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Question 1

Entrepreneurship definition

Answer 1

using chances regardless of the resources you have

Question 2

advantages and disadvantages of starting a business

Answer 2

+independence, +financial opportunities, +job safety, +family employment, +challenge and creativity, -income fluctuation, -competition, -increased responsibility, -financial losses, -legal responsibility, -risk

Question 3

types of funding

Answer 3

initial: start the company
short term: operational costs
growth: investments to make company bigger

Question 4

equity based funding: definition and types

Answer 4

give part of company ownership in exchange for funds
business angels
venture capitalists
crowdfunding

no obligation to pay back but more expensive

Question 5

debt based funding: definition and types

Answer 5

take on debt and repay it later,

friends family and fools

based on maturity (banks)
short term <1yr, med term 1-5yr, long term 5+ yr
overdraft lombard credit
revolving credit

longer term gives lower interest but more thorough
analysis of credit and collateral

cheaper but have to have credit and must return funds so riskier

Question 6

partnership

Answer 6

contract to jointly start business, basis is an agreement
useful if more than one person needed for funds or expertise
unlimited liability, interpersonal difficulties, difficult to transfer ownership
more stable with joint resources, simple to start, tax benefits

Question 7

sole proprietorship

Answer 7

for securing a family
e.g. lawyers, dentists, etc.
full liability, lack of continuity, harder to get credit
very easy to start

Question 8

limited liability company

Answer 8

one or more entities invest capital and are liable only for what they have invested
high initial expenses, more regulation than sole proprietorship
limited liability

Question 9

corporation

Answer 9

invest capital through purchase of shares

limited liability but very regulated with extensive financial records