Chapter 18

Startup Financing

• A way to borrow money using existing assets as security

• The misuse of business resources

• The money provided to entrepreneurs for product research and development

• Procedures for managing financial resources

A Venture Capitalist is a professional investor who generally invests in early-stage and emerging companies because of perceived long-term growth potential.

• A traditional bank loan provider

• A professional investor in early-stage companies

• An executive responsible for compliance

• An investor using personal funds for startups

What is equity financing?

• Method of acquiring capital through the sale of shares in exchange for cash.

• Portion of a company's earnings that will be distributed as a dividend to shareholders.

• Method of borrowing funds and paying it back with interest to the lender.

• Method of borrowing funds and paying it back with interest to the lender.

What are preventative internal controls?

• A type of internal control created to prevent errors or fraud from occurring in the first place.

• A type of internal control designed to highlight discrepancies and identify problems after they have occurred.

• A type of internal control that is put in place to correct the errors identified by the detective internal controls to prevent them from occurring.

• Organizing, planning, controlling, and leading the financial activities of a business to ensure the effective acquisition and utilization of financial resources for efficient operations and future growth.

What is seed-stage financing?

• Organizing, planning, controlling, and leading the financial activities of a business.

• Acquiring the money you need to start, operate, or expand a business.

• A type of internal control designed to highlight discrepancies.

• Consists of small or modest amount of capital provided to potential business owners to prove a concept.

What is financial forecasting?

• Estimate of future revenue and expenses for an extended period of time.

• Method of acquiring capital through the sale of shares in exchange for cash.

• Used for businesses that are looking to expand into a different location.

• Involves splitting tasks among multiple people to protect against internal fraud.

What is debt financing?

• Method of acquiring capital through the sale of shares in exchange for cash.

• Way to borrow money or get a loan by using existing assets as security against business loan from a lender.

• Method of borrowing funds and paying it back with interest to the lender.

• Part of the financial plan that outlines what the company will likely earn and spend for an upcoming period of time.

What does financing involve?

• Acquiring the money you need to start, operate, or expand a business.

• Method of acquiring capital through the sale of shares in exchange for cash.

• Method of borrowing funds and paying it back with interest to the lender.

• Involves splitting tasks among multiple people to protect against internal fraud.

What do investing decisions relate to?

• The misuse of business resources.

• The amount of investment available within different opportunities.

• Denying access to parts of an accounting system.

• Distribution of earnings as dividends.

What is a cash flow loan?

• A loan used by small businesses for day-to-day operations.

• A traditional bank loan for business needs.

• A method of borrowing funds and repaying with interest.

• A loan for businesses looking to expand locations.