Lecture 6

Question 1

STEPWISE EXPANSION

Answer 1

Usually made by young firms

Question 2

QUESTION ON FINANCING GROWTH

Answer 2

Funding needs: How much money?

Founding resources: Where and whom to obtain the money

Type of founding: Sell or not sell equity

Timing: When to go for the money

Question 3

FUNDING SOURCES THAT DO
NOT REQUIRE SALE OF EQUITY

Also pro and con?

Answer 3

Private savings

Friends and family

Bank loans

Public founding

Crowdfunding

+ No loss in control
- Limited amount of money

Question 4

FUNDING SOURCES THAT REQUIRE
SALE OF EQUITY

Also pro and con?

Answer 4

IPO

Angel investors

Getting acquired

+Access to more money
- Less control over the firm