Funding For New Firm Essay

877 words - 4 pages

There are several ways a business can obtain needed financing. One way is to get loans from banks or investors. Another is to sell partial ownership in the company in the form of stocks. While yet another ways is to license the use of a product or technology. A management decision needs to be made as to which form of financing best suits the firm and product. Once the decision is made the possible pros and cons should be analyzed as well as alterative to the chosen financial decision. Funding being the most important and necessary part of starting a new business, the use of financial management is imperative. An investment banker would be very beneficial in the planning of our firms financial growth and sustainability.
Funding for New Firm
A management decision concerning how to fund our new firm needs to be made. We will first be going through some key financial terms and giving definitions and descriptions of the particular term. We will then identify our preferred source of funding based off of the information available. A description for why a particular form of funding will be supplied. We will go through all the pros and cons of the funding choice we will be going with. Finally, an alternant source of funding will also be identified.
Let us first identify the term investment banker. This individual can be of great importance to the new firm, particularly after the transition from a partnership to a corporation. The investment banker will handles the selling of our company stock and offer financial strategies as our company grows. The investment banker will help develop financial plans and most importantly, be instrumental in implementing them.(The Princeton Review, n.d.)
The second term we must identify is a stock market also known as a stock exchange. A stock market is a supermarket of sorts for publicly traded company stocks. This is where our company stocks will be bought and sold once our firm becomes a corporation. The investment banker will be helping to facilitate the selling and buying of stocks by way of the stock market.(Marshall, 2000)
The third term is financial management. Financial Management is the planning for the future of a business to ensure positive cash flow. This also includes the managing and maintenance of financial assets. The primary concern of financial management is the assessment of risk rather than the techniques of financial quantification. Financial Management is a key necessity for all business and ours will be no exception.(Economy Watch, n.d.)
The fourth and final term is risk financing. Risk Financing is a process to determine the strategy that creates an optimal balance between retaining and...

Find Another Essay On Funding for New Firm

Research and Development and Financial Performance of UK Manufacturing Firms

1168 words - 5 pages rewards. Furthermore, even if Research and Development does its job, this will be worthless if the manufacturing firm has too specialised equipment, which is unable to be flexible enough to change to creating this new product or process. With a manufacturing firm, and almost all companies there is a balance needed between, quality, price, and costs. If for example Research and Development produced a higher quality

Business Strategy for the Biotech Field

1433 words - 6 pages financial growth, innovative outcomes, and number of firms entering the industry, biotechnology remains a capital-intensive and risky manufacturing partly because of market uncertainties and complex regulatory regimes. Given its knowledge intensive character, biotechnology is also a fertile ground for entrepreneurial activities including firm creation. In such an environment characterized by high risk and rewards coupled with the potent role of

gainsboro

1656 words - 7 pages expectations while transitioning into a growth firm. A 20% dividend will help to restore shareholder confidence in the firm by underscoring management's optimism for higher future cash flows. Unlike a 40% payout, a 20% dividend will allow Gainesboro to use more retained earnings to undertake innovative, positive net present value projects to create value in the future, as part of their new direction. Gainesboro will also fall within the limits of their

What´s Internet Crowdfunding

1187 words - 5 pages Individual case assignment We discuss about Crowdfunding, internet crowdfunding, process to get funding on internet, models of crowd funding, project that succeed greatly, advantages and disadvantages. Crowd funding, Crowd sourcing, Peer to Peer funding and so on have many names but only one definition that is rising expenditure for a project which may be creating or producing a movie, song, new invention, product or an idea from many people in

Business finance is concerned with the investment and financing decision of firms. All investment must be financed

3784 words - 15 pages profit.Leasing and Hire PurchaseLeasing involves business renting equipment that it may use for several years or months but never own. It will have a contract with a firm who may come in to repair and service the product. The deal may also involve the product being replaced with a new model every so often. Firm often lease equipment such as photocopiers.Hire purchase involves paying for equipment in installments. Firm will not own the item until all the

