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05_-_Small_Business_without_Debt

05_-_Small_Business_without_Debt - Finance without Debt A...

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Finance without Debt A Guide to Sources of Venture Capital under £250,000
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Sources of Venture Capital under £250,000 1 2. Introduction 3. Fundamentals of Finance 3. Nature Of Your Business Objective 3. Where Is The Business Going? 4. Form Of Business 4. Impact Of Growth On The Rest Of The Business 4. Impact Of Growth On Your Private Life 4. Risk/Reward 5. Control 5. Cost 5. Availability 5. Characteristics Of An Entrepreneur 5. Golden Rules 5. The Flowchart 6. The Right Financing Package 6. Can You Find Personal Funds? 7. Can You Improve Working Capital Management To Avoid The Need To Raise External Finance? 7. Are Grants Available For This Project? 7. Do You Have A High Quality Management Team Or Proven Track Record? 7. Can Management Be Improved? 7. Is Your Business Profitable And Fast Growing? 7. Are You Willing To Share Control? 7. Is Factoring Suitable? 8. Do You Have Adequate Security? 8. What Is The Purpose Of The Finance? 8. Are There Tax Or Other Reasons To Lease? 9. Flowchart 9. Forms Of Finance 9. Venture Capital 9. Sources Of Venture Capital 10. Sources of Finance 10. Business Link 11. Local Enterprise Agencies And Trusts 11. Local Authorities 11. Accountants 11. Solicitors 11. Banks 11. What Should You Do First? 11. Preparing The Business Plan 12. How Should You Present Your Case? 13. Glossary 16. Other Contacts 18. Further Information Table of Contents
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Sources of Venture Capital under £250,000 2 Introduction Since the late 1970s, the small business sector has been one of the most vigorous elements of the economy. Even so, small businesses still find it difficult to attract capital for start-ups and expansion. Venture capital, which means selling a share in your business to someone else, can present a particular problem. Sums of less than £250,000 are difficult to arrange because of the disproportionately high costs involved and because information on funds available in this range is hard to come by. This is the problem, which is sometimes referred to as the "equity gap". That is not to say that there are not funds available in this range. Rather that many managers of small businesses have seen raising venture capital as unduly difficult, and as a result, have not fully explored this option. This publication, based on a previously issued booklet with the same name published by the DTI (Crown copyright therein is duly acknowledged), is designed to help small businesses find the finance and advice that is right for them - to take the mystery and complexity away from raising venture capital and thereby to help bridge the "equity gap". The title, "Finance without debt", refers to the chief characteristic of venture capital. However, the sale of a share in your business is only one way of financing growth. It will not be suitable for many small businesses, either because the owner does not want to release part of the equity or because it is not feasible to assess realistically the potential of the venture. The information we've provided here helps owners of small businesses themselves determine whether or not venture capital is right for them.
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