BU121 Study Guide - Final Guide: Venture Capital, Angel Investor, Operating Cash Flow
Document Summary
Before time 0, all happening before the business is officially started. Seed financing yourself + families, friends: no t(cid:396)a(cid:272)k (cid:396)e(cid:272)o(cid:396)d (cid:455)et, (cid:455)ou do(cid:374)(cid:859)t ha(cid:448)e a(cid:374)(cid:455)thi(cid:374)g to talk to othe(cid:396)s a(cid:271)out. Revenue generation is the true signal of the beginning of the startup stage time=0. Revenues pay some but not all of expenses, borrow or give up equity to acquire financing. Will fluctuate, so(cid:373)e (cid:373)o(cid:374)ths (cid:455)ou(cid:859)(cid:396)e ahead othe(cid:396)s (cid:455)ou(cid:859)(cid:396)e (cid:271)ehi(cid:374)d. Easiest bet would be to find as many of your own expenses as possible and try to lower them: you can also go to supplies/customers and government programs to try and maximize value. Finally cash flow positive, revenues steadily increasing. Second-round financing mezzanine financing and liquidity stage. Found through business operations, suppliers/customers, commercial banks, investment bankers. Growth slows, most value realized, consider exit. For many companies you will find a way to ease the slowing of the company though not much more growth. Obtain bank loans, issue bonds and stock.
