1. What sources of funding are available to entrepreneurs at the early stage of the company?

Self-funding, moonlighting and consulting (bootstrapping), family and friends, angels, micro-equity and micro loans, banks loans, factoring and supplier funding, personally secured bank loans, government sources of funding .

2. What are “virtual” companies? What tools help them function? Why are they of interest to an entrepreneur?

A virtual company is a company that has no office, very few employees, no communication costs, low legal costs. Companies like these highly rely on tools from the internet (skills, software, social media).For the entrepreneur,  the aim is to reduce the level of monthly fixed costs to a minimum, and be more flexible.

3. Describe seven techniques for bootstrapping that you could use if you started a company.

• No or low rent: for example working from home, co-working space/incubator
• Bartering for goods and service: offer something in exchange of something else
• Trading intellectual property rights
• Renting or leasing equipment
• Used equipment
• Access to expensive equipment: university or government labs
• Outsourcing 

4. Why is bootstrapping important for (a) closely held companies and (b) early-stage, high-growth companies seeking equity investors?

Bootstrapping is important for closely held companies because this way, they keep costs lower and the company can grow without any investors and the owner(s) doesn’t lose control of the business. It is an organic way of growing. However, bootstrapping might also be important for early-stage high-growth companies seeking equity investors because you can show the investors how viable the project is and they are more likely to invest in something they know the owner takes seriously and has been able to keep growing on his own.

5. What is meant by factoring of purchase orders? 

You get funding for operations from a private lender securing these loans with the orders you already have. When you customers pay you, the cash goes directly to the lender. He then takes back the amount plus interest and hands you back cash, if any left.

6. How can suppliers help in providing working capital?

If you make sure you will purchase from them, they might offer a credit.