COMM 320 Chapter Notes - Chapter 1-10: Angel Investor, Startup Company, Sweat Equity
28 Apr 2017
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Personal funds: the vast majority of founders contribute personal funds, along with sweat equity, to their ventures. (sweat equity represents the value of the time and efort that a founder puts into a new venture. ) Friends and family: second source of funds for many new ventures: bootstrapping: finding ways to avoid the need for external inancing or funding through creativity, ingenuity, thriftiness, cost cutting, or any means necessary. Preparing to raise debt or equity inancing: step 1: constructing and analysing documented cash low statements and projection for capital expenditures. Knowing exactly how much money to ask is important because: a. don"t want to be caught short & don"t want to pay capital if not needed, b. Poor impression if uncertain: sept 2, equity inancing: exchanging partial ownership in a irm, usually in the form of stock, for funding, debt inancing: getting a loan.
