One of the most difficult problems in the venture creation process is obtaining finance. for the entrepreneur, available financing needs to be considered.
It is one of the most expensive ways to raise capital for business, Bootstrap financing also look good to outside lenders when the time comes to raise money through these routes.
It is a professionally managed pool of equity capital. Venture capital is a least understand concept in entrepreneurship and it is a long term investment discipline. The pool is managed by general partner, with the exchange for a percentage of the gain realized on the investment.
FDI- Foreign Direct Investment
Debt or Equity financing
Debt financing
Obtaining borrowed funds for the company. It is an unsecured INTEREST bearing instrument, it is loan to the company the company will pay fixed percentage of interest. Here some asset be used as acollateral.
Equity financing
Obtaining funds for the company in exchange for ownership.
The company will pay the DIVIDEND to equity share holders, they are the owners of the company. Equity source of finance is not burden to the company, the company will pay the dividend when it get profit, there is no obligation to company in payment of dividend.
Internal or External funds
Internal funds
Internal funds
Internally generated funds can come from several sources within the company: i.e., profits, sale of assets, increase in working capital & accounts receivable. Internal source of funds can be obtained by reducing short-term assets like inventory, cash, & other working capital items.
External funds
External source of financing need to be evaluated on three bases: length time of funds, cost involved & company control lost.
Main source is- self, family, friends, commercial banks, government grants, issuing of shares, bonds, debentures & other financial institutions.
Funding from Banks & Financial Institutions
The company can get the funds or financial assistance from financial institutions which are established for the growth of business such as IDBI, SFCS, SIDCS, RBI, IFCI, SIDBI & other private financial institutions.
The company can get the funds or financial assistance from financial institutions which are established for the growth of business such as IDBI, SFCS, SIDCS, RBI, IFCI, SIDBI & other private financial institutions.
Governmental & Developmental sources
Subsidies will be extended by central and state government to project being established in industrial profile areas.
The government was established the industrial development financial institution to give financial assistance.
Loans from Banks
Commercial Banks are main sources to appreciation of capital. Commercial banks are providing loans under different heads. The funds provided are in the form of debt financing and, as such, require some tangible guaranty or some asset with value.
Commercial Banks are main sources to appreciation of capital. Commercial banks are providing loans under different heads. The funds provided are in the form of debt financing and, as such, require some tangible guaranty or some asset with value.
Private Placement
A final sources of funds for the entrepreneur is private investors, who may be family and friends or wealthy individuals & also a sale of securities to an institutional investors.
Bootstrap financing
One alternative way to acquiring outside capital that should be considered as Bootstrap financing. It is mostly used in start up of new business and new venture creation.
One alternative way to acquiring outside capital that should be considered as Bootstrap financing. It is mostly used in start up of new business and new venture creation.
It is one of the most expensive ways to raise capital for business, Bootstrap financing also look good to outside lenders when the time comes to raise money through these routes.
Venture Capital
It is a long-term funds in equity or semi-equity form to finance for high-tech projects involved in high risk & yet having strong potential of high profitability.
It is a long-term funds in equity or semi-equity form to finance for high-tech projects involved in high risk & yet having strong potential of high profitability.
It is a professionally managed pool of equity capital. Venture capital is a least understand concept in entrepreneurship and it is a long term investment discipline. The pool is managed by general partner, with the exchange for a percentage of the gain realized on the investment.
FDI- Foreign Direct Investment
FDI is defined as, a company from one country making a physical investment into building a factory in another country. Investment made to acquire lasting interest in enterprises operating outside the economy of the investor. The FDI relationship consists of a parent enterprise and a foreign affiliate which together form multinational corporations.
