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Author Topic: How is the capital found?  (Read 3602 times)
mastermold
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April 09, 2017, 04:53:28 PM
 #81

The key is matching the amount of capital and how you raise it to the nature of the business, strategy, potential, and business objectives.

1.  Capital intensive or not

Some businesses need almost no capital. For example, management consulting, graphic arts, bookkeeping, just to name a few. Others need enormous capital: steel manufacture, autos, and many others.

2. Business potential and aspirations

Furthermore, the level of capital for each business is a matter of a mix of potential, objective, ambitions, the nature of the business coupled with the size of the market and potential for growth and potential for investment. there's different potential, and strategies, between different businesses. Some are critical mass businesses that can be huge but have to grow big or won't succeed at all. Some are easier to grow organically. For some, the opportunity is so big that it's a good one to share with investors, keeping less ownership, because the investment can pay back well. For others, it's a great potential business for owner operators, but not for investors.

3. Who and where

And beyond that, what's realistically available depends not just on the nature of the business, its aspirations, but also on who the founders are and where the business is located.

Funding is easier to get in some markets than in others, and different in some markets. Angel investment, for example, is easier in developed countries than in developing countries. Foundation money and NGO money is more important in Africa and Latin America than in the U.S. Funding strategy needs to recognize those differences. The founder in Africa has a lot tougher go than the founder in the U.S., U.K, etc.

Outside investment is much easier to get when founders have already done startups than when it's their first time through. Credible founders have a much easier path to outside investment.

Friends and family investment is much more available to those who have friends and family with means than those who don't.

Bank loans are available to people who have assets to pledge, and not to people who don't.

Therefore:

As I said in my first sentence, the best way to find financial capital when starting a business is the way that matches the business, its potential, and its founders.
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April 10, 2017, 01:54:37 AM
 #82

where its economy forward in a big city it was where the capital funds transfer will occur the capital, seeking new capital should be the city that is not a need for state funds and it gives a good thing for the country.

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April 10, 2017, 03:11:15 AM
 #83

where its economy forward in a big city it was where the capital funds transfer will occur the capital, seeking new capital should be the city that is not a need for state funds and it gives a good thing for the country.



When we talk about capital we are talking about money, resources, manpower and time. If we have money it is easy to do business since everything in business rotates around money. If you don’t have money but you have resources such as a piece of land you can just make a loan from the bank or sell some of your resources so you may have the money you need to start a project or business. If you don’t have money and resources but if you have skills then you can work and earn some money until such time that you can save enough amount to start a business.
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May 03, 2017, 03:57:38 PM
 #84

The main question of poor people in the era of capitalism, where the poor are getting poorer and the rich are getting richer.
Usually when I ask a young owner how did he get it he says parents paid for it or he took over a family business.

-marry into a rich family
-inherit money
-befriend someone rich and borrow money
-take a loan in a bank
-rob a bank  Grin
-work like a mule eat cheap crap and save money

Hope the guide will prove useful Wink

Dam that is a great short guide for this question. Look at it, it covers all your answers.  Grin
Well, genuinely business needs capital according to what kind of model you want set up. But even though you think of smallest business it will need some amount of capital that can be taken from friends and family or may be bank loans. I would go with bank loans so that I won't trouble my family and also I will have long term period to pay back the amount.

Well this is typical way of starting up the business. I don't think there us anything difficult in that as long as you are sure about your business and seriousness particularly.

 
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May 03, 2017, 04:36:40 PM
 #85

If you have a great idea, the money will come. You can go get a loan from the bank, though that would be a bit hard depending on how much you need. You can use your credit card too. Also, if you have things or service you can sell, then sell them to raise capital.

If trying to get money by yourself ain't working out well, you really might have to ask others. Give your best pitch and ask away. Go ask family and friends. Or you can try fundraisers, have it crowdfunded and/or ask for donations. Or you can offer people shares in the business you're starting and then just buy them out later.
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May 03, 2017, 04:44:22 PM
 #86

If you don't have initial capital to start your business/investment, I think the best idea is to look for someone who can lend money to you. I say this because if you take money from bank, the fees and interest to pay will be more expensive, and you will take more time to achieve profit. Banks fees are terrible and worthless for borrowers. Take money from someone trustworthy and pay him later.

 
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May 03, 2017, 04:47:47 PM
 #87

Why do you want the money? I think this is important.I have many friends who want to withdraw from the bank loan and do business.But many failed.
If you really need money to do a job with your talent, I think you'll have to work a little bit to get started.This event is solved with some luck afterwards.do not forget this . Everything is not money.





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May 04, 2017, 05:20:11 AM
 #88

If you don't have initial capital to start your business/investment, I think the best idea is to look for someone who can lend money to you. I say this because if you take money from bank, the fees and interest to pay will be more expensive, and you will take more time to achieve profit. Banks fees are terrible and worthless for borrowers. Take money from someone trustworthy and pay him later.

The inability to pay for such loan from your friend will destroy your reputation. The banks don't care if you're able to pay or not because they can simply talk you out to let them sell your collateral. It's even better if you take a loan from the banks because they are going to analyze your business plan whilst borrowing from your friend will just require nothing but trust. Many business people ask from the bank for loans because it's way better. There would be no friend spreading rumours/BS about you, no friend asking about the loan constantly, and the banks pretty much don't bother you unless you don't pay them for a while.

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May 04, 2017, 03:07:56 PM
 #89

If you don't have initial capital to start your business/investment, I think the best idea is to look for someone who can lend money to you. I say this because if you take money from bank, the fees and interest to pay will be more expensive, and you will take more time to achieve profit. Banks fees are terrible and worthless for borrowers. Take money from someone trustworthy and pay him later.

The inability to pay for such loan from your friend will destroy your reputation. The banks don't care if you're able to pay or not because they can simply talk you out to let them sell your collateral. It's even better if you take a loan from the banks because they are going to analyze your business plan whilst borrowing from your friend will just require nothing but trust. Many business people ask from the bank for loans because it's way better. There would be no friend spreading rumours/BS about you, no friend asking about the loan constantly, and the banks pretty much don't bother you unless you don't pay them for a while.

I think this is why when borrowing from friends it's better if you borrow from a lot of them so that you only take a small amount from each of them. If it's something that they can afford to lose anyway, maybe there wouldn't be much bad blood between the two. I'd prefer announcing to family and friends that I'm up to something, it might fail and that they can pitch in with whatever amount they want to to help out.

For banks I heard it's always better that you also have savings about the same amount as you are borrowing. At first I thought it was ridiculous but then again if the business bombed you can use the savings to pay the debt and you still have a good record with the bank and so would be able to ask for loan again in the future
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