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Atharva Deshmukh

Stealth • 6m

FUNDING:- Every one at some point in time must have got an idea of becoming a businessman, just like every Indian child wants to become a cricketer. We gather a bunch of ideas and select one out of it as our business. You are confident enough that your business will click but face a typical problem how to and who will fund the idea? The answers are:- 1) Angels:-These are the investors who provide initial money for startup businesses, usually in exchange for ownership equity in the company. Angel money is not a loan but an investment in the business. This initial funding is called The Seed Fund. 2)Venture Capitalists:-The savvy investors who invest in an early stage of business, are called Venture Capitalists(VC), and the money that the business gets at this stage is called Series A funding. The valuation of the business increases once a VC invests.

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Replies (2)

Atharva Deshmukh

Stealth • 6m

3)The Banker:-Whenever a company plans an expenditure to improve the overall business, the expenditure is called Capital Expenditure or CAPEX.CAPEX can be funded through the profits, they can approach a VC to get Series B funding. The company can also approach a bank for a loan. This loan is called Debt. 4)The Private Equity:-Company grows and now plans to expand more. The CAPEX requirement is more than 50 crores. The company has decided on Series C funding. They cannot approach a VC as they cut smaller cheques. Here private Equity typically invests large amounts. PE takes on fewer risks as compared to VCs. 5)IPO:-Initial Public Offering. Every company wants to grow more and more, and does not want to settle in for just this. The company needs more CAPEX, they can get this from earlier profits, raise series D funds from another PE, raise debt from bankers, file for an IPO, or a combination of all the above.

1 replies

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