ENTREPRENEURIAL FINANCE
SOURCES OF FUNDING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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They require something in return for their investment
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They charge interest on money invested in the buisness
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They become part-owners of the business
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They are incredibly wealthy
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Detailed explanation-1: -With donation-based funding, contributors give money without receiving anything in return. In equity funding, backers get shares of the business. For debt-based funding, donors are repaid with interest. With reward-based funding, contributors receive tokens, products or services in return for their donations.
Detailed explanation-2: -What is the average ROI for angel investors? The average ROI for angel investors is 27% within 5 to 7 years. However, it is important to keep in mind that angel investing is a high-risk, high-reward venture. While some angel investors may see returns of 10x or more, others may end up losing all of their investment.
Detailed explanation-3: -Bringing angel investors on board can be a time-consuming process because it typically involves pitching your startup’s concept multiple times. Crowdfunding platforms, on the other hand, streamline the process by allowing startups to post their pitch in one spot where it can be viewed by a broad range of investors.