By referring to start up capital it is usually talked about in terms of getting funds to get a business started. There are several sources for getting capital for a business. For instance, getting personal loans from a friend or family member, loans from investors, bank loans and others, one could also consider equity or debt capital. It also depends on how the startup is being organized and the options available to the entrepreneurs. Such funds are also referred to as seed capital or seed money.
In case debt capital is taken up, it is in the form of a debt that needs to be repaid. When businesses take up funds through debt capital they need to do so with the advice and ensuring your financial needs safe. The entrepreneurs need to showcase their business plans and how they plan to repay and within what period of time. Fees and interest payable for these loans also vary. Some banks provide such loans while others can be in the form of government lending initiatives.
When businesses refer to equity capital to start off, here shares are offered in return for funds. Usually venture capitalists or self managed superfund North Sydney usually offer funds which are in the form of equity capital. The shares to be issued for a new venture need to be negotiated with the fund managers as it would also define the control they would have over the business operations and the profits that are generated. Entrepreneurs also need to plan how to divide the shares accordingly.
How to start?
Those who are looking to start up capital need to first come up with an amount that needs to be generated to kick start a business. Immediate expenses like rent, equipments and costs of manpower hire are some of the common concerns for starting off a new initiative. Entrepreneurs can refer to consultants who help them draw up estimates for starting a new venture. They will also guide the entrepreneurs on the right sources of startup capital available and help to negotiate loan terms with investors. They can also provide projections on the kind of returns that investors can expect.
Multiple funding requirements
Often startups need funding more than once in order to get started and reach a stage when it can generate enough funds to cover its expenses and remain profitable business consultants Sydney. Often new ventures need to be funded two or three times till it is able to take off. It also depends on the business model of a startup. Lenders and investors need to be ready for the unexpected as returns might come later than expected or more requirements might come up before profits are realized.