Raising Capital

Question 1

These are the Challenges in Raising Capital.

Answer 1

High capital
lack of investor interest
Limited access to capital
Stringent requirements

Question 2

This can be a significant challenge for companies seeking to raise funds as it can restrict their
ability to finance growth and operations.

Answer 2

limited access to capital

Question 3

This can occur for various reasons, such as a lack of understanding of the company’s business
model.

Answer 3

lack of investor interest

Question 4

This is defined to be strict, tough, or rigorous

Answer 4

stringent

Question 5

A trader’s investment capital is the portion of their financial resources that they have available for _______

Answer 5

trading

Question 6

This type of funding primarily come from family and friends

Answer 6

love money

Question 7

Because investing is only one of many ways to generate wealth with capital, investment capital is
frequently only a portion of a trader’s ________ resource

Answer 7

total capital

Question 8

Capital can be used to fund business expansion, such as opening new locations, developing new
products, or hiring additional staff.

Answer 8

financing growth

Question 9

Raising capital can provide a business with the cash flow it needs to cover its expenses, pay its
employees, and invest in new projects.

Answer 9

increasing cash flow

Question 10

When a business has a strong balance sheet with a** healthy cash position**, it can improve its
creditworthiness and access to credit in the future.

Answer 10

improving creditworthiness

Question 11

Capital can be used to invest in new technologies, equipment, and infrastructure that can help a
business stay competitive and efficient

Answer 11

investing in technology

Question 12

Capital can be used to acquire other businesses, which can help a business expand its market share,
diversify its offerings, and gain access to new customers and markets

Answer 12

acquiring other businesses

Question 13

is an essential component of raising capital, as investors and lenders typically
require a comprehensive plan to evaluate the viability of a business and the potential return on
investment

Answer 13

business plan preparation

Question 14

When identifying potential investors, it’s important to conduct due diligence and ensure that the
investors are a good fit for your business

Answer 14

identifying the potential investors

Question 15

_ is an important part of raising capital, as investors and lenders will want to know
what the business is worth before making an investment.

Answer 15

valuing the business

Question 16

It provides
access to the necessary funds,
validation of the business idea,
expertise and connections,
credibility, and
potential for future funding.

Answer 16

pitching to investors

Question 17

Set clear objectives and priorities for the deal before beginning negotiations

Answer 17

negotiating and closing the deal

Question 18

Business Plan preparation is the ___ step for raising capital.

Answer 18

first

Question 19

Pitching to Investors is the ___ step for raising capital.

Answer 19

fourth

Question 20

Negotiating and closing the deal is the ___ step for raising capital

Answer 20

fifth

Question 21

Valuing the business is the ___ step for raising capital.

Answer 21

second

Question 22

Identifying potential investors is the ___ step for raising capital

Answer 22

third

Question 23

steps for raising capital

Answer 23

Business Plan preparation
Valuing the business
Identifying potential investor
Pitching to investor
Negotiating and closing the deals

Question 24

. It refers to the process of obtaining fund for your business

Answer 24

Raising capital

Question 25

According to him, capital is like an **oxygen to a business**

Answer 25

Fred Wilson

Question 26

It is a **critical component** of **running a business from day to day** and **financing its future growth.**

Answer 26

Capital

Question 27

It accounts for the **cash and cash equivalents** that a business possesses, such as the **funds in a business’s bank account** as well as **accounts receivable**

Answer 27

Financing capital

Question 28

It refers to the **employees and contractors** that businesses use to facilitate services, the **process** of production, **administration**, and **daily business operations** so that the **business can function.**

Answer 28

Human capital

Question 29

It **qualifies as capital** because the business **can use these assets to generate more profit**. Examples are **trademarks and patents**

Answer 29

intellectual property

Question 30

These are any **assets** that a business uses to **facilitate production**.

