1. Secure Funding

2. - How to secure financial resources - The steps you must take to determine the funding you need to raise. -Understand the pros and cons of using your. personal money - The pros and cons of raising money from family and friends

3. -why angle investors invest in unknown start-up companies -why privet equity investors invest in small companies -The types of debt financing ; secured and unsecured loans. -The pros and cons of stock financing.

4. **Easy to access (sources of fund): -Your Personal saving. -Your Personal loan. -Your Personal productive assets. -Money from Relative. -Money from friends. **Difficult to access: -Venture Capital firms. -Venture Capital funds. -Private equity firms. -Bank loans.

5. Conception to newborn seed capital Infancy to childhood venture capital Childhood to teenage private equity Teenage to maturity short term bank loans, stock financing Maturity long – term bank loans, bonds

6. First : The more money you can raise at the beginning,the better. Second : The case of early financing,less is better.

7. *Advantages *Disadvantages

8. AdvantagesDisadvantages Permits to surviveMuch money/ may spend it unwisely Flexibility Avoid borrowing from suppliers and banks Security

9. AdvantagesDisadvantages Limited capitalization prevents losses You may give up control/or a piece of the business Keep attentions on principal objectives Keep the value of your business

10. Venture capital firm: a company that channels investments to new venture. Private equity firms: Firms that direct investments into young and promising private companies. the aim is to capture the “high-growth stage” in young companies. Venture capital firm: Money that assembled for the purpose of investing in new venture.

11. What you need??

12. How much money you need to start ??? Convincing the investor Proving your company to the investor What offers you can give paying back the money

13. Private Companies Your SavingGovernment Agencies Your Family Your friends and Colleagues Banks Venture Capitalists Angel investors

14. 1- Personal money. 2- Family. 3- Friends. 4- Angel investor. 5- venture capital.

15. Personal Money Examples Savings Mortgage your home. Buy raw materials using credit card Sell an item of value to raise cash.

16. AdvantagesDisadvantages Easy to manageYou may need more. No need to wait longFamily mat suffer No to convince other peopleHigh risk Simple accounting process You do not owe anybody.

17. Mortgage A loan based on the value of your house or your land. Bankruptcy A declaration that the company is unable to pay back its loans Equity Ownership or part ownership Angel Investor (freelance venture capitalist) A rich individual who invests in early-stage companies in exchange for equity ownership in the business

18. Angel Investor freelance venture capitalist A primary source of capital among early-stage companies. Do not belong to association or trade (like bank or venture capitalist).

19. Equity Capital: public and private Private Equity: late and early stage Venture Capital (early stage): Individual and institutional Angel Investor: Individuals in early- stage venture capital

20. What kind of funding sources in your company ?? Question 2:

21. There are two major types of capital: CharacteristicsType of capital sources of funds They have the legal priority of getting paid a profit-sharing fee, or getting their money back if any thing goes wrong. Bank loansDebt Paid back after the bank fully paid. Loans from investors “subordinate”

22. They have the fixed annual dividend. They don’t have the rights of voting. Preferred sharesEquity The value of the common shares can go up over time. They have the right of voting. Common shareholders are decision makers and members of the board. Common shares

23. * They are not risk taker. They don’t like to lend money to start- up businesses. They classified as the most “impersonal” sources of funds.

24. The pose and cons of financing with common stock : DisadvantagesAdvantages Corporate votingDon’t make dividend payment to stockholders. Shareholders can share in the profits for many years Improves the credit rating. Attractive to some investors.

25. DisadvantagesAdvantages Its like cutting down a newly plan tree. Raise long-term money. Facing bad investors in directing once your company gets started. You don’t have to pay cash dividends every year. TA: Maha Alzailai MGT Department