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Full Glossary > Importance Of Finance > Flashcards

Importance Of Finance Flashcards

1
Q

Eight forms of finance for small enterprises

A 
Personal resources 
venture capital companies
commercial banks 
micro finance 
crowdfunding 
Philanthropy venture capital 
government financing 
capital markets
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2
Q

What are personal resources

A

Savings and Fonz borrowed from family

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3
Q

What are the positives regarding personal resources

A

Usually interest-free

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4
Q

What are venture capital companies

A

Small companies or individuals that are best directly to enterprises

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5
Q

What do you venture capitalist company is usually require to invest

A

Representation on the board

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6
Q

What are the negative regarding venture capital companies

A

Loss Of control

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7
Q

What are micro finance

A

Financial resources to offer loans savings insurance

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8
Q

Where is micro finance in popular

A

Developing countries

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9
Q

What two types of micro finance are there

A

Government regulated providers and informal finance providers

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10
Q

Why are informal finance providers risky

A

They operate outside government regulations

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11
Q

What are the positives regarding micro financing

A

People are seen as members and lone to each other

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12
Q

What is a big negative regarding micro financing

A

High interest rates especially when loans have been defaulted

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13
Q

What is crowdfunding

A

Findings in from individuals or groups over the Internet derived from small entrepreneurial individuals and teams

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14
Q

What sort of capital does crowdfunding provide

A

Start up and working capital

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15
Q

What are the negatives regarding crowdfunding

A

Not much due diligence

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16
Q

What are the positive regarding crowdfunding

A

Owners keep control of their business

17
Q

What is for philanthropic venture capital

A

Finance that is usually provided for social enterprises by high net worth individual’s

18
Q

Apart from finance what else does philanthropy venture capital provide for small businesses

A

Advice and engagement

19
Q

What is government financing

A

Tax allowances loans grants and training allowances all to encourage small enterprises

20
Q

What are capital market financing

A

Companies listed plc and trading stocks and shares

21
Q

What is the alternative investment market

A

A capital market for small businesses to sell stocks and shares and is less expensive

22
Q

In regards to financing what is the enterprise life-cycle

A 
Concept 
start up 
early-stage 
establishment
 growth 
or exit
23
Q

What is the finance needed to go from concept to start a business

A

Seed capital usually got in from personal resources

24
Q

What is seed capital mainly used for

3

A

Market research
product research
development plan

25
Q

What is bootstrapping

A

Starting a business with a few resources and take control of costs usually reinvested into the business

26
Q

At what stage of the enterprise life-cycle is bootstrapping usually used

A

Concept to start up

27
Q

And enterprise life-cycle what a start-up business use are concerned with

A

Entering market and survival

28
Q

What do you start a business need finance for

A

Be able to operate for six months

29
Q

Where do you start up businesses usually get their finance from

A

Family and friends

30
Q

Why are our bank loans hard to get for start-up businesses

A

The business has no track record

31
Q

How do most early stage businesses finance

A

Internal funds

32
Q

What are venture capitalist looking for in early stage businesses to finance

A

Growth potential

33
Q

At the establishment stage in businesses finance depends on two strategic objective’s

A

Deciding on whether to expand into new markets or diversifying products

34
Q

Why is funding more likely in establishment stage businesses

A

The risks are better understood

35
Q

What is the growth choice for growth establishment the businesses. 3

A

Maintain market share
reduce costs by increasing scale of operations
defence against competition

36
Q

In the exit stage of enterprise life-cycle how does capital in released as a reward
3

A

Trade sale
management buyout
initial public offering

Full Glossary (9 decks)

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