ENTREPRENEURIAL FINANCE
SOURCES OF FUNDING
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
The amount will need to be repaid with interest
|
|
|
The amount available may be limited
|
|
|
It is an expensive form of finance
|
|
|
The entrepreneur may lose control of the business
|
Detailed explanation-1: -One of the main cons of using personal savings to finance a startup is the limited amount of capital available. Most people do not have enough savings to cover the full cost of launching a business, meaning that essential expenses may have to be cut back on or delayed.
Detailed explanation-2: -Business expertise. Aside from the financial backing, obtaining venture capital financing can provide a start-up or young business with a valuable source of guidance and consultation. This can help with a variety of business decisions, including financial management and human resource management.
Detailed explanation-3: -Using your own money can mean taking more time to start your startup but allows you to focus on developing your product or service first. If you do eventually seek outside financing, potential financiers want to see that you are responsible enough to trust with their money.