Financial Options for a Startup

Capital can come from state and corporate pension funds, public and private endowments and personal investors

par. 3). Start-up capital plays a vital role in putting up a business. How are the owners will operate the business without the finances? How are they going to pay all the expenses like salaries, taxes and materials they need for the business without the money? There are several ways on how to finance the business. Canada Business Network (n.d.) enumerates these ways like government grants, private sector financing, financing from non-government organization, equity financing and personal assets (par. 1). In Canada, there is a government owned financial institution that supports the finances of small businesses which is called The Business Development Bank of Canada (Williamson, 2008, p. 33). Most small business owners do not realize that there are several pathways to finance their businesses that’s why they end up frustrated and unsuccessful. It would be beneficial for the small business owner to know that there are resources available for

Starting a business means involvement of lot of funding no matter what type of business it is. Business start up loans grants are very helpful for those who wish to start their own business but lack proper funding to launch them. If you have a good business idea and you have also surveyed the market to foresee the future of your business, you can apply for these loans or grants. The first thing is that whether you believe in yourself and success of your business idea or not. Your belief will get more weight if you take a genuine survey of the market and find out what could be the future performance of your business type. Once you are sure about the success of your business, you need to make a good business plan. This is one of the important parts when you have decided to apply for the business grants. Also, search for the grants that are capable of fulfilling your business needs and will help you accomplish them. There are various organizations that offer grants for new businesspersons along with the government agencies. Make use of all the resources and research the availability of the grants. Apply for all that you qualify increasing your chances of getting approved. Finding the right grants is the most important step and you should invest some time and effort in this. The main intention of business start up loans grants is to provide necessary moral and financial support to new entrepreneurs so that they are able to get back to their feet and start earning their living.

This is what makes America so great that anyone can start up a business and becomes successful, however there are plenty of business that fail. One of the main issues that we face is being able to fund a start up company. “Small businesses contribute to local economies by bringing growth and innovation to the community in which the business is established”(Brown). Being able to allow business to have more access to money with out collateral is a must. “Approximately 62% of Americans have less than $1,000 in their savings accounts and 21% don’t even have a savings account”(Fottrell).

Financing is needed to start a business and to increase the businesses profitability. There are several sources to consider when looking for start-up financing. The financial needs of a business will vary according to the type and size of the business. For example, processing businesses are usually capital intensive, large amounts of capital. Retail businesses and small businesses usually require less capital. Requiring.

Venture capital(VC), which is known as the risk investment, shows significant role in promoting the SMEs in raising finance. VC includes business angel financing, relationship lending and so on. All of them are good choices for SMEs, specifically for the small and medium companies which are just starting up.(Dagogo, 2009) “Venture capital is the fuel for high potential growth firms, especially in the United States. New venture survival is tenuous at best, but those backed by venture capitalists tend to achieve a higher survival rate than those that are not.” said by Robert(2010), moreover, in his study shows “ survival for venture capitalists backed ventures range from around 65 percent to 85 percent of the venture capitalists’ portfolio.” If SMEs managers can get help like this, they would have more chances to develope. Having a overview on the SMEs, they have nothing but the companies, without large amount of capital or collaterals.VC might be a better method of

First and foremost, we needed our monetary sources mapped out to overcome the financing gap many small firms face. The £10000 of savings of the entrepreneur was taken as the start-up capital to finance

Raising capital for a young business can be a difficult process. My businesses inevitably fail simply because they did not have the right amount of capital to start with (Keyes, 2007). A lack of capital can force an entrepreneur to make poor decisions simply because they did not have enough money to make the right one. A lack of funding will also lead to a lack of cash follow, which is considered the life blood of a starting business. Furthermore, funding short falls make it very difficult to hire talented employees because they cannot be paid what they are worth. There are many different ways an entrepreneur can raise money, but they are usually divided into debt or equity financing (Keyes, 2007). In both cases, the funding can come

