1. Discuss the importance to entrepreneurs of understanding their financial statements.
Each tell different things about the business:
- Income statement- how a company has performed
- Balance sheet- company owns and owes
- Statement of changes in owners
Bootstrapping- the process of finding creative ways to exploit opportunities to launch and grow
businesses with the limited resources available for most start up ventures.
Many bootstrap to keep 100% of the ownership
Dilution- the reduction of income and
1. . Discuss the various types of short-term credit. What are the best uses for each type?
What should an entrepreneur do to establish each form of short-term credit?
Trade credit is credit with suppliers. It is not super quick to establish. It
1. Discuss the various types of external equity financing. What are the best uses for each type?
What should an entrepreneur do to establish each form of equity financing?
-invest directly into entrepreneurial ventures
- have enough money to invest
1. Why is accounting considered the language of business? Why is it important for the
entrepreneur to learn this language? Most of the communication in business is done
through this. Accounting tells about bills, profits, assets, paym
1.What is a reverse income statement and what is its relevance to raising funds?
It starts with the required level of profit and works backwards. Min. rate of return X
amount invested = required level of profit . Must change assumptions to achieve this.
1. Why is timing such an important issue in planning to exit a business? The entrepreneur
must consider what they want in their own life and patterns and timing in the market.
2. Discuss the factors that entrepreneurs should consider when planning their e
What Ent say.
Product is 90% complete
And what investors hear
It nearly worked one time
We have a name for it
First mover advantage
We dont understand how it works
We have a 65% market sharein Sierra
1. How does the discounted cash flow approach incorporate many of the other principles of
It incorporates all the previously mentioned principles Uses EBITDA as starting point then
estimates cash flow for the next five years using accurate assu