Verified Document

Funding A Business Venture Business Plan

Funding a Business Venture All startups need to find a means of financing their operations. The company must explore different financing options in order to make a determination as to the best option. In the process of exploring financing options, there are a number of different financing terms that need to be understood. This paper covers some of those terms and discusses the issue of startup financing. The pros and cons of some key options are outlined and a recommendation is made with regards to the ideal source of financing for the new technology idea.

There are a number of mechanisms for the financing of a business venture. Each mechanism has its advantages and its disadvantages. These will need to be understood and considered prior to making a decision about financing.

The first financing option is the investment banker. Investment bankers are essentially brokers who put together deals, matching those with money and those in need of financing. An investment banker can put together one deal for one type of financing, or multiple deals for multiple types. The flexibility afforded by an investment banker is offset in part by the high cost, usually in the form of commissions on the deal. In addition, investment bankers seldom work with startups.

The stock market is the second method of financing. Going to the stock market allows the firm to potentially...

This is the main benefit of the stock market, and it comes with a number of drawbacks. Going public means the firm must open its books, increasing accounting costs and even risk to the CEO and CFO, who are legally liable under Sarbanes-Oxley for the accuracy of the financial statements. In addition, going public could cause the company to cede control if it sells over 50% of its equity. Lastly, the stock market is generally not receptive to companies that do not have earnings yet.
Financial management is a general term that refers to a number of sub-disciplines. These are bound by the common theme that the company seeks to lower its financial costs of doing business, to ensure that it has money in the right place at the right time and that the company minimizes financial risk. Financial management is reflected in the firm's choice of financing, in its working capital management and in its accounting practices. There is no downside to financial management -- good financial management is an essential component of all organizations.

Risk financing refers to the provision of funds to help cover the cost of unexpected losses. Adverse events occur in business. In this business, for example, demand could be directly related to the overall health of the economy. The company could face setbacks with respect to patents or technological…

Cite this Document:
Copy Bibliography Citation

Related Documents

Day Spa Business Plan My Business Venture
Words: 853 Length: 3 Document Type: Essay

Day Spa Business Plan My Business Venture is the Day Spa and my financial plan is to initiate, maintain, and improve the factors that will increase and stabilize my cash flow. My business will implement effective cost management to increase the business net worth in the first year and in the foreseeable future. The paper presents the pro-formal balance sheet based on some important assumptions. My financial plan depends on some important

Business Plan the Mission of the Business
Words: 3995 Length: 12 Document Type: Business Plan

Business Plan The mission of the business will be to provide quality gourmet food and utmost convenience and choice to traveling airline passengers. While giving complete control to the airline passenger by allowing them to choose their meal and determine the cost without the inconvenience and time crunch inherent in airport food establishments or scarce in-flight food offerings. The management team will consists of several food service industry specialists and two travel

Business Plan for Solar and
Words: 1692 Length: 6 Document Type: Business Proposal

Mounted on the side of the pole are 2 solar panels made by F3 Solar that are capable of generating up to 80 W. Of power. -No lamp changes -- sealed for life. -Fully controllable with excellent colour rendition -Multi combination outputs. -Remote electronics. -LED Life expectancy -- 25 years + Prices vary by distributor Green Column (http://www.wirefreedirect.com / green_column.asp) The wind and solar powered solution delivers free, renewable energy which is stored in a battery ready

Business Finance Sources of Finance Sources of
Words: 1838 Length: 6 Document Type: Essay

Business Finance Sources of Finance Sources of Business Finance Finance is the life blood of every business as all types of businesses need money at every stage of their operation. It is of vital importance particularly for the modern businesses which require huge capitals. Finance is actually the determinant of the firm formation and it not only influences the ability of any firm to enter in the market but also affects its performance

Business Case Should Patenting Genes
Words: 537 Length: 2 Document Type: Article Review

Analysis Annabelle Lever makes a very strong argument for her case, and is ultimately convincing in her assertion that the degree of manipulation necessary to create a patentable gene warrants their continued patentable nature without ethical fears entering the picture. While it is important to respect life and the building blocks of life and to ensure that these building blocks do not suddenly fall under ridiculous legal restrictions or controls, it

Funding for Entrepreneurs Seeking Seed Capital to
Words: 915 Length: 2 Document Type: Essay

funding for entrepreneurs seeking seed capital to actualize their business ideas. The said funding sources in this case include but they are not limited to angel investors, bank loans, venture capitalist, friends and family, etc. In this text, I discuss angel investing. In so doing, I will largely concern myself with the pros and cons of the same. A few years ago, James Barnham turned down an offer from a

Sign Up for Unlimited Study Help

Our semester plans gives you unlimited, unrestricted access to our entire library of resources —writing tools, guides, example essays, tutorials, class notes, and more.

Get Started Now