In the context of small to medium enterprises, statistics show that about half of new businesses fail within five years (Anderson 2014). The reasons for why new businesses fail have been a number of reasons. Some of them are due to high interest rates, taxes, and lack of bank lending (Anderson 2014). In the UK sector, it has been noted that the chances of a new business from flourishing is even harder than before the financial crisis (Anderson 2014). With the countless amount of reasons for why SMEs do not prosper

Venture Capital has been used as a tool for economic development among developing countries in relation to financial markets that struggle both financially and developmentally. In many countries, venture capital is known to play a role in facilitating access for choosing firms that may be at risk for standard capital markets. The people chosen in the investment firms are referred to as a Venture Capitalist. In the last 25 years, venture capitalists often have replaced the individual and corporation as the catalyst for innovation and technological change. The background of venture capitalists has risen from corporate, financial or consulting backgrounds with various titles in firms that each play significant roles in the development of a company. With positions similar to investors and the interest of successful ventures, these capitalist provides experience in dealing with situations, extensive contacts, cross selling, supervision, management skills, and enhancement value of the company. Formed primarily by a group of investors, their initial responsibility is to provide suitable financing to small and early stage firms which are new in the industry and who are not able to generate finances from any other available sources. These venture capitalists increase start-up or expansion capital, and provide advisory services during the term of their investment.

Small and medium sized scale enterprise ( SMEs ) occupies the crucial position among the worldwide economic activities, particularly in developing country, whose flourish has already became a sign of the rapid development of economy. However, more than half SMEs face the severe challenges of surviving. Among all the possible threats during business activities, inadequate access to capital is the most important factor to determine the enterprise’s destiny (CCH, Australia, 2013). Even worse, SMEs are under the tremendous stress of the financial and economic crises which lead to the depressed consumer market, contractive loan of financial institutions. Given the important place of SMEs in world economy and the worsening global

The field of entrepreneurial finance is one that is rapidly evolving. This study will look at ways through which, entrepreneurs rely on experiences, to make their financial decisions (Greenwood & David 104-110). There are various problems and situations that entrepreneurs may face during their venture into financing their businesses. It is obvious that entrepreneurs face direct and unique challenges every time they focus on creating of value and objectives for their financing strategies. The financial choices made by entrepreneurs, therefore, have to get past uncertainties and risks that any new ventures meet for success. They should further devout their efforts on financial designs and models through the valuation of new ventures (Flores et al 541-555).

As a young Indian, I always want India to be filled with people of new innovative, creative and productive ideas and thoughts. And I strongly believe that if these thoughts can be made into actions with the advancements in Information technology, it can heal India’s soaring problems like unemployment, illiteracy to an extent. But recent reports on India’s ‘ease of doing business’ rankings is very alarming. Even after 20 years of economic reforms, India slipped from 131st position in 2013 to 134th position in 2014.Among BRICS countries, India is doing the worst. And among the issues faced by Small, Medium Enterprises which includes startups, credit issues is a main concern. In a recent secondary research done by me in finding credit issues of SMEs, results showed that out of all SMEs, 92.77% have no finance or self-finance. This has really affected the growth of SMEs in India. Even after increase in number of venture capitalists/angel investors to protect new ideas, this result shows that time has been exceeded to find a sustainable solution for this issue.

1.1.1. Innovation and the Economy........................................................................................................... 1 1.1.2. Sources of Finance.......................................................................................................................... 1 1.1.3. Venture Capital Funding ................................................................................................................ 2 1.1.4. An Area of Great Importance.......................................................................................................... 4 1.2. 1.3. 1.4. 1.5. 1.6. 2. PROBLEM AREA AND RESEARCH QUESTIONS ................................................................................... 4 PURPOSE STATEMENT

There is a need for improving different aspects of financial services of SMEs, such as seed money, leasing, venture capital and investment funding. There is a lack of long-term loans; interest rates are high, Guarantee/Security issues, exchange risks etc. All these limit the development of SMEs. Finance, both short and long term, should be provided at market cost of capital.Fund should be made available through encouragement for setting up ‘Venture Capital’ organization in Bangladesh. The concept of venture capital (VC) has successfully operating in the USA, EU countries, and Canada.