Ken Saro Wiwa vs. Shell and Gbemre vs. Shell Cases

654 words - 3 pages Niger Delta. The firm also order the external independent report to assess its community development program. Not long ago, shell contributes in EITI which Nigeria is a candidate country. In June 2009, as the consequence of the court settlement for the case of Ken Saro Wiwa, shell organise a trust fund for Ogni people and accept to pay a payment of $15.5 for funding the trust. However, the firm maintain an argument for the detachment in the

The Bernie Madoff Scandal

1128 words - 5 pages In 1960, Bernard L. Madoff started a modest penny stock investment firm named “Bernard L. Madoff Investment Securities” in New York City. Madoff's firm made itself unique by using a new computer system to propagate quotes before the NASDAQ existed and this innovation made his firm very successful. Up to now Bernie Madoff was the epitome of successful stockbroking in America. However, Madoff quickly fell victim to the seduction of what his

School Funding in the Modern Era

1775 words - 7 pages maintenance, and last but not least staff funding. “One way to better understand school finance is to think of it in terms of the adequacy and equity of resources. Adequacy is based on the principle that states should provide enough funding for all students to be able to meet academic expectations” (School Funding). The average spending per student in 2008 was 10,0297 and then ranging from as high as 11,572 in New York to as low as 3,886 in Utah (NCES

Childhood Cancer Awareness

1074 words - 5 pages surgery. This isn’t fair to these suffering children. These children that are our country’s future, the children that have their whole lives full of dreams and opportunities ahead of them. So now with childhood cancer on the rise, it’s time for us to be the voice to get these kids more funding to get the new treatments that they desperately need. While the amount of kids getting cancer is rising, the number of new cancer treatments

Critically assess the Pecking Order Theory of Capital Structure

1785 words - 7 pages passed back to the borrower (Moore 1993). Retained earnings depletes the funds used to finance projects the internal funds of the firm, which can be used for dividend payouts to shareholders .Contrarily, the continuous issue of dividends signals to the market that management is not looking to invest retained earnings in new projects to expand the firm (DeAngelo, DeAnggelo, & Stulz , 2006) According to Modigliani and Miller (1963), companies

Overview of Cash Management MBA 503

1696 words - 7 pages Cash management involves controlling the cash flow (cash receipts in and cash payments out) of a firm to minimize nonearning cash balances (Block-Hirt, 2004). According to A Handbook of Management Techniques (2008 ) the purpose of managing cash is to ensure that there is enough cash and working capital for fluctuating needs without tying up funds needed elsewhere or relying too heavily on short-term financing.Cash management requires continuous

Similar Essays

Crowd Funding For A High Risk Fast Growth Business

2561 words - 11 pages Introduction New technological advancement has led to the emergence of many innovations in the field of business. Most often, individuals or groups coming up with these ideas and innovations do not have enough funding of their projects and businesses. Such situations drive them to search for better lending and funding bodies to accomplish the set objectives. They may acquire funding through bank loans, family members, partnership, business

Funding Sources Essay

867 words - 4 pages funding of Oma’s Loving Creations is partnering with an investment firm that has established a similar line but would see growth by adding more products. For example, New Atlantic Investors is a venture capital firm that has a fashion companies within their portfolio (New Atlantic Investors, 2010). One of the companies is called Fashion Playtes and they create designs for clothing that young girls can make to wear (New Atlantic Investors

Gen480: Consulting Firm Overview Essay

1641 words - 7 pages . The first idea is to expand on the knowledge and design of being a Mary Kay Independent Beauty Consultants and finding ways that the firm can become successful. Another brilliant idea is consulting within school districts nation wide for new and improved Educational Programs. As consultants there would be learning strategies, statistics for given areas and mostly selling the idea that from hard work in school doesn't have to be just learning, it

International Business Of Abc Pharmaceutical Firm

2275 words - 9 pages cultural analysis.The importance of cross-cultural analysis is not to be undermined for any firm that plans to expand overseas. To put things into perspective, managers of ABC firm should take the following cultural factors of the European market into serious consideration in their marketing efforts for their new medical products.The factors are religion, language and education, and the country's demographics.8.1 Religion.Religion plays a vital role