Explore BrainMass

Sources of Financing for a growth stage firm

Can you guide me on this short assignment? Include any references.

All small business owners find themselves looking for small business funding at one point or another. In this simulation you are preparing to seek funding from venture capitalist, but there are many other sources of funding to consider. The small business owner must determine how these sources marry with company vision, mission and values, and weigh the advantages and disadvantages of each funding source. For this discussion question you will conduct research on these funding sources and:

1.Present a high level overview of at least 4 types of sources.

2.Select the top 2 sources that you think would be a best fit for the growth stage of your business.

3.Discuss how you would identify specific companies/individuals within these 2 choices to find one that is the most compatible with your organizations values.

4.Cite one example of a company that has achieved this goal

© BrainMass Inc. brainmass.com August 18, 2018, 3:56 pm ad1c9bdddf

Solution Preview

The first source of financing for this growth stage firm would be individual high net worth individuals. The firm can raise equity capital from high net worth individuals by diluting owner's equity. The main advantage is that the equity capital will not invite any fixed interest rate payment and would be available for a long period of time. However, the investor may require seat on the board and participation in day to day management of the organization. Further, the investor would like to exit the firm with a good profit. Hence, the firm would need to evaluate the pros and cons of this type of funding.

Similarly, the firm can raise equity capital from institutional ...

Solution Summary

Discusses source of financing for a growth stage firm.