Lesson 2 Flashcards
involves raising capital by selling shares or ownership stakes in a company to investors
Equity Financing
allows entrepreneurs to secure funding without incurring debt, but it also means sharing control and potential future profits with investors.
Equity Financing
This approach allows firms to secure funding without diluting ownership but involves the obligation to repay borrowed funds with interest
Debt Financing
are high-net-worth individuals who provide capital to startups in exchange for equity or convertible debt.
Angel Investors
often invest their personal funds and can offer mentorship and industry expertise in addition to financing.
Angel Investors
platforms enable startups to raise capital from many individuals, often through small contributions
Crowdfunding
This approach allows private firms to tap into a broad investor base and engage their potential customers as backers.
Crowdfunding
Crowdfunding platforms example:
- Investree
- Kickstarter
- Indiegogo
- GoGetFunding
- SeedIn
- Cropital
- GoFundMe
- AirFunding
- The Spark Project
Investors purchase tokens that may have utility within a platform or ecosystem, allowing startups to raise funds for the development of decentralized applications.
Initial Coin Offerings (ICOs) and Token Sales
is a for-profit business organization—such as a corporation, limited liability company (LLC), or partnership—that provides professional services. Most firms have just one location.
firm
When used in a title, “firm” is typically associated with businesses that provide professional law and accounting services
True
The word ‘firm’ has Latin roots to the word
“Singature”
the word firm the etymology of the word translates back to
“a business” or “a name of a business”
a firm typically **excludes **the sole proprietorship business; it generally refers to a for-profit business managed by —– or—–partners providing professional services, such as a law firm.
a firm typically excludes the sole proprietorship business; it generally refers to a for-profit business managed by two or more partners providing professional services, such as a law firm.
A company can be any trade or business in which ——– or ——-are sold to produce income
. A company can be any trade or business in which goods or services are sold to produce income
Types of Firms
is owned by one person, who is liable for all costs and obligations, and owns all assets. Although not common under the firm umbrella, there exists some ————— businesses that operate as firms.
sole proprietorship or sole trader
Types of Firms
owned by two or more people; there is no limit to the number of partners that can have a stake in ownership
partnership
Types of Firms
the businesses’ financials are separate from the owners’ financials. Owners of a——– are not liable for any costs, lawsuits, or other obligations of the business. A ———- may be owned by individuals or by a government.
corporation
Types of Firms
cooperative is similar to a corporation in that its owners have limited liability, with the difference that its investors have a say in the company’s operations
financial cooperative
Characteristics of a Firm Attractive to Venture Capitalists
Venture capitalists seek firms that have the potential for rapid and substantial growth. They look for businesses operating in industries with significant market opportunities and a scalable business model.
High Growth Potential
They look for uniqueness and a competitive edge in the firm’s offering
Innovative Technology or Idea
————- is a cornerstone of venture capital investments.
Innovation is a cornerstone of venture capital investments.
The team’s ability to pivot and make informed decisions is crucial.
Strong Management Team
A capable and experienced ——– ——- is critical for the success of a venture-backed firm. Venture capitalists want to see a team with a track record of execution, industry expertise, and the ability to adapt to changing market conditions.
Strong Management Team
