explain business plan to a relative

Topics: Venture capital, Startup company, Entrepreneurship Pages: 2 (1374 words) Published: October 20, 2014

Estefania Zapata
International finance
Dear mom. Since you ask me here are some recommendations about how to survive financially during the initial startup period. An advantage of becoming an entrepreneur is that Lawmakers who favor entrepreneurship focus on tax incentives for venture capital and loan guarantees for startups. Another advantage is that Policymakers have high expectations about the positive impact on job creation and economic growth caused by startups rather than the big corporations. The Finance area is a very important part of your business plan. More than 80% of the companies that politicians want to sustain, were financed through personal savings, credit cards and second mortgages of the founders. Additionally, less than one fifth of the Bootstrappers, launching ventures with modest personal funds, had raised equity for continuing financing the business during the five or more consecutive years. Bootstrappers relied on debt or retained earnings, in order to grow. New entrepreneurs are unwilling to pursue business opportunities without raising big money first. Raising big money requires careful market research, a well thought-out business plan, quarterly performance reviews, and complex financial structures. This requirements are a significant disadvantage for “Bootstrapping.” That is why it is very important to understand what it takes to start a business and why that is likely to conflict with what venture capitalists require. Mom as a new startup, the biggest challenge won’t be raising money, but having the intelligence and force to do well without it. Many entrepreneurs spend a lot of time looking for venture capitalists, but something very common among these entrepreneurs is that they lose hope when capitalists reject their promising business plan. However most of the time capitalists reject the business plan not because their proposal is poor, but because they do not meet the exacting criteria that venture capitalist are looking for....
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