chapter 3 Flashcards
What is an Entrepreneur?
Entrepreneur- person who finds and acts on idea that no one else has
Doesn’t follow model, but some consider franchise and small biz owners to be apart
Entrepreneurial Opportunity
Entrepreneurial opportunity- Point where creator finds consumer demand meets the probability of satisfying the product/service
Can emerge through searching or just random
Product-Market Fit
If you build it they will come… NO
Must discover customer base
Business Plan
Formal doc used for long range plan of operation (roadmap)
Finances, background info, market analysis, objectives, and summary
Investors need
Entrepreneurial Finance
Funds- needed capital to get business of ground
Can’t just get you past initial planning
Gotta figure out requirements (labor, skills, facilities) & then cost
Financing- raising funds to launch
Businesses usually have 3 stages of funding growth
seed
early
growth
Seed:
personal funds, family & friends, angels
Early:
Venture capitalists, angel investors (SEC accredited and lotta risk)
Growth
Self sustaining, private equity sale, IPO
Venture capitalist-
its own job unlike angel and more specialized
Private equity-
invest in private and take to IPO
Mature state=
operating as business plan stated (self-sufficient)
Types of Financing
debt finacing
equity fiancing
small bussiness
Debt financing
direct money outflow, but you need whole company
Equity financing
lender owns stake & no immediate cash flow (Shark Tank)
