RAISING CAPITAL

Question 1

Raising funds/resource generation refers to the process of gathering capital or financial resources from various sources to support a specific project, venture, or organization.Raising Capital

Answer 1

Raising Capital

Question 2

involves reaching out to potential investors, donors, or lenders to secure the necessary funds required to achieve the company’s goals.

Answer 2

Raising Capital

Question 3

Importance of Raising Funds/Resource Generation (6)

Answer 3

-Starting and Sustaining Businesses
-Expanding Existing Operations
-Funding Innovation and Development
-Nonprofit and Charitable Organizations
-Mitigating Financial Risks
-Collaboration and Partnership

Question 3

refers to the financial assets or funds available to an entrepreneur or a business.

Answer 3

Capital

Question 4

encompass a broader range of assets beyond just financial capital.

Answer 4

Resources

Question 5

Types of Resources (6)

Answer 5

-Human Resources
-Physical Resources
-Intellectual Property
-Network & Relationships
-Knowledge
-Reputation

Question 6

Identifying Funding Needs (3)

Answer 6

-Prepare a Budget
-Estimate Cash Flow
-Analyze your Plan

Question 6

Importance of Identifying and Utilizing the Right Mix of Capital and Resources (5)

Answer 6

-Efficiency and Productivity
-Cost Optimization
-Competitive Advantage
-Innovation and Growth
-Risk Management

Question 7

is usually needed for acquiring new equipment, Research & Development, cash flow enhancement, and company expansion.

Answer 7

Long Term Financing

Question 8

Some of the major methods for long-term financing are Equity Financing and Corporate Bond.

Answer 8

Long Term Financing

Question 9

is a very important part of every business. Firms often need financing to pay for their assets, equipment, and other important items.

Answer 9

Short Term Financing

Question 10

____________ with a time duration of up to one year is used to help corporations increase inventory orders, payrolls, and daily supplies.

Answer 10

Short Term Financing

Question 11

refers to the process of starting a company with only personal savings, including borrowed or invested funds from family or friends, as well as income from initial sales.

Answer 11

Bootstrapping

Question 12

self-funding

Answer 12

Bootstrapping

Question 13

Pros of Bootstrapping

Answer 13

-Full ownership
-Greater control
-Limited Debt

Question 14

Cons of Bootstrapping

Answer 14

-Financial Risk
-Less Credibility
-Slower Growth

Question 15

is the act of raising capital by borrowing money from a lender or a bank, to be repaid at a future date.

Answer 15

Debt Financing

Question 16

also includes peer-to-peer lending, lines of credit, and government-subsidized loans.

Answer 16

Debt Financing

Question 17

Pros of Debt Financing

Answer 17

-Retain Control
-Tax Deductions

Question 18

Cons of Debt Financing

Answer 18

-Qualification Requirements
-Discipline
-Collateral

Question 19

refers to the sale of company shares in order to raise capital. Investors who purchase the shares are also purchasing ownership rights to the company.

Answer 19

Equity Financing

Question 19

can refer to the sale of all equity instruments, such as common stock, preferred shares, share warrants, etc.

Answer 19

Equity Financing

Question 20

types of Equity Financing (3)

Answer 20

-Angel Investors
-Venture Capital
-Initial Public Offerings (IPOs)

Question 21

is money that’s given to your business by the government. Grants are essentially free money – you don’t have to pay them back. Their aim is to give businesses a helping hand.

Answer 21

Government Grants

Question 22

Government grants do not need to be repaid, unlike loans or equity investments.

Answer 22

Non-repayable funds

Question 23

Involve forming alliances with other businesses or organizations to achieve common goals.

Answer 23

Strategic Partnerships and Collaborations

Question 24

Benefits (3) (Strategic Partnerships and Collaborations)

Answer 24

-Enhances market reach and fosters innovation. -Reduces risks. -Provides access to new markets.

Question 25

refers to the exchange of goods or services without the use of money. It involves a direct trade between two parties, where each party offers something of value to the other.

