MOE - Obtaining the Right Financing Part 1/2

Summary

This video script covers essential topics for entrepreneurs seeking financing, focusing on sources of funding and the importance of a solid business plan. It outlines various funding options, including personal savings, family and friends, bank loans, business angels, venture capital, government support, and crowdfunding. The script emphasizes the significance of self-funding through savings and explains different types of bank loans, the role of business angels and venture capitalists, and the benefits of government and crowdfunding platforms. It also highlights the necessity of a strong business plan to secure funding.

Takeaways

• 💼 The first objective of the class is to identify different methods of obtaining funding for new business startups.
• 💰 The most common source of funding for new businesses is self-funding, primarily from personal savings.
• 🏦 Bank loans are a significant source of funding for small businesses, including commercial loans and lines of credit.
• 👪 Family and friends can provide funding in the form of debt or equity, with the latter involving them as shareholders.
• 📈 Business Angels are individuals, often successful entrepreneurs, who fund businesses and expect involvement in the startup process.
• 💹 Venture Capitalists work for organizations that provide funding to businesses beyond the startup phase, often for expansion and market share growth.
• 🏢 Government agencies offer financial support, knowledge, and training to new startups, such as the Digital Economy Promotion Agency (DEPA).
• 🌐 Crowdfunding platforms like Kickstarter and Indiegogo connect entrepreneurs with a broad network of potential investors.
• 📊 A solid business plan is crucial for securing bank loans and other forms of funding.
• 🔍 Networking is a key strategy for finding Business Angels and other funding opportunities.

Q & A

What are the two main topics discussed in the video script related to entrepreneurship?

The two main topics discussed are sources of funding and the business plan.

What is the most common source of funding for new business startups according to the script?

The most common source of funding for new business startups is self-funding, which means using personal savings.

What are the different types of funding that can come from family and friends as mentioned in the script?

Family and friends can provide funding in the form of debt, where the money must be paid back, or equity, where they become shareholders and may expect profit sharing or dividends.

What is a commercial loan and how does it differ from a line of credit as explained in the script?

A commercial loan is a debt obtained from a bank to start or invest in a business, while a line of credit is a type of loan for business liquidity that allows borrowing money for short-term needs like paying suppliers.

Why is a solid business plan important when seeking a bank loan, as highlighted in the script?

A solid business plan is important because bankers look for it as a supporting document to assess the viability and potential success of the business before approving a loan.

Who are business angels and what kind of support do they typically provide to startups?

Business angels are individuals, often successful entrepreneurs, who provide funding to businesses and expect to be involved in the startup process. They typically do not demand immediate revenue but rather look for growth potential.

What is the difference between debt and equity financing as sources of funding for entrepreneurs?

Debt financing requires the entrepreneur to pay back the borrowed amount, often with interest, while equity financing involves giving up a share of the company in exchange for capital, where investors may receive profits or dividends.

How does venture capital funding differ from other sources of funding mentioned in the script?

Venture capital funding comes from organizations that manage large pools of money from institutional investors. It is suitable for businesses beyond the startup phase and often involves significant operational support and market expansion.

What role do government agencies play in providing financial support to new business startups as discussed in the script?

Government agencies offer various financial support, including seed money and training programs, to new startups as part of their policy to foster entrepreneurship and innovation.

What is crowdfunding and how does it work in supporting entrepreneurs as described in the script?

Crowdfunding is a platform that connects entrepreneurs with a network of potential investors through social media. It allows entrepreneurs to raise funds by pitching their ideas or projects to a broad audience, who can invest small amounts of money.

What are some popular crowdfunding platforms mentioned in the script for entrepreneurs to raise funds?

Some popular crowdfunding platforms mentioned are Kickstarter and Indiegogo, where entrepreneurs can post their projects to attract financial support from investors.

Outlines

00:00

💼 Introduction to Financing for Entrepreneurs

The script begins with an introduction to the topic of financing for entrepreneurs, emphasizing the importance of understanding different funding sources and the creation of a solid business plan. The speaker outlines the learning objectives, which include identifying various methods of obtaining funding. The paragraph introduces the concept of self-funding through personal savings as the most common source for new business startups. It also mentions other sources such as family, friends, bank loans, venture capital, and crowdfunding platforms. The speaker highlights that while many entrepreneurs start with their own savings, they often turn to external sources like family and friends for additional funding, which can come in the form of debt or equity.

05:01

🏦 Exploring Bank Loans for Business Funding

This section delves into the specifics of bank loans as a funding source, distinguishing between commercial loans and lines of credit. Commercial loans are described as debt used to start or invest in a business, with an example given where an entrepreneur requires additional funds beyond their savings and seeks a loan from a bank. The paragraph explains how the loan is approved with an interest rate and a repayment schedule. Lines of credit are introduced as a type of loan for business liquidity, allowing entrepreneurs to borrow money for short-term needs and pay it back quickly, incurring interest only for the time the money is borrowed. The script also mentions government-supported banks that cater to the needs of small and new businesses.

