New Business Venture Essay Example | Topics and Well Written Essays - 750 words

New Business Venture - Essay ExampleIn this case, it is advised to look in for a more structured form of finance rather than unstructured financing option like funds from relatives and friends. This is because structured finance has several advantages which funds from relatives whitethorn not have.2. Decision Making Moreover, just as in the case of Gift Baskets, the fund giver has to be given a say in the decision making and strategic moves of the job. This may similarly result in delay in decision making.3. Partnership When one approaches a relative or friend for investment in the air, it is generally done by an offer of partnership. This means an additional person would be there to shargon the profits of the concern. However, the otherwise funding options do not require this.4. No Expertise The promoters of the tune may be well aware of the industry and the market scenario. However, the relative who contributes to the origin capital as an investment may not have similar expe rtise. This will result in hassles, when some necessary move is to be interpreted in the business and the relative does not agree with it.5. Revelation of Secrets The business happens to be the brain child of the promoters. A partner who can fund your business can as well take up your business idea and start his own business, if the matter is money.Banks are one of the known forms of funding the business financ... Let us now view a couple of structured funding options with their working and risks.Banks are one of the known forms of funding the business finance gap. However, banks are normally considered conservative lenders. One can avail long term loans for premises, machinery, furniture etc. with his choice of payment horizon or absolutely term loans renewed per year for working capital with collateral of stock and book debts. Generally, banks prefer to fund the business on the creditworthiness of the promoters future scope of the business and the value of the collateral. They al so expect secondary collateral in the form of some asset like insurance policies, fixed deposits, land, building etc. Positives property happen to be less expensive Bank credit happens to build up reputation of the businessA choice of variety of loans suiting business requirements. Integration is possible with other financial servicesNo infringement in business decisionsRisksConservative covenants and conditionDelay in sanction of loans written report work and requirement of business paper fulfilling all lawsHigh collateral or mortgageVenture CapitalVenture capitalists look for funding businesses with intimately future prospects and have an aim of having good returns through capital appreciation. This requires a solid and clear business plan with a long term view. However, they would also intend to have certain rights of control over the business. But, it would be right to note that, it would be in the best interest of the business as they are typically intending to make good out o f their investment so as to make the business flourish to give them returns on their investment. The positive side of this inauguration of finance is the good amount of availability and the risk involved is that of