BUSN105 Unit 2 Individual project - Running head FUNDING...

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Running head: FUNDING OPTIONS FOR Funding Options for Your Business Steve Swallows American Intercontinental University BUNS105 10/14/2010 1
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Abstract 2
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FUNDING OPTIONS FOR I this paper I will discuss my choice for financing my business, and the reason I chose the method for funding my business. I also am discussing with the different areas of the financial market there meanings, there function, and importance of investment bankers, the stock market, financial management, and risk financing. I will also discussing different funding options to help you in starting your own business and future planning for your business.Funding Options for Your Business I have several funding options available for my business. Now what I have to do is choose one. I know of at least thirty-three ways to fund my business but I have decided to borrow money to finance my business the reason I chose this route is because all the other options I had to choose from this was the more logical decision. Basically I chose to borrow money over selling stock or licensing my technology. Selling Stock in Your Business While selling shares of stock in your business is a proven way to raise money it is highly not recommended and is generally not an option for small businesses. Selling stock in a private placement is a way of getting cash from investors while maintaining control over who becomes a shareholder in your business. However, prior to selling shares of stock you will need to receive Board approval and possible shareholder approval. In addition you will need to set a price for your stocks and have a stock sales agreement in final shape. But first to even consider selling stocks in your company, you will need to have a company that shows signs of potential growth and profitability. Three things you will need are your business plan, your marketing plan and your financial projections, these things are key factors in convincing someone to buy stock in your business. You will need to show possible 3
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future shareholders how their money will be spent and what you predict as the growth of your business. When you plan to sell private stock to start a small business, it is most likely that you will know most of your shareholders. Keeping a good relationship with your shareholders is important. They will be willing to help you and buy more stocks if and when you offer it again, so keep them informed as to the operations and prospects of the business. Funding Options for Your Business Also when a business is looking to raise money by selling shares of stock, a document providing full disclosure is required. A Private Placement Memorandum (PPM) is used to disclose such information about your business. Also known as an Offering Memorandum, this is an important
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