Funding Strategy Flashcards
1
Q
What is a funding strategy?
A
Funding strategy is the enabler for the business strategy that allows the company to generate a sustainable stream of profits at the lowest cost and risk to the business
2
Q
Why use a funding strategy?
A
- Maintain continuity of funding and cash flow
- Adds credibility to the business strategy
- Increases likelihood of raising funds
- Right source at right time e.g. angel investors will have a different impact to bank loans and should be used at different stages in the business
3
Q
How would you plan a funding strategy?
A
- How much investment is needed to fund the venture, when its needed, how fast can it be repayed
- Then develop cash flow and sales forecasts, funding sources
4
Q
What is ROI?
A
Measures the profitability of the business; gives a percentage return over time
5
Q
How do you calculate ROI?
A
Net profit from sales as a percentage of total investment
6
Q
What are some types of funding?
A
- Research and enterprise funding
- Charities
- Competitions
- Self-funded business/ start-up
- Debt (bank loads, bonds)
- Asset based (secured loans)
- Equity (angel investors, venture capitalist)
- Crowd funding
7
Q
What are some pros and cons of crowdfunding and private equity?
A
see notion
