Textbook Notes (363,140)
Canada (158,217)
Commerce (491)
COMM 320 (46)
All (13)
Chapter 4

Entrepreneurship Chapter 4.docx

11 Pages
Unlock Document

Concordia University
COMM 320

FINANCING NEW AND GROWING ENTERPRISESAN OVERVIEWThe type of financing required and the terms available are usually determined by the stage of the businessAngel investor willing to invest at early stages and at favorable termsCapital money required to start and run the businessVenture capital private firms that invest in businesses with high growth potential in in return for equityThe Importance of Capital and PlanningCash is the heart of a business without it the business failsHow much do you needWhen will the funds be usedHow long will the money lastWhere can the money be raised and what type of financing will be usedDo you need funds immediatelyWill you get anything else besides moneyBusiness Stages and FinancingStartup businesses are usually selffunded personal savings lines of creditBanks usually do not give loans to startup businessesThe opportunity which the business is pursing can also determine the type of financingSlow growth businessesoEarly StageSeed capitalsmall amount to conduct market research and develop the business plan Financing comes from personal savings personal lines of credit money from friends and relatives government programsStartupfunding to get the business running Financing needed for working capital inventory and marketing Financing comes from personal savings personal lines of credit money from friends and relatives government programs and loans from banks that are personally guaranteedoExpansionMaintaining operationsFirst stagefunding to maintain operations as the business is striving to become profitable Financing is used for daily operations working capital and marketing Sources of financing are personal savings retained earnings trade credit personal or business lines of credit and loans from banksSecond stagebusiness is profitable and may start a slow to medium expansions Financing is used for working capital and expansions ideas Sources of financing are retained earnings commercial line of credits and trade creditsHigh growth businessesoEarly stage financingSeed capitalsmall amounts to prove concepts and finance feasibility studiesStartupproduct development and initial marketing get the company startedSources of financing personal investment friends and relatives angel investors and venture capitaloExpansion or development financingSecond stageworking capital for initial growth phaseThird stagemajor expansion for company rapid sales growth breakeven positive profit levelsFourth stagebridge financing to prepare company for public offeringSources of financing venture capital personal investment and government programsoAcquisitions and leveraged buyout financingTradition acquisitionsassuming ownership and control of another companyLeverages buyoutsmanagement of a company acquiring company control by buying out the present owners
More Less

Related notes for COMM 320

Log In


Don't have an account?

Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.