Entrepreneur - Assignment 1 - Sources of Finance in Vietnam - B.A.Tuan-v2

Entrepreneur - Assignment 1 - Sources of Finance in Vietnam - B.A.Tuan-v2

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RMIT University Graduate School of Business Master of Business Administration BUSM 4009: ENTREPRENEURSHIP AND NEW VENTURE CREATION SOURCES OF FINANCE FOR NEW VENTURE IN VIETNAM Course lecturer: Michael Saram Student names: Bui Anh Tuan – 314 7096 Campus: RMIT Hanoi
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S O U R C E S O F F I N A N C E F O R N E W V E N T U R E I N V I E T N A M TABLE OF CONTENT 1. I NTRODUCTION 3 2. T HE A VAILABLE S OURCES OF F INANCE IN V IETNAM ..................................................................... 3 2.1. E QUITY FINANCING .............................................................................................................. 3 2.2. C ORPORATE P ARTNER /S TRATEGIC I NVESTORS .......................................................................... 4 2.3. D EBT CAPITAL .................................................................................................................... 5 2.4. H YBRID CAPITAL ................................................................................................................. 5 2.5. I NTERNALLY GENERATED CAPITAL .......................................................................................... 5 3. S O W HAT I S THE P REFERRED S OURCE OF F INANCE ? .................................................................... 6 4. C ONCLUSION 7 R EFERENCE 8
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S O U R C E S O F F I N A N C E F O R N E W V E N T U R E I N V I E T N A M 1. Introduction One of the most critical areas that entrepreneurs have to think of in starting up a new business is perhaps raising capital to realize their business ideas. Within the context of this paper, the author’s aim is to briefly introduce to the to-be-entrepreneur on the followings: the key sources of finance that are available for entrepreneurs in Vietnam; the advantages and disadvantages these different sources of finance. 2. The Available Sources of Finance in Vietnam 2.1. Equity financing The most commonly used source of finance for any start-up business is equity capital. The entrepreneur can not simply start up a business and seek finance from outsiders be merely selling an idea. Instead, they would have to invest some money into the business first in order to build something concrete that could attract the interests of the potential investors. Furthermore, as Roberts et al (2007) defined, equity capital is also one means of demonstrating the goodwill and commitment of the entrepreneurs i . There are several types of equity financing that the entrepreneurs could consider: Private investors/angels Private investors could be anyone from your friends, your family members who have some extra money and want to invest somewhere. This source of finance is typical for small privately owned businesses in Vietnam where the large financial institutions are reluctant to provide funding for these enterprises due to the higher risks involved. Venture capital
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Entrepreneur - Assignment 1 - Sources of Finance in Vietnam - B.A.Tuan-v2

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