Business Funding Flashcard

Front

What is the primary purpose of a business plan when seeking funding?

Back

To provide detailed information about the business to potential investors

Front

Which of the following is an example of equity financing? Taking out a small business loan, Using personal savings to start the business, Selling shares of your company to investors, Applying for a government grant

Back

Selling shares of your company to investors

Front

What is the main disadvantage of using personal savings to fund your venture?

Back

It can put your personal finances at risk

Front

What does "bootstrapping" refer to in funding a business?

Back

Using personal resources and internal cash flow to fund operations

Front

Which of the following is NOT a characteristic of a venture capitalist?
They typically invest in high-growth potential startups,
They require partial ownership in the business,
They provide mentorship and industry connections,
They offer interest-free loans to entrepreneurs

Back

They offer interest-free loans to entrepreneurs

Front

What is the main advantage of crowdfunding as a funding method?

Back

It provides access to a wide audience without giving up equity

Front

Which of the following is a potential drawback of taking on debt financing?
- Losing ownership of the business
- Paying regular interest payments regardless of profit
- Lack of accountability to lenders
- Limited access to industry expertise

Back

Paying regular interest payments regardless of profit

Front

What type of funding involves borrowing money from a bank or financial institution and repaying it over time with interest?

Back

Debt financing

Front

What is the term for funds provided by friends and family to support a new business?

Back

Love money

Front

Which funding option is most likely to involve giving up a portion of ownership in the business? Options: Small business loan, Angel investment, Government grant, Crowdfunding

Back

Angel investment