Author: angie

Startup capital is the capital that an entrepreneur needs to pay the necessary items needed when starting a business, like business space, equipment, supplies, and employee’s paychecks. Meanwhile, venture capital is the fund that a venture capital (VC) firm or an angel investor would provide to a starting or trouble-laden business. Unlike loans, venture capital is invested in the business rather than being returned. With bank loans, for example, the money borrowed should be returned within a specific period of time along with interests and other fees. But with venture capital, the money is provided in exchange of equity in the business. The venture capital firm would take part in the business, they could have one of their own to be a member of the board of directors. Aside from having a portion of the company, the VC would also have the right in knowing the operation of the business. Their opinions would matter especially when making decisions in the company. VCs rarely concern themselves with the daily operation of the business unless the life of the company or business is being threatened. Aside from this, the VCs’ opinion would also matter and they could prohibit the portfolio company to close down. The difference between a venture capital firm and an angel investor is simple. An angel investor does not operate like a firm and more of a wealthy...

Some people would think that raising the startup capital for a business venture would be the difficult part. Contrary to that, keeping the momentum and maintaining your business running would be the most difficult part of all. Most businesses would fail, not only due to lack of funds, but poor management skills and cash flow. There is no special skill needed when starting a business. You just need to have important skills and attitude that will help you deal with business difficulties and different situations. Discipline Staying focus is very important. Some entrepreneurs would quit after the first time they encounter a problem. It would need self-discipline to see to it that you would carry something that you have started until the end. Determination and Perseverance- this two traits go hand in hand. It would take determination for a person to be able to reach personal and business goals. It would take perseverance to continue even after a rejection or an initial failure. Time management- some entrepreneurs would fail miserably in their time management. But this is a very important skill that should be mastered. These would enable an entrepreneur to carry out and prioritize responsibilities. Knowledge- never enter a business you are clueless about. Of course, you could learn a lot while handling or managing the business. But basic knowledge about the product and services is important to...

The worst case to happen with a business is for it to run out of funds and eventually close down. In a period of economic downturn, less people are spending their hard-earned money which is why businesses are barely thriving from sales. If you are just a new business and you have gotten startup capital from a venture capital firm or banks, the biggest fear is that the funds would not be sufficient enough to subsidize the business needs. Entrepreneur Risks Entrepreneurs, when asking for financial support from venture capital firms, would often base their financial need on the best scenarios. Unfortunately, entrepreneurs are making mistakes of not incorporating or considering the worst cases that could happen with their businesses that would require them to have bigger funds. In short, they lack in preparing a second or backup plan. There are also entrepreneurs who are preparing themselves for the difficulty of raising the startup capital. But actually, that is just the start. More financial risks are could happen when the business are already running. There are different financial risks that could push the business to its edge. There are the credit risks or customers failing to pay, commodity price risk could happen when the prices of raw materials increase. If you are doing international trade or dealing with international customers, the fall or the recovery of the dollar could...