RO67 - 5.2 - Source(s) of capital for business start-ups and exp

Which source of capital involves a large group of people investing in your business for a share of the profits?

• Bank loans
• Crowdfunding
• Business angels
• Small business grants

What is the main advantage of using your own savings to start a business?

• You can get a larger sum of money
• You don't have to pay interest
• You can get advice from experienced investors
• You don't need to provide collateral

What is a potential disadvantage of getting a loan from a bank?

• Sharing profits with investors
• Providing collateral
• Losing your savings if the business fails
• Convincing a large group to invest

What is one advantage of crowdfunding?

• High risk for individual investors
• No need to convince people to invest
• Low risk for individual investors
• Large portion of profits for owner

Why might someone choose a small business grant?

• No need to repay the money
• High interest rates
• Easy to obtain
• Large sums of money

What is a potential downside of using personal savings?

• High interest rates
• Losing your savings if the business fails
• Need for collateral
• Convincing investors

How can business angels benefit a startup?

• By providing small amounts of money
• By offering significant funding and advice
• By requiring no share of profits
• By being easy to find

What is a key characteristic of a bank loan?

• No need for good credit history
• No interest charges
• Requires collateral
• No need for repayment

Why might friends and family be a good source of capital?

• High interest rates
• Lenient repayment terms
• No risk of awkwardness
• Large sums of money

What is a disadvantage of crowdfunding?

• High risk for individual investors
• Small portion of profits for owner
• No need to convince people to invest
• High interest rates