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Techno Finals > Raising Capital > Flashcards

Raising Capital Flashcards

1
Q

These are the Challenges in Raising Capital.

A

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

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2
Q

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

A

limited access to capital

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3
Q

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

A

lack of investor interest

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4
Q

This is defined to be strict, tough, or rigorous

A

stringent

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5
Q

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

A

trading

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6
Q

This type of funding primarily come from family and friends

A

love money

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7
Q

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

A

total capital

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8
Q

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

A

financing growth

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9
Q

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

A

increasing cash flow

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10
Q

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.

A

improving creditworthiness

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11
Q

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

A

investing in technology

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12
Q

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

A

acquiring other businesses

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13
Q

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

A

business plan preparation

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14
Q

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

A

identifying the potential investors

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15
Q

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

A

valuing the business

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16
Q

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

A

pitching to investors

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17
Q

Set clear objectives and priorities for the deal before beginning negotiations

A

negotiating and closing the deal

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18
Q

Business Plan preparation is the ___ step for raising capital.

A

first

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19
Q

Pitching to Investors is the ___ step for raising capital.

A

fourth

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20
Q

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

A

fifth

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21
Q

Valuing the business is the ___ step for raising capital.

A

second

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22
Q

Identifying potential investors is the ___ step for raising capital

A

third

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23
Q

steps for raising capital

A

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

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24
Q

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

A

Raising capital

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25
Q

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

A

Fred Wilson

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26
Q

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

A

Capital

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27
Q

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

A

Financing capital

28
Q

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.

A

Human capital

29
Q

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

A

intellectual property

30
Q

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

A

physical capital

31
Q

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

A

Real estate

32
Q

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

A

securities

33
Q

Financial capital is also referred as _____________

A

investment capital

34
Q

It is sometimes called as risk capital

A

equity capital

35
Q

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

A

family and friends

36
Q

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

A

accredited investor

37
Q

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

A

equity crowdfunding

38
Q

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.

A

accelerators

39
Q

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

A

angel investors

40
Q

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

A

venture capitalist

41
Q

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

A

debt capital

42
Q

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

A

commercial banks

43
Q

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

A

short term loands

44
Q

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

A

home equity loan

45
Q

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

A

intermediate and long term

46
Q

The government helps provide additional funding to local businesses

A

government loan

47
Q

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

A

mezzanine capital
or mezzanine financing

48
Q

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

A

Initial Public Offering (IPO)

49
Q

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

A

collateral

50
Q

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

A

personal guarantee

51
Q

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

A

government loan

52
Q

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

A

floor planning

53
Q

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

A

Initial public offering (IPO)

54
Q

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

A

angel investor

55
Q

6 main types of capital

A

FHIPRS

financial capital
human capital
intellectual property
physical capital
real estate
securities

56
Q

important reminders in preparing a business plan.

A

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

57
Q

reasons of doing raising capital

A
  1. Acquiring other businesses
  2. **Financing growth **
  3. Improving creditworthiness
  4. Increasing cashflow
  5. Investing in technology
58
Q

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

A

true

59
Q

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

A

False

60
Q

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

A

false

61
Q

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

A

false

62
Q

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

A

true

63
Q

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

A

true

64
Q

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

A

false

65
Q

Identifying potential investors is the 3rd step for raising capital

A

true

Techno Finals (4 decks)

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