Funding for New Firm Essay

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There are several ways a business can obtain needed financing. One way is to get loans from banks or investors. Another is to sell partial ownership in the company in the form of stocks. While yet another ways is to license the use of a product or technology. A management decision needs to be made as to which form of financing best suits the firm and product. Once the decision is made the possible pros and cons should be analyzed as well as alterative to the chosen financial decision. Funding being the most important and necessary part of starting a new business, the use of financial management is imperative. An investment banker would be very beneficial in the planning of our firms financial growth and sustainability.
Funding
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This is where our company stocks will be bought and sold once our firm becomes a corporation. The investment banker will be helping to facilitate the selling and buying of stocks by way of the stock market.(Marshall, 2000)
The third term is financial management. Financial Management is the planning for the future of a business to ensure positive cash flow. This also includes the managing and maintenance of financial assets. The primary concern of financial management is the assessment of risk rather than the techniques of financial quantification. Financial Management is a key necessity for all business and ours will be no exception.(Economy Watch, n.d.)
The fourth and final term is risk financing. Risk Financing is a process to determine the strategy that creates an optimal balance between retaining and transferring risk within an organization. To put it simply, this is insurance against people who owe you money. This is a form of managing and minimizing financial risk to the company or firm.(AON, n.d.)
Furthermore, after careful consideration of the available forms of finance, the management decision is to borrow money from investors, banks, and partners in the initial startup faze of the new firm. Sense the firm is starting out as a partnership this seems to be the most logical form of finance to accomplish our objectives. Once the firm transitions into a corporation, our stock can be traded on the stock market. Additionally, as
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