Finance.docx - Finance As mentioned earlier when a business expands it will require injections of fi nance This money will be used to purchase new

Finance.docx - Finance As mentioned earlier when a business...

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Finance As mentioned earlier, when a business expands it will require injections of fi nance. This money will be used to purchase new equipment, undertake research and development, hire more staff, exploit new markets, and open new outlets. Sole traders and partnerships, because of their exposure to risk (unlimited liability) with few business assets, can sometimes fi nd it diffi cult to obtain adequate fi nance, especially for research and development. Traditional sources of fi nance, especially banks, perceive this type of fi nance request as high risk. One possible source of fi nance for R&D is venture capital. Venture capital is money that is invested in small and sometimes struggling businesses that have the potential to become very suc cessful. The investors take an equity position in the business (own part of it) and pro vide supplementary fi nance. To overcome the diffi culty of raising fi nance from banks or fi nancial institutions, the business owner may decide to sell shares in the business. Therefore, the BizWORD A fl oat
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  • One '17
  • gopal

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