BUS 111W Lecture Notes - Lecture 18: Operating Leverage, Social Capital, Glentel
25 Sep 2020
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Document Summary
Often a company has to trade-off accepting higher fixed costs to get lower vcrr. The lower vc result in a higher contribution and therefore the return is higher above breakeven. Key principle of entrepreneurial finance: risk and expected reward go hand in hand risk-return trade-off. Development stage: seed financing: entrepreneur"s assets, family and friends. Startup stage: startup financing: entrepreneur"s assets, family and friends, business angels, venture capitalists. Survival stage: first round financing: business operations, venture capitalists, suppliers and customers, government assistance programs, commercial banks. Rapid-growth stage: second-round financing, mezzanine financing, liquidity-stage financing: business operations, suppliers and customers, commercial banks, investment bankers. Early maturity stage: obtaining bank loans, issuing bonds, issuing stock: business operations, commercial banks, investment bankers. Development stage: creativity, market assessment and networking, taking an idea, creating a business out of it, have a visual prototype, may be a trial stage where you are still getting feedback.
