Case Study on Entrepreneurs

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Date Submitted: 10/10/2012 05:12 PM

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Case Study

1. Experts say that entrepreneurs who need between $100,000 and $3 million often face the greatest obstacles when raising capital for their businesses. Why?

Choosing the right sources of capital for a business can be just as important as choosing the right form of ownership or the right location. It’s a decision that will influence a company for a lifetime, so entrepreneurs must weigh their options carefully before committing to a particular funding source. It’s important that companies in need of capital align themselves with sources that best fit their needs. The success of a company often depends on the success of that relationship. Entrepreneurs should, without a doubt, do their homework before they set out to raise money for their ventures. Understanding which sources of funding are best suited for the various stages of a company’s growth and then taking the time to learn how those sources work is essential to their success.

Entrepreneurs are sometimes surprised at the energy and the time required to raise the capital needed to feed their cash-hungry, growing businesses. The process usually includes lots of promising leads, most of which turn out to be dead ends. Meetings and presentations to lots of potential investors and lenders can take out a lot out of the time needed to manage a growing company. Entrepreneurs also discover that raising capital is an ongoing job.

When first going into a business and bringing your “estimated” capital amount to an investor, bank, etc., they would like to see something that is going to make money in the long run and an outstanding business plan. Investors may think that a business can go in there and ask for this amount of money and there just going to goof off with it. No one is going to just give that huge amount of money away. They want to make sure that it’s for a good cause/use.

The average amount of capital a Startup and Launched company is seeking today is $100,000 for a Profitable company it is...