COMM 320 Chapter Notes - Chapter 4: Leveraged Buyout, Angel Investor, Retained Earnings
Document Summary
The type of financing required and the terms available are usually determined by the stage of the business. Angel investor: willing to invest at early stages and at favorable terms. Capital: money required to start and run the business. Venture capital: private firms that invest in businesses with high growth potential in in return for equity. Cash is the heart of a business; without it the business fails. Start-up businesses are usually self-funded (personal savings, lines of credit). Banks usually do not give loans to start-up businesses. The opportunity which the business is pursing can also determine the type of financing. Seed capital small 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 programs. Start-up funding to get the business running. Financing needed for working capital, inventory, and marketing.