10:03

👼 Business Angels and Venture Capitalists as Funding Sources

The script discusses business angels and venture capitalists as alternative funding sources. Business angels are described as individuals, often successful entrepreneurs themselves, who provide funding and want to be involved in the business growth process. They are characterized by their desire to contribute based on their experience rather than demanding immediate revenue. The paragraph also covers venture capitalists, who are individuals working for organizations that manage funds from large institutional investors. These capitalists typically provide funding for businesses beyond the startup phase and may offer operational assistance. Examples of venture capitalist firms and the sectors they support are given, indicating that such funding is suitable for businesses requiring substantial capital for expansion.

15:07

🌐 Government Support and Crowdfunding for Startups

The final section covers funding from government agencies and crowdfunding platforms. Government agencies are presented as a source of financial support, knowledge, and training for new business startups, with specific programs and agencies mentioned that provide seed money and other assistance. Crowdfunding is introduced as a platform that connects entrepreneurs with a network of potential investors through social media. The script explains how crowdfunding allows entrepreneurs to raise funds by presenting their ideas or projects on platforms, which can attract small investments from a wide pool of individuals. Examples of popular crowdfunding platforms are provided, along with a brief explanation of how they work and the types of projects they support.

Keywords

💡Financing

Financing refers to the process of obtaining funds required for the start-up or expansion of a business. In the video, financing is the central theme, with a focus on how entrepreneurs can secure the necessary capital to start or grow their ventures. The script discusses various sources of financing, such as personal savings, bank loans, and venture capital.

💡Business Plan

A business plan is a formal statement of business goals, the strategies for achieving those goals, and the methods for measuring progress at regular intervals. The script mentions that bankers look for a solid business plan as a supporting document when considering loan applications, highlighting the importance of a well-prepared business plan in securing financing.

💡Self-Funding

Self-funding, as discussed in the script, is the practice where entrepreneurs use their personal savings to finance their business ventures. It is noted as the most common type of funding for small businesses, emphasizing the importance of financial planning and saving before starting a business.

💡Bank Loan

A bank loan is a type of financing that is borrowed from a lending institution or bank with the promise to repay the loan amount with interest. The script explains two types of bank loans: commercial loans and lines of credit. Commercial loans are used for starting or investing in a business, while lines of credit provide funds for business liquidity needs.

💡Equity

Equity in the context of the video refers to an ownership interest in a company. When family or friends provide funding in exchange for equity, they become shareholders and may expect returns in the form of profit sharing or dividends. This concept is highlighted as an alternative form of financing where the investor gains a stake in the business.

💡Debt

Debt is money owed that usually needs to be repaid with interest. In the script, debt is mentioned as a form of financing where family or friends lend money to entrepreneurs with the expectation that it will be paid back, similar to a bank loan but often with more flexible terms.

💡Business Angel

A business angel is an individual investor who provides capital for start-ups or small businesses in exchange for ownership equity or debt. The script describes business angels as experienced entrepreneurs who are willing to fund businesses, often seeking to be involved in the startup process and provide guidance based on their own experiences.

💡Venture Capital

Venture capital refers to funds provided by organizations that invest in start-ups and small businesses with high growth potential. The script explains that venture capitalists work for organizations that receive money from large institutional investors and typically provide assistance in operations and market expansion.

💡Crowdfunding

Crowdfunding is the practice of funding a project or venture by raising small amounts of money from a large number of people, typically via the internet. The script mentions platforms like Kickstarter and GoFundMe, where entrepreneurs can post their ideas or prototypes to raise funds from a wide pool of potential investors.

💡Government Agencies

Government agencies, as discussed in the script, can provide financial support, knowledge, and training to new business startups. Examples given include the Digital Economy Promotion Agency (DEPA) and the National Innovation Agency (NIA), which offer seed money and various programs to support entrepreneurs at different stages of their business development.

💡Commercial Loan

A commercial loan is a type of bank loan extended to businesses for various purposes, such as starting a business, purchasing equipment, or expanding operations. The script uses the example of needing a million baht to start a boutique hotel, where the entrepreneur has only half the amount and seeks the rest through a commercial loan from a bank.

Highlights

Introduction to the topic of obtaining the right financing for entrepreneurship.

Objectives of the discussion: identifying different methods of obtaining funding and understanding the business plan.

The majority of funding for new business startups comes from personal savings.

Other sources of funding include money from family, friends, bank loans, and venture capitalists.

Family and friends can provide funding in the form of debt or equity.

Bank loans are a common source of funding for small businesses.

Commercial loans are debt asked from a bank to start or invest in a business.

Credit lines are a type of bank loan for business liquidity.

Government-supported banks like SME Bank and GSB Bank offer loans to new business startups.

Business Angels are individuals, often successful entrepreneurs, who fund businesses.

Venture capitalists work for organizations that provide funding beyond the startup period.

Venture capital is suitable for businesses needing funds for expansion and increasing market share.

Government agencies offer financial support, knowledge, and training for new startups.

Digital Economy Promotion Agency (DEPA) supports new business startups at every stage.

Crowdfunding is a platform that connects investors with entrepreneurs through social media.

Popular crowdfunding platforms include Kickstarter and GoFundMe.

