(BQ) Part 2 book "Effective small business management - An entrepreneurial approach" has contents: Putting the business plan to work - sources of funds, location and layout; managing people - a company’s most valuable resource; legal aspects of small business - succession, ethics, and government regulation. | SECTION FIVE ̈ Putting the Business Plan to Work: Sources of Funds CHAPTER FOURTEEN Sources of Equity Financing Learning Objectives Upon completion of this chapter, you will be able to: All it takes to start a company is one hundred thousand dollars . . . and no “sense.” 1 Explain the differences among the three types of capital small businesses require: fixed, working, and growth. 2 Describe the various sources of equity capital available to entrepreneurs, including personal savings, friends and relatives, angels, partners, corporations, venture capital, and public stock offerings. 3 Describe the process of “going public,” as well as its advantages and disadvantages. 4 Explain the various simplified registrations, exemptions from registration, and other alternatives available to entrepreneurs who want to sell shares of equity to investors. —Guy Jones, founder of River Runner Outdoor Center The key for entrepreneurs is to find investors who are going to add value to the company as it goes along. —Rod Nelson 451 452 SECTION 5 • PUTTING THE BUSINESS PLAN TO WORK: SOURCES OF FUNDS Raising the money to launch a new business venture has always been a challenge for entrepreneurs. Capital markets rise and fall with the stock market, overall economic conditions, and investors’ fortunes. These swells and troughs in the availability of capital make the search for financing look like a wild roller-coaster ride. Entrepreneurs, especially those in less glamorous industries or those just starting out, soon discover the difficulty of finding outside sources of financing. Many banks shy away from making loans to start-ups, venture capitalists are looking for ever-larger deals, private investors have grown cautious, and a public stock offering remains a viable option for only a handful of promising companies with good track records and fastgrowth futures. The result has been a credit crunch for entrepreneurs looking for small to moderate amounts of start-up capital. .
