New Venture Financing Case Questions, Case Study Example

1. What can entrepreneur do re financing so it will be perceived as less risk?

There are several options for an entrepreneur to make an investment less risky. One is through pledge personal and another is to promise to pay the money back in a short span of time for the investors to gain confidence in the investment-agreement.

2. Where do we find lower cost forms of financing re liabilities?

It is best of find lower cost forms of financing reliabilities in the process of investing with startup businesses. This is because of the fact that the startup businesses have not any particular reputation to back up their position in the market yet, hence are not able to create high-cost stock shares in the market yet. Nevertheless, picking the sure-success organizations would play a great role in assuring the profit returns for the investor in this picture.

3. What is seed capital and who generally provides same?

Seed capitals could be provided by the angels; they are the ones known to release funding support to startup organizations through financing their operations. However, such help accounts for high returns based on the future performance of the business which means that they have a share in every profit that the business earns [at times the condition is whether or not the company actually earns].

4. What is bootstrapping type financing?

Bootstrapping refers to the manner by which small business owners are able to utilize their assets to the best extracting finances from their own savings, gaining loans from the bank and others but do not actually decide to use the help offered by the angels.

5. What and who are Angels?

They are also noted as the financiers. They support startup businesses and get an agreement to get shares from the business itself.

6. What is a business plan and is it necessary re financing? Why?

A business plan is a compilation of several documentations that are needed to prove the possibilities of growth that an organization uses as a basis of continuance. This is important to make sure that all the assets that are being invested upon the business would be able to gain returns that are necessary to regain investment earnings for the investors and the owners altogether.

7. Define Venture Capital. What are expected returns of Venture Capital? Where does Venture Capital occur in the life-cycle of the firm?

Venture capital is the pool of equity capital that is managed under professional guidance. This means that it is a collection of investments are placed under the care of a financial manager hence such amount is expected to earn accordingly under the guidance of the manager. The proceeds of such investment often support the overall capital of the business used for continuous operations.

8. Define proprietary material. Should it be included in the Business Plan?

Proprietary material refers to the capital and other assets shared by the owner/s in the establishment of the business. Including this in the business plan shall provide a more defined path for the business to take especially in returning such amount of financial or capital asset to the owner of the organization.

9. Define debt security and equity security.

Debt security is a presumed lower risk investment as it is repaid under a specific schedule while equity security is understood as the balance of cash inflow and outflow in the company or the business that defines its capacity to earn profit both for the business and its investors.

10. Define syndication.

Syndication is the process by which the investments are enrolled in an administered policy that cannot be affected otherwise especially by outside factors of the market.

11. What is cash flow financing? Where is it obtained?

Cash flow financing is often provided through bank assistance and it is expected to support loss of capital at the point of the business undergoing profitless operations.

12. What is asset based financing?

Asset-based financing involves the company providing pledges or firsthand access to profit forecast to the investors they hope to attract.

13. What is Venture leasing?

Involves the rental or leasing of a specific equipment that is scheduled for a specific span of time [usually fixed in terms of years].

14. What is internally generated financing?

This is the process by which the owners and investors intend to get additional fund from the internal members of the organization through making them associates or partners of the business which in the end promises them profit shares based on the performance of the organization in the market.