Crowdfunding allows investors to select from hundreds of projects and invest small amounts.

Transcripts

[Music]

thank you

welcome back to the class many things

organizations and Entrepreneurship today

we will discuss on the topic of the

obtaining the right financings

these topics complies with two main

topics that are one sources of funding

and second the business plan

before our discussions I would like to

know the object tips of these topics I

would like you make sure that after you

completed these topics you need all

objectives of these topics

the first objective of this topic that I

expect from you is you should identify

the different method of obtaining

funding

well I expect that you are crystal Korea

what I expect from you after you

completed the topics of obtaining the

right financings here you are from this

page I show you that there are a number

of sources of funds for the news

business startup entrepreneurs like you

got

you can notice that 55 of source of

fundings come from your Saving right

followed by the source of funds from

memory and print at 13 from this slide

bang launched is a source of funds for

new business startup as well as you can

see from this page that Ranger capital

and business plan are of kind of your

source of funds

as I mentioned in the previous patch

that the most common source of ones of

new business startup like you guys is

self-funding it means you are saving

let's see on this page that how you can

read the self findings the most source

of self-funding is your personal saving

you know before you start your business

you need to plan to save your money as

personal saving funding from personal

saving is the most common type of

funding for small business

however you know in many cases the small

business startup entrepreneur like a

dead Clipper we call that others

people's money

so what are the other people's money

here you are the other people's money

are for example money from your parents

money from your family might be your

uncle's your relative from friends as

well from bank loan from business and

Joe's from Winter capitalist or from

cloud funding platforms

okay in terms of the family and friends

many entrepreneurs turn to deaf family

members and friends to list the capital

or money that they need to finance that

business a big source of funding for

entrepreneurs is Brands and family you

know

they can like a provide funding in form

of debt the EBT we call debt that you

must pay you need to pay back the money

to your family members or friends

your family member offline can provide

funding in form of equity as well before

this I mentioned that you can list money

from your family and friend like debt

debt and the second type of money from

family and friend are equities e q u i t

y right you may have two questions what

does this mean Equity right Equity means

that the family member or friend gets

shared in your company

there will be your shareholder for this

time they didn't like be your creditor

or debtor

the return that the childhood right

expect from that investment might be a

profit sharing or might be the dividend

right

[Music]

from this pad you can see here that the

bank loan are the most commonly like a

used source of funds for small business

entrepreneur as well

it is a good idea right to shop aloud

and find the bank that meets your

specific needs you can see here that

there are two kinds of Bank loaned the

first one I want to introduce to you guy

this is the commercial loan

the commercial loan is the first type of

bank loan what is the commercial loan

commercial loan is the debt that you ask

from a bank in order to start or to

invest your business for example you

need to have one million bad to start

your boutique hotel

currently you have like a only 500 000

spot you cannot list money from your

family or your friend anymore right now

you have only 500 000 spot but in order

to start your boutique hotel beach Nest

you need to have one million baht

therefore you expect to less money from

bank loan

you didn't submit all documents to a

bank

the bank approved the loan with interest

chart saying at five percent per year

for five years then you need to return

principal saying 10

000 but you need to pay the interest

saying two thousands but as Bank chart

five percentage per year so you need to

pay the 12 000 but every month for five

years

in general you should know that Bankers

are look for a solid business plan at

the supporting document we will discuss

on this topic about the business plan

later

[Music]

from this pad you can notice that it is

the second source of funds from bank

loan we call Credit live write the

credit line is another type of bank loan

what is a lie of credit or a credit line

a line of credit is a kind of loan that

you borrow money from the bank for your

business for your liquidity

for example you are a good customer Rye

of the bank that you borrow the money

right commercial loan right so you pay

the principal and interest every month

timely but at this time you need a small

money to pay your supply for the coffee

bean for staying 50 000 Spark

unfortunately you guy you don't have any

more money what should you do

correct yes you should ask the bank for

credit line

it's mean that you ask for money sayings

50 000 spots right the bank shut you

five percent per years the bank approved

the credit line right you obtained money

from Bank to pay for coffee bean right

for fifty thousands back

you know I feel like you land the

business for 10 days you collect money

from your customer right after that like

a unique turn the money like the fact

fifty thousand Spa to the bank

the bank will chat you want the bank

will charge you five percent from the

principal 50 000 spark for 10 days just

only 10 days right okay here this is the

kind of the credit line

okay you can see here from this page

that I show you some of the banks that

government support

for example small and medium Enterprise

Development Bank that we call the SME

bank and another one is the government

saving bank because GSP Bank what I need

to tell you the two names of banks

because you know some of the commercials

spam probably not offer loan for the new

business startup entrepreneur right you

guy why the two Banks still support the

new business startup entrepreneur it's

because it's like the government policy

to support small business startup

entrepreneurs for the fourth one the

business Angel is on the next slide you

can see here on this slide that business

Angel are The Fourth Kind of source of

funds

you may have the questions hey who is

business angels

yes business Angel are individual the

key word is the art individuals write

your friends your family but you just

don't know them

most business angels are like foremost

entrepreneurs