| Sources of finance should include: ordinary share capital, loan capital (bank loans, overdrafts only), venture capital and personal sources. Candidates should be aware of the advantages and disadvantages of these in specific contexts. |
Ordinary share capital or equity:
This represents part ownership of a limited company.
Shareholders may receive a dividend on the capital they invest in the business.
Private limited company (ltd) - you must be invited to invest in the business in return for a share of the equity. Think Dragons Den.
Check this out: https://www.bbc.co.uk/programmes/m000kqkc
Apologies for this, but I needed an image here.
A public limited company (plc) can raise vast sums of money through the issue of shares through the stock exchange.
This legal structure would not be appropriate for a small business start up.
The process of changing from a ltd to a plc is known as a 'flotation' or floating on the stock exchange.
Facebook floated on the 'high tech' US stock market called the Nasdaq. Just how rich did Mark Z become? Google it.
Loan capital - do you understand the difference between a bank loan and an overdraft? If you are unsure check here. Or watch this:
Venture capital: this is also known as risk capital. It provides significant investment into small or medium sized businesses.
Apologies for this, but I needed an image here.
This legal structure would not be appropriate for a small business start up.
The process of changing from a ltd to a plc is known as a 'flotation' or floating on the stock exchange.
Facebook floated on the 'high tech' US stock market called the Nasdaq. Just how rich did Mark Z become? Google it.
Loan capital - do you understand the difference between a bank loan and an overdraft? If you are unsure check here. Or watch this:
Venture capital: this is also known as risk capital. It provides significant investment into small or medium sized businesses.
It is generally a investment in return for share capital but may also be in the form of a loan or a combination of the two.
Ali G pitching to a venture capitalist:
Personal sources of finance.
These may include savings, the sale of personal assets or redundancy payments.
Financial aspects of a start up: Innocent Drinks
Click on the picture.
Ali G pitching to a venture capitalist:
Personal sources of finance.
These may include savings, the sale of personal assets or redundancy payments.
Financial aspects of a start up: Innocent Drinks
Click on the picture.
If you're aged 18-30, unemployed or working fewer than 16 hours a week and have a business idea you'd like to explore, The Prince's Trust Enterprise programme could be for you.
Check out this video: https://youtu.be/6op8d3o87LQ
