MGT3960 Entrepreneurship Management Fall 2015

"There's a way to do it better—find it."— Thomas Edison

Early Stage Funding

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

 

  1. Family/Friends
  2. Small business grants
  3. Loans
  4. Lines of credit.
  5. Angel investors
  6. Venture capital
  7. Form a partnership
  8. Commit to a major customer

 

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

A company  that uses Technology to run a business. They usually don’t have official working HQ.

This is interesting because cost is low and these companies are usually the ones that are able to adapt the best to the world that is changing around them.

 

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

Bartering for goods and services-  Good or Service acts as payment

Renting or leasing equipment- Renting to cut cost

Used equipment- Buying used to save money

Access to Expensive Equipment- Accessing equipment through a connection so that you can use expensive tech/equipment.

Cooperative Purchases- Sharing with other companies

Outsourcing- Using other companies to purchase services the company doesn’t need often

Credit Cards- Having a Credit Card

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

Bootstrapping is when a company is able to do a lot with a little bit of capital. This is important because it is essential that start-ups can manage to function without relying on capital.it also is important because it shows that the entrepreneur’s commitment to show his/her company is succeeding without using money.

This is great for investors to see because it is evidence that the cash that they are investing will in actuality go far. They will feel safe knowing that there money is not being spent carelessly and is actually benefiting the company in the best way possible.

 

  1. What is meant by factoring of purchase orders?

Purchase orders can be used to see how creditable a company is and how interested the market is in purchasing this product or service. To a private investor this is a strong factor that will  determine it they should or should not invest in the business. Many private investors actually believe that this is some sort of safety net because they know that with their loan that the have some sort of a promise that the company will be generating revenue.

 

Author: Ria Zouroudis

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