Seminar Final Study Guide

* Company culture-Distinctive, unwritten, informal code of conduct that governs the behavior, attitudes, relationships, and style of an organization.

“The way we do things around here.”

* Exit Strategy- LBO and ESOP- LBO: managers and/or employees borrow money from a financial institution and pay the owner the total agreed on price at closing; then they use the cash generate from the company’s operations to pay off the debt. The drawback of this is that it creates a highly leverage business. High levels of debt.

ESOP: Employees and/or managers (future owners) purchase the business gradually freeing up enough cash to finance the ventures future growth. Employees contribute a portion of their salaries and wages over time toward purchasing shares of the company’s stock from the founder until they own the company outright. This is a long term exit strategy.

* Capital: Fixed, working and Growth-Fixed capital – Capital needed to purchase the business’s permanent or fixed assets.

Working capital – Capital used to meet the needs of day-to-day business operations.

Growth capital – Capital requirements surface when an existing business is expanding or changing its primary direction.

Rather than relying on a single source of funds, entrepreneurs may need to consider piecing together multiple sources of funding, a method known as layered financing

* Equity and debt capital-Equity capital represents the personal investment of the owner(s) in a business. Debt capital represents the financing that a small business owner has secured and must repay with interest.

* Crowd fundingCrowd Funding – Taps the power of social networking as entrepreneurs to post their elevator pitches and proposed investment term on specialized Web site to raise money from people who invest as little as $100.

* Angel investors-Angels – Angels are wealthy individuals, often entrepreneurs themselves, who invest in business start-ups in exchange for an equity stake. They fill a...