This video is an introduction to a playlist that covers definition of entrepreneurial finance, its
differences from corporate finance, different stages of entrepreneurial activity and the right funding
depending on the stage. Entrepreneurial finance involves examining how entrepreneurs secure and
handle capital for their business ventures. It distinguishes itself from corporate finance through
factors like: funding origin, approaches to determining value, entrepreneur's role among others.
This video explains the need for entrepreneurial finance as to meet the long-term and short-term
finance requirements. There are different types of finances which include: overdraft, bank loans,
asset-based finances, angel funding and venture capital among others. The sources of finance are
divided into external sources that come from others not involved in business ownership and internal
sources which come from within the business and its owners.
"Entrepreneurship: Successfully Launching New Ventures" by Barringer and Ireland (2012), chapter
10 is about getting funding or finances. New ventures need funding for reasons like: cash flow
challenges, capital investments and lengthy product cycles. The sources of personal finances include:
personal funds, friends and family and bootstrapping. There are three steps needed to raise debt or
equity financing: first determine amount of money needed by business, determine appropriate type
of financing and lastly develop strategies for involving potential investors. Finances are sourced from
equity financing sources like business angles, debt financing sources like commercial banks and
creative sources like leasing.
Entrepreneurial finance is defined as the process of acquiring capital and making financial decisions
for a new venture. The main difference between entrepreneurial and corporate financing is that
entrepreneurial finance focuses on acquiring funding to start a business while corporate finance
focuses on increasing long-term value and maintaining entrepreneurial finance success. As an
entrepreneur one needs financial skills like: credit, budgeting, effective spending, responsible
borrowing and investing to grow one’s business. There are different sources of financing such as:
sources of personal funding like family and friends, equity financing sources like business angels,
debt financing sources like banks and creative sources like leasing.
Entrepreneurial finance for start-up ventures is basically the process of sourcing for needed
funds and managing financial resources to begin and sustain a new business venture. It is
characterized by identifying the financing sources and choosing the appropriate ones while
taking into account the development stage of a business and the capital requirements. The
sources used include: seed funding, bootstrapping, angel investors, venture capital,
crowdfunding, bank loans, and grants.