Computer Science 1032A/B Chapter 7: Lecture 7-How Firms Raise Capital

• School: Western University
• Department: Computer Science
• Course: Computer Science 1032A/B
• Professor: Diane Goldstein

Document Summary

Lecture 7: how firms raise capital, dividends/stocks (chapter 198-224) + powerpoint slides. Bootstrapping: the process by which many entrepreneurs raise (cid:862)seed(cid:863) money and obtain other resources necessary to start their business. The initial (cid:862)seed(cid:863) money usually comes from the entrepreneur or other founders. Other cash may come from personal savings, the sale of personal assets, loans from family and friends, use of credit cards. The seed money, in most cases, is spent on developing a prototype of the product or service and a business plan. As this stage of the business development, venture capitalists or banks are not willing to fund the business. Spent on developing a prototype of the product or service and a business plan. (trying to satisfy and interest investors) Bootstrapping period usually lasts 1 to 2 years. Venture capitalists: individuals or firms that invest by purchasing equity in new businesses and often provide entrepreneurs with business advice.