Week 5 Discussion: Entrepreneurial Finance and Accounting Week 6 Discussion
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Week5DiscussionEntrepreneurialFinanceandAccounting.docxWeek 5 Discussion: Entrepreneurial Finance and Accounting
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Week 6 Discussion
Learning Objectives
· Distinguish between financing and accounting.
· Explain debt and equity financing and the advantages and disadvantages of each.
· Discuss the advantages and disadvantages of bootstrapping.
Instructions
Each week you will be asked to reflect and respond in a Discussion Board forum. Your contribution to the topic should be clear, complete, and accurate. This assignment also requires that you read the answers posted by your classmates and respond to at least one of those postings. You are required to meet the following guidelines.
· Develop a detailed response using APA format (in-text citation, reference list) and utilizing at least one credible resource.
· Post your initial response by Wednesday, Nov 17th by 11:59pm
· Post feedback responding to a classmates post by Saturday, Nov 20th by 11:59pm
After completing the assigned readings (Chapter 9: Entrepreneurial Finance and Accounting ) answer the following discussion questions.
1. Outline the difference between financing and accounting and discuss and example that explains the difference.
2. How do funding requirements differ in each stage (seed, early, mature) of a company’s lifecycle and why?
3. What are some of the sacrifices you could see yourself having to make to bootstrap your potential business?
Initial response should be at least 150 words for the discussion post and no less than 100 words for the classmate’s response.
INITIAL RESPONSE IS DUE WEDNESDAY BEFORE MIDNIGHT, WHICH IS TOMORROW AND CLASSMATES POST IS DUE SATURDAY.
FIRST CLASSMATE POST:
Jaqwana Blakely
12:10amNov 17 at 12:10am
Jaqwana Blakely
Entrepreneurship BA231VC
Wednesday, November 17, 2021
1. Outline the difference between financing and accounting and discuss and example that explains the difference
- Financing is the act of raising money for a intended purpose.
o For example, an organization needs finances to launch their business, so they Seek Financial assistance From investors and business owners, who would like to be repaid in a short period of time.
- Accounting is a process of summarizing, managing, and communicating an organization operations and performance.
o For example, if the owner of the business want to view its transactions from the prior month to make investments decisions for the next month, they must view the needed financial statements.
2. How do funding requirements differ in each stage (seed, early, mature) of a company’s lifecycle and why?
- The seed- stage difference is, it is the earliest point of a company’s life cycle. considering businesses at this stage are not making enough revenue at this point, the personal savings, small investments for a family or investors, usually manage the initial funding of an organizations seed stage.
- A company in its early stage has started its development process of the product and it may have technical proof checks that may need to be adjusted. In this stage, The companies investors may have if you externalInvestors like venture capitalist. It is someone or an investment firm that specializes in funding early-stage organizations.
3. What are some of the sacrifices you could see yourself having to make to bootstrap your potential business?
- While trying to initiate a potential business, I can see myself having to sacrifice my personal savings in asking close relatives for investments at the early stage of my company. when the company starts to return revenue I will begin paying them back in payments. Secondly, I see myself finding other ways to raise money like financing or taking out a business loan.
Citation: Laverty M. & Littel C. (2020) Entrepreneurship: The Entrepreneurial Journey. Open Stax.
SECOND CLASSMATE POST
Henriadam Brower
YesterdayNov 17 at 6:58pm
Henriadam Brower
1. Accounting is simply more about accurate reporting of what has happened and compliance with laws and standards. Finance is about looking forward and growing a pot of money or losses. If you like thinking in terms of a longer time horizon you may be happier in finance than in accounting. An example of accounting is preparing a a profit or loss statement. An example of finance is a bank loaning someone money for a house.
2. The first stage is self funding this stage involves fewer complexities and documentation, and even your friends and family maybe ready to lend at a cheaper rate. Self-funding or bootstrapping is apt if your startup requires a little investment earlier. The second one is Seed-capital, this is an investment made at the preliminary stage of the startup. This helps the business in identifying and creating a perfect direction for their startup. The third one is venture this is when the company’s final products or services reach the market, venture capital funding comes into the picture. Regardless of the products’ profitability, every business considers using this stage that further involves multiple rounds of funding such as series A,B,C. The last one is IPO this is When a business decides to raise funds from the public including institutional investors as well as individuals, by selling its shares.
3. I would have to have stability mentally so I can continue you to have confidence when i'm selling and not selling. Work/life split because i'm a entrepreneur, the lines between work life and personal life will slowly blur. Income, sleep and comfort would be some more sacrifices I would have to make. If i'm always comfortable as a business owner how can I grow?
References
5.3 Competitive Analysis - Entrepreneurship. (n.d.). Retrieved from https://openstax.org/books/entrepreneurship/pages/5-3-competitive-analysis
ClearTax. (2021, October 12). Stages of Startup Funding - Self, Seed, VC, Series A, B,C, IPO - Explained. Retrieved from https://cleartax.in/s/startup-funding-rounds-life-cycle
