The Importance Of Corporate Finance For An Entrepreneur

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This research has been conducted to examine the importance of corporate finance to an entrepreneur, and the role it plays in an organization regardless of the structure of a company, or stage of growth. The various forms of ownership are reviewed for startup companies and major corporations to highlight the advantages and disadvantages of each form of ownership, and to illustrate the importance of corporate finance. To provide a balanced view of ownership, less common forms of business ownership are examined using the same criteria to further illustrate the importance of corporate finance. Introduction Corporate finance is the area of finance dealing with sources of funding and the capital structure of corporations (Brealey, Myers, & Allen, 2011). Corporate finance also relate to the corporate strategy of an organization (Universtiy, 2015) that managers employ to increase the value of the firm (Scarborough & Cornwall, 2014, p. 71) for its shareholders (Brealey, et al., 2011). Understanding corporate finance is a critical skill for all managers, regardless to the type of business ownership. Too often, there is no thought given to the type of ownership an entrepreneur should choose (Kaplan & Warren, 2013). Consideration should also be given to liability exposures, taxes, capital requirements for startup companies, future capital requirements, motivation, and entrepreneurial fit. Entrepreneurs are motivated by control, by wealth creation, or by social
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