CAPITAL RAISING STRATEGIES

Why do startups and small businesses often use self-funding as a capital-raising strategy?

• To maximize external investment and attract more investors.

• To relinquish control over their business operations.

• To avoid taking on debt and maintain full control over their business.

• To ensure a faster growth rate through external funding.

What is one of the primary advantages of using a business loan as a capital-raising strategy?

• The loan is interest-free.

• It provides quick access to capital.

• You don't have to repay the borrowed amount.

• It grants you partial ownership of the lender's business.

The cost of capital for a firm – when we allow for taxes, bankruptcy, and agency costs

• Remains constant with increasing levels of financial leverage

• First declines and then ultimately rises with increasing levels of financing leverage

• Increases with increasing levels of financial leverage

• Decrease with increasing levels of financial leverage

What is the second Step in Venture capital's investment process?

• Identify potential company projects to invest capital

• Identify potential company projects and participate in consulting to promote the direction

• Identify potential company projects to invest capital and divestment

• Participate in consulting to promote the direction and growth direction of the business

1. When do private equity firms buy companies and overhaul them to earn a profit?

• When the business is sold again

• When the business just open

• When the business has a good project

• When the business finished a project

What is the conclusion for crowdfunding?

• Difficult to sell products

• Convenient to centralize and streamline fundraising

• Get feedback from customer

• Easy raise money

What is an angel investor?

• A person who has resources to invest in a new start-up

• A person who makes a donation to a start-up business

• A person who anonymously makes a contribution to a good cause

• A person who invests in high-profile, existing businesses

Which one of these are private equity specialty?

• Distressed investing, specializing in struggling companies with no critical financing needs

• Growth equity, funding expanding companies below their startup phase

• Sector specialists, with some private equity firms focusing solely on technology or energy deals, for example

• Primary buyouts, involving the sale of a company owned by one private equity firm to another such firm

The term “ capital structure” refers to

• Current assets and current liability

• Total assets minus liabilities

• Shareholders’ equity

• Long-term debt, preferred stock, and common stock equity

What is one of the significant downsides of using a business loan as a capital-raising strategy?

• It doesn't require repayment.

• The loan is always interest-free.

• It grants you full ownership of the lender's business.

• It creates a debt obligation.