Start-Up Capital
This type of capital is necessary to cover the initial costs of opening a business, such as buying equipment and securing a location.
What is start-up capital?
This type of funding is provided by investors to high-growth start-ups in exchange for equity or partial ownership.
What is venture capital?
Working capital is calculated by subtracting current liabilities from this.
What are current assets?
This type of capital is used to purchase long-term assets such as land, buildings, or equipment.
What is investment capital?
Entrepreneurs often raise start-up capital through this method, which involves borrowing money from family and friends.
What is a loan from personal connections?
Venture capitalists typically expect a high return on their investment due to this type of business risk.
What is high risk?
This type of capital is used to cover day-to-day operating expenses, such as paying employees and suppliers.
What is working capital?
When a business expands by acquiring new facilities or upgrading technology, it is using this type of capital.
What is investment capital?
This document, detailing business goals and financial projections, is often required when seeking start-up capital from investors.
What is a business plan?
Before investing, venture capitalists often perform this due diligence to assess the company’s potential.
What is an evaluation or risk assessment?
Insufficient working capital can lead to this problem, where a business cannot meet its short-term obligations.
What is a liquidity crisis?
Investment capital is typically raised through these methods, which may include selling shares or bonds.
What is equity financing or debt financing?
Start-up capital is often used to purchase this, which includes machinery, office supplies, or computers.
What are assets?
Venture capital is most common in this type of industry, where companies focus on innovation and rapid growth.
What is technology?
A business might improve its working capital by negotiating this with suppliers, giving it more time to pay bills.
What are extended payment terms?
Businesses use investment capital to achieve this, which involves increasing production or entering new markets.
What is business growth or expansion?