising money; borrowing from a bank, selling bonds, or soliciting cash from outside investors (Ebert & Griffin, 2011). For every option, there multiple platforms. Each option should be carefully considered based on needs. For our entrepaneur in the scenario, I recommend that he consider selling stock to raise capital for his funding needs. Stocks, bonds, and mutual funds are otherwise known as securities. They represent secured, or a financial claim on the part of investors (Ebert & Griffin, 2011). Our businessman could consult with an Investment Banker on this idea. The role of the investment bank(er) is to help issue and sell new securities. They advise on timing and financial terms of new issues, assume liability for new securites, and help create distribution networks for getting the new securities into the hands of individual investors (Ebert & Griffin, 2011). All of these are important factors for a business because it is an easier way to reach investors that are looking for additional ways to earn money. The new securities would

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