Sources of Initial Capital

1
Financing the Plan

• Sources of Initial Capital

2
Sources for Small Start-ups

• Personal Borrowing/Credit Cards
• Spouses Earnings
• Borrowing from Family
• Cash from Partner

3
Business Loans
Backed by Collateral or Endorsed?

• Bank Loans- endorsed for down-stream
  consideration
• Loans or Credit from Suppliers
• Loans, Discounts, or Credit from Landlord

4
Debt Instruments
(Increases in Liabilities)

• Promissory Note
• Deed of Trust
• Bond
• Account Payable
• Customer Prepayment
• Lease Agreement (long term)

5
Selling Equity

• To Suppliers
• To Venture Capital Companies

This works for high-potential product, concept,
patent, or team
6
Equity Instruments

• Stock Certificate, Common/Preferred Lettered or
  transferable
• Limited Partnership Agreement
• Partnership Agreement
• Sole Propietorship

7
Contingent Agreements
Sources of Assets or Services for Deferred or
Non-cash Payments

• Royalty Agreement
• Option, Stock Option
• Commission Agreement
• Lease or License Agreement
• Barter Agreements
• Joint Venture, Host/Parasite Deal
• Moonlighting (keep day job)
• Sweat Equity

8
Proforma Sources and Uses of Initial Capital
Dont get all your capital from one source.
Match the specific need with the cheapest
available source
Click on button to View Table
9
End of Presentation