Business Structures
Bootstrapping - refers to the process of using only existing resources, such as personal savings, personal computing equipment, and garage space, to start and grow a company.
Pros - you have 100% ownership of your business, control over direction of company
Cons - slow growth, and survival is hard
Crowdfunding - the practice of funding a project or venture by raising money from a large number of people who each contribute a relatively small amount, typically via the internet.
Pros - fast way to raise finances without fees, investors can become loyal customers
Cons - building interest for the project may take up significant resources, if you don't reach your funding target, any finance will usually be returned to your investors and you will receive nothing
Venture Capital Funding - is a sum of money investors commit for investment in early-stage companies. The investors who supply the fund with money are designated as limited partners. The person who manages the fund is called the general partner.
Pros - large amount of capital can be raised, networking opportunities are included
Cons - founder ownership stake is reduced, funding scarce and difficult to obtain.
What is a merger?
A merger is an agreement that unites two existing companies into one new company.
Pros - Increases market share, reduces the cost of operations, avoids replication
Cons - Raises prices of products or services, creates gaps in communication
What is acquisition?
An acquisition is when one company purchases most or all of another companies shares to gain control of that company
Pros - access to experts, increased market power
Cons - culture clashes, conflicting objectives
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