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Entrepreneurial Finance

This document discusses entrepreneurial finance. It explains that entrepreneurial finance involves understanding resource allocation, funding sources, and cash management for entrepreneurial firms. It also includes evaluating business opportunities from start to later stages and exploring options to create value for stakeholders. The document lists various sources of funding like equity, debt, and strategic investments. It notes that funds raised should be invested to create value by pursuing available, latent, or new opportunities based on the evolving strategy.

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419 views10 pages

Entrepreneurial Finance

This document discusses entrepreneurial finance. It explains that entrepreneurial finance involves understanding resource allocation, funding sources, and cash management for entrepreneurial firms. It also includes evaluating business opportunities from start to later stages and exploring options to create value for stakeholders. The document lists various sources of funding like equity, debt, and strategic investments. It notes that funds raised should be invested to create value by pursuing available, latent, or new opportunities based on the evolving strategy.

Uploaded by

ecell_iimk
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPT, PDF, TXT or read online on Scribd
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Entrepreneurial

Finance

Anjana Vivek
www.biZkul.com
[email protected]
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Entrepreneurial finance
 Entrepreneurship has many
definitions, has elements of risk-
taking, innovation and pursuit of
opportunities relentlessly without
regard to resources controlled

One needs to understanding
finance in the context of
entrepreneurial firms

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Entrepreneurial finance
 Finance involves the study of
resource allocation, cost of capital,
deciding on funding source,
managing working capital needs
and most importantly, managing
cash

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Entrepreneurial finance
 Includes evaluation of business
opportunities from start-up stage to
later stage companies
 Needs an understanding of the value
drivers of the business

Involves exploring options to create
value, for the business, for
stakeholders

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Entrepreneurial finance
Needs understanding of

People
 Business

 Environment


Deal issues

Synergies

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Sources of funding
 Funding gap can be met from multiple
ways, traditional, new ways of funding
and looking at creative options
 Can you think of these and list them
 Each option has its own advantages and
disadvantages; can you think of what
these could be?

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Sources of funding
Funding gap can be met from

Equity investment
– Angel investment
– Venture capital investment
 Debt financing

Strategic investment
 Increasing revenue by changing product
mix or cash flow timing

Innovatively sourcing cash
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Some examples
 School needing funding for expansion

IT product development company being
let down by investor
 Confectionery/chocolate producer needing
extra funds to meet expected surge in
demand during the Christmas Season

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Utilisation of funds
Funds raised are invested in
 Available opportunity


Opportunity that is latent and not obvious
 Creating opportunity


Based on strategy of entrepreneurs, which
may change and evolve over time

The question to be asked: Is value


being created or is there an attempt
to create value?
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Entrepreneurial finance and
financial strategy in Summary
Entrepreneurial finance includes inter-alia:
 Strategic financial planning for short term

and long term


 Preparing and implementing business plans,

financial forecasts
 Review of funding options

 Continuous monitoring and updation -

setting up internal controls, management


information systems
 Preparing for alliance partnerships;

including due diligence review, valuation


and negotiation, deal terms and conditions
 Value creation 10
www.biZkul.com

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