Financial Options for a Startup

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Hochschule Rosenheim University Of Applied Sciences Financial options What options does a start up have to finance itself in the current market? Seminar paper University of Applied Sciences Fachhochschule Rosenheim faculty of business administration Presented by: Nicolas Jacobs Sebastian Zeitz Date: 12/18/2013 Address: Hochschulstraße 1 83024 Rosenheim E-mail: Matr. -Nr.: 822416 739045 Advisor: Prof. Dr. Ralph Kriechbaum Table of Contents 1. Introduction 3 1.1 Current market situation 3 1.2 Economic role of start-ups 4 2. Start-up life cycle 4 2.1 Early business stages 5 2.1.1 Seed stage 5 2.1.2 Start-up stage 5 2.1.3…show more content…
In 2012 more than 44000 entrepreneurs with their coming up business have been registrated there. Most of them based on IT or Internet such as the famous success of online retailer Zalando. Those young innovative companies, as start-ups are described, have a high potential development. This type of structure is generally a temporary organization created to search for a suitable business model and to find out an appropriate market. On their way they “lead to a healthier economy and provide an opening into a highly competitive and largely impenetrable job market”. They can reduce unemployment levels significantly. As a result of globalization the increasing competition between small businesses, forces start-ups to develop their products quicker, more efficiently, and cheaper, working on and perfecting their product before it hits the market, which streamlines business and encourages market competition. So their demand is secured and time and resources are saved in the long run. However, most of the start-ups will never find enough investments and will die before coming on the market. So what options does such a company have to finance itself in the current market? How can we prevent to fail because of inadequate capitalization and secure these important resources? What does a life cycle of start-ups looks like? How many options do we have and which financing is useful at what stage? These questions
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