FIN 571 - Week 3 DQ's
DUE THRUSDAY, 200 WORDS PER QUESTION Week #3 Question #1 Chapter 15 Explain what is meant by bootstrapping when raising seed financing and why bootstrapping is important. Describe the role of venture capitalists in the economy and discuss how they reduce their risk when investing in start-up businesses. Find (via the Internet) and discuss a company that used angel funding or venture capital.
QUESTION 2: What is an incubator? How do angel investors and incubators help new startups? Incubators are informal or formal groups formed to help entrepreneurs start and grow profitable businesses. It looks like there are quite a few large companies that have launched incubator programs. Here's an interesting concept from Microsoft. It looks like Microsoft wants to leverage the innovation developed in the incubators that it helps fund. Lardinois, F. 2012. Bing Fund: Microsoft Officially Launches Its New Angel Fund and Incubator Program. AOL, Inc. Retrieved from
QUESTION 3: Lam defines financial bootstrapping as "the use of methods for meeting the need for resources without relying on long term external finance from debt holders." Lam (2010, p. 273) Reference: Wing Lam, (2010) "Funding gap, what funding gap? Financial bootstrapping: Supply, demand and creation of entrepreneurial finance", International Journal of Entrepreneurial Behaviour & Research, Vol. 16 Iss: 4, pp.268 - 295