Answer 30

physical capital

Question 31

Any **buildings**, such as offices, warehouses, factories, and retail stores, that the **business owns qualify as capital.**

Answer 31

Real estate

Question 32

These are **capital stocks** that **public or private investors purchase** provide the business with **finances to invest back into the company**

Answer 32

securities

Question 33

Financial capital is also referred as _____________

Answer 33

investment capital

Question 34

It is sometimes called as **risk capital**

Answer 34

equity capital

Question 35

Consider the **potential ramifications and consequences** on *personal relationships* before using this **source of capital.**

Answer 35

family and friends

Question 36

There are people who have the **knowledge and financial ability** to assume the **risks that come with investing in a business**

Answer 36

accredited investor

Question 37

It offers the **company’s securities** to a *number* of **potential investors in exchange for financing.**

Answer 37

equity crowdfunding

Question 38

These **programs** are offered by some communities and universities **to offer new entrepreneurs a small amount of seed capital** and a **wealth of additional support.**

Answer 38

accelerators

Question 39

This is a **high-net-worth individual** who provides **financial backing for small startups or entrepreneurs**

Answer 39

angel investors

Question 40

It is a **private equity investor** that **provides capital to companies with high growth potential** in exchange for an **equity stake**

Answer 40

venture capitalist

Question 41

It represents the **financing** that entrepreneurs **borrow and must repay with interest**

Answer 41

debt capital

Question 42

It **provides** the **greatest number and variety of loans** to small companies but prefer to lend to **established small businesses rather than to high-risk start-ups**

Answer 42

commercial banks

Question 43

These are those that are **intended to be less than one year** the most common type of **commercial loan banks make to small companies**

Answer 43

short term loands

Question 44

It allows you to **borrow against your home’s value**, minus the amount of any outstanding **mortgages** on the property

Answer 44

home equity loan

Question 45

These types of **loans** are normally **secured by collateral** and are **extended for one year or longer.**

Answer 45

intermediate and long term

Question 46

The **government** helps provide **additional funding to local businesses**

Answer 46

government loan

Question 47

It is a type of **capital** that **sits between senior debt and equity** in a company's capital structure

Answer 47

mezzanine capital or mezzanine financing

Question 48

An ________________ is a method of raising equity capital in which a **company sells shares of its stock** to the public for the **first time.**

Answer 48

Initial Public Offering (IPO)

Question 49

Banks define ________ as **business or personal property** that you **put up to guarantee the repayment of a loan.**

Answer 49

collateral

Question 50

This document is a **written promise** stating that you, as the business owner, will **repay your small business loan using your personal assets** if your **business can’t pay its loan balance**

Answer 50

personal guarantee

Question 51

For you to qualify for this type of loan, you have to be an **active member of the government agency** you’re seeking to get the loan from

Answer 51

government loan

Question 52

It is a type of **inventory financing** for **large ticket retail items**

Answer 52

floor planning

Question 53

It is an **effective method of raising large amounts of capital** but can be **expensive** and **timeconsuming** with regulatory nightmares.

Answer 53

Initial public offering (IPO)

Question 54

They generally **provide more favorable terms compared to other types of investors**.

Answer 54

angel investor

Question 55

6 main types of capital

Answer 55

FHIPRS financial capital human capital intellectual property physical capital real estate securities

Question 56

important reminders in preparing a business plan.

Answer 56

clearly **articulate requirements** Clear **exit strategy** Credible **financial model** Highlight **competitive advantage**

Question 57

reasons of doing raising capital

Answer 57

67. **Acquiring** other businesses 68. **Financing growth ** 69. Improving **creditworthiness** 70. Increasing **cashflow** 71. Investing in **technology**

Question 58

**High capital levels** can lead to a **dilution of existing shareholder’s ownership**

Answer 58

true

Question 59

Having **too much capital** may **not create a lack of focus** as the company may become **complacent and may not lose sight of its goals**

Answer 59

False

Question 60

**Regulatory requirements** such as disclosure obligations are **not time consuming to comply with.**

Answer 60

false

Question 61

Business Plan preparation is the 2nd step for raising capital.

Answer 61

false

Question 62

Pitching to Investors is the 4th step for raising capital.

Answer 62

true

Question 63

Negotiating and closing the deal is the 5th step for raising capital

Answer 63

true

Question 64

Valuing the business is the 1st step for raising capital.

Answer 64

false

Question 65

Identifying potential investors is the 3rd step for raising capital

Answer 65

true