Answer 25

Bartering and Trade Agreements

Question 26

Benefits(3) (Bartering and Trade Agreements)

Answer 26

-Minimizes monetary expenses. -Increases flexibility. -Build relationships.

Question 27

refers to a labor market characterized by short-term contracts and freelance work, where individuals are hired on a project-by-project basis.

Answer 27

Leveraging the Gig Economy and Freelancers

Question 28

is a method of raising funds by soliciting small contributions from a large number of people, typically through online platforms.

Answer 28

Crowdfunding

Question 29

on the other hand, involves obtaining ideas, services, or contributions from a large group.

Answer 29

Crowdsourcing

Question 30

Benefits (3) (Crowdfunding and Crowdsourcing)

Answer 30

-Provides access to capital for early-stage ventures. -Validates market demand and builds a loyal customer base. -Engages a large community for idea generation, services, and contributions.

Question 31

SMART

Answer 31

-Specific -Measurable -Achievable -Relevant -Time-bound

Question 32

Building Investor Relationships(3)

Answer 32

-Networking and attending industry events -Engaging in investor pitch sessions and meetings -Nurturing long-term investor relationships

Question 32

Importance of Having Good Relationship with Investors (5)

Answer 32

-Access to resources and expertise -Increased credibility -Better decision-making -Long-term support -Increased funding opportunities

Question 33

These are good ways to build relationships with investors as these events are often utilized by investors to scout entrepreneurs with potentially profitable ideas.

Answer 33

Networking and Attending Industry Events

Question 34

Gatherings where a specific group of people get together and share ideas from a certain field.

Answer 34

Industry Specific Seminars

Question 35

These events allow companies and independent entrepreneurs to showcase their ideas and products to get the attention of possible investors. Likewise, investors make use of these opportunities to engage in a profitable deal.

Answer 35

Conferences

Question 36

are basically one-on-one meetings with an investor where you propose a business idea with the goal being to make the investor interested in investing in your idea.

Answer 36

Engaging in Investor Pitch Sessions and Meetings

Question 37

Types of Networking Events(3)

Answer 37

-Industry Specific Seminars -Conferences -Engaging in Investor Pitch Sessions and Meetings

Question 37

Steps in Preparing for a Pitch Session(5)

Answer 37

-Research the audience -Get your pitch ready -Focus exclusively on the important points -Prepare to deliver pitch clearly -Prepare follow-up materials

Question 37

The following steps are recommended for establishing robust financial controls and systems:

Answer 37

-Clear Financial Policies -Segregation of Duties -Internal Auditing -Documented Processes

Question 38

Develop and communicate comprehensive financial policies that outline procedures for expenditure, reimbursement, budgeting, and financial reporting.

Answer 38

Clear Financial Policies

Question 39

Separate financial responsibilities among different individuals to ensure checks and balances and minimize the risk of internal fraud.

Answer 39

Segregation of Duties

Question 40

Implement regular internal audits to identify any financial discrepancies, evaluate compliance with policies, and provide recommendations for improvement.

Answer 40

Internal Auditing

Question 41

Create and maintain detailed documentation of financial processes and procedures to ensure consistency and transparency.

Answer 41

Documented Processes

Question 42

The following strategies can aid in tracking and managing cash flow effectively:

Answer 42

-Cash Flow Forecasting -Receivables and Payables Management -Expense Control

Question 43

Develop a cash flow forecast by analyzing historical data and future projections. This helps anticipate potential cash shortages or surpluses and allows for proactive decision-making.

Answer 43

Cash Flow Forecasting

Question 44

Implement strategies to optimize the collection of accounts receivable and manage accounts payable efficiently. This may involve offering discounts for early payments, negotiating favorable terms with suppliers, and monitoring payment timelines closely.

Answer 44

Receivables and Payables Management

Question 45

Regularly review and analyze expenses to identify cost-saving opportunities and eliminate unnecessary expenditures. This includes negotiating better deals with vendors, exploring alternative suppliers, and implementing cost-cutting measures without compromising quality.

Answer 45

Expense Control