Assignment 2 New Venture

In today’s society, natural hair is popular for many women which have chosen this over relaxed hair. “More and more, African-American women are leaving behind chemicals used to straighten hair and accepting their natural curls” (P., 2016). “The market for relaxers has fallen for several years now. Sales of hair care products for African Americans reaches $774 million in 2014, representing a 12 percent increase since 2009, according to Mintel” (H., 2015). SheaMoisture is a company that is tailored to the African American community. It provides various products relating to natural hair care products, beauty, such as cosmetics, and hygiene. Tony Roberts, a multicultural analyst for the intelligence firm Mintel stated, “We can see that sales [of relaxers] start to decline as far back as the 1990s. We forecast that the decline [from 2014] will reach 45 percent by 2019” (H., 2015).

SheaMoisture natural hair products ranges from hair masques to the standard shampoos and conditioners. Coconut and Hibiscus Curl Enhancing Smoothie is their current best-selling hair product. SheaMoisture also have products for the body while specializing for men, children, and mothers including women who wear makeup. Some of their products in the afore mentioned areas include African Black Soap, Raw Shea Cupuacu Mommy Soothing Nursing Balm, and Shea Butter Velvet Lip Crayon. (Welcome, n.d.). SheaMoisture creates natural products that are certified to be organic, sustainably-

Because of this movement, natural product production for our hair is on the rise. The attention and awareness that we are receiving is wonderful. However, my concern is when most of my new clients come into my salon with extensive damage from using products that they say are advertised as natural or organic. When, in reality, upon close examination these new products are created by

The goal is to launch an organic product line composed of hair, skin, and body products. The line will offer the succeeding components; a shampoo, conditioner, leave-in conditioner, hair moisturizer, light hair mist and hair growth oil. A facial cleanser, toner, and face moisturizer as well as body lotion, an array of soaps, and body butter. Furthermore, the price point will be between 5 and 15 dollars and will coincide with the size of the product. For instance, an 8 oz. bottle of shampoo will be $5.00 and a 16 oz. bottle will be $10.00. It is important to note that clinical trials are being conducted to test how the product lines affect various hair and skin types. This will allow the company to gain an in-depth understanding of which ingredients are conducive to maintaining a healthy exterior.

The demand for organic makeup and other personal care products is on the rise. Consumers have become increasingly aware about the potential long-term health affects of products manufactured in laboratories that they ingest or put on their skin. In the past, consumers were merely concerned if products worked. Today, they are concerned if they are healthy as well for both themselves and the environment. There is also a desire for beauty products that make the user beautiful 'from the inside out,' rather than merely affect the user's immediate physical appearance. "Back in the 60s, 70s and 80s, who would have considered what ingredients were contained in their hair shampoo, moisturising cream or body moisturiser? This was an era when washing detergent companies cottoned on to the notion that consumers equated highly perfumed products with performance and this trend quickly became apparent across numerous consumer personal care products" (Certified organic skincare & cosmetic labelling in Australia, 2012, New Directions). Today, products that are labeled as natural are often more attractive to consumers.

As a human being we all have not only the need to look good but, to feel good and this is what has led people to use more products such as makeup, perfumery, personal hygiene items, hair products, hand and foot care, among other products; these needs helped to grow the cosmetics industry. Consumers demand multifunctional products that provide us with solutions to different problems and needs this is why this industry is in constant research for the best ingredients and efficiency of their products.

Although terms such as ‘cosmeceutical’, ‘active cosmetics’ or ‘dermocosmetics’ are popular medical terms, the cosmetics industry does not use them directly in its advertising, fearing that such deceptive claims could annoy, offend and insult a consumer’s intelligence who then could become cynical and defensive toward distrustful advertising claims doubting advertisers, the media, and the authority. In any case, consumers are more likely to appreciate a natural product than a cosmeceutical having scientifically proven synthetics.

There are two types of capital that can be raised, debt and equity. Now some would think that as long as there are funds there to work with, regardless of how they were procured, the end result would be the same. However, that is not the case. Debt financing and equity financing have significant differences in how they affect the business’s bottom line and in how they are acquired. For instance, the interest paid on a business loan (option for debt financing) is tax deductible, therefore decreasing the amount of taxable income and increasing overall

A company needs to obtain capital for expansion into new markets and it wants to obtain these funds from external sources. The ways in which company chooses to obtain these funds depends upon the short-term versus long-term financing strategies of the company. As a finance manager for a Fortune 500 company, the plan is to borrow approximately $100 million within the next year, and the manager must present to the board the best option for this large financing. By evaluating the different types of funding options, the finance manager can make the best informed decision for this capital funding. It is ideal for a company to maximize the total value of the company and minimize the overall cost of capital (Shim, Siegel & Dauber, 2008). These decisions include whether to issue debt securities, or obtain financing from individuals and whether the funding should be secured or unsecured. Any capital structure decisions will take into account the nature of the business, strategic plan of the company, its current capital structure and its anticipated growth.

For those seeking capital of $500k+ look for VC. For smaller investments, entrepreneurs should seek a Business Angel or Debt Capital. An understanding of the different types of funding stages is therefore useful so see below.

Raising money is one of the toughest aspects of running a business. If you follow the conventional approach, you’ll probably start by seeking out a lead investor to lead your investment round and to attract more investors on board.

ANDREW J. SHERMAN, ESQ. MCDERMOTT, WILL & EMERY 600 13TH STREET, N.W. WASHINGTON, D.C. 20005 (202) 756-8610 (202) 756-8087 (FAX) AJSHERMAN@MWE.COM (E-MAIL)

In business, companies will always have to raise capital at some stage either because a company needs start-up capital or needs capital to expand. This is an important part of the financial planning structure for businesses because they all require an initial investment to meet their requirements. The majority of people automatically think Initial Public Offering (IPO) when they hear of a company raising capital. It is the basic procedure for a company to make it publicly known that they are selling their securities. In reality, raising capital can be done in many ways, which include loans, leasing and getting investors, which are all classified as small-scale ways of raising capital. Larger ways of raising capital are attracting angel investors, venture capitalists and offering equity. Starting a business without a steady income and constant lessening of whatever savings you may have is one of the most difficult circumstances to be under. For my own business I have used my savings and personal credit, which unfortunately is a limited supply of money. The need for capital never ends and that is why considering your market need, potential competition, risk & return and sources of potential funding are essential to look at before making any decision involving raising capital.

7- Access To Funds: Whether it 's securing funds through a credit card line-of-credit or through angel investors, you cannot grow a business without capital funding for the first five years of a business.(2)

There are other sources of funding aside from debt and equity financing such as grants. A grant is a sum of money given to the company without any requirements to repay the money and without anyone becoming a partial owner (Adelman & Marks, 2014). In most cases, the grant will come from a particular organization and will have a set standard for how the grant can be used. The Small Business Administration also helps companies receives grants if they met the size requirements for number of employees and annual revenue (Adelman & Marks, 2014). While it can be difficult to