Tiêu đề ES Unit - 5 upto 3.pdf ✅

FINANCING METHODES FOR ENTREPRENUER ➢ The money required by the entrepreneur to establish & run the enterprise is called funds. ➢ The methods by which the funds are raised is called financing methods. ➢ Hence financing methods are also known as start-up funding. ➢ There are various funding methods for start-up:- ➢ Personal source:- ➢ Many start-up doesn’t raise funds from the third party ,they are funded by the founders & family relative of founders only to prevent the debt & equity dilution. ➢ For this they use their personal savings mainly.
➢Angel investors:- ➢An angel investor is a wealthy person who invests his or her own money in a company— usually a start-up—that is in the early stages of development. ➢Angel investors expect to take ownership positions in the companies they support because their capital is unsecured—they have no claim on the company’s assets. Their ownership may take the form of equity or convertible debt. They also tend to have clear exit strategies for ending involvement with the business. ➢They are known as angels as because they often invest in risky , unestablished, unproven enterprise for which other source of loans are unavailable. ➢Some popular angel investors:- Anupam Mittal Founder & CEO – People Group, Rajan Anandan Managing Director – Sequoia Capital, Girish Mathrubootham CEO – FreshWorks Rohit Bansal Co-founder of Snapdeal, AceVector and Titan Capital
➢ Venture capitalist:- ➢ Venture capital industry have for main players ➢ Entrepreneur that need funds. ➢ Investors that need high return. ➢ Bank who need companies to give loans ➢ Venture capitalist who make market for other three. ➢ Venture capital is a firm that invest people money in start-up enterprise & small business that have believed to have long term growth potential. ➢ They provide large investment as compared to angel investors. ➢ They provides fund to company & become share holder or become partner of the firm. ➢ Accel Partners, Blume Ventures, Kalaari Capital, Nexus Venture are popular venture capital in india.
➢ Debt Financing ➢ Loan from Banks & NBFCs ➢ Banks and Non-Banking Financing Companies(NBFCs) grant loans and become business leaders and not owners, unlike VCs and angels. These loans so procured can be used for various business needs like: ➢ Purchase of inventory and equipment ➢ Operating capital (working capital) ➢ Fund requirement for expansion etc ➢ However, there are several drawbacks of this funding option. The interest on loan has to be paid periodically irrespective of how your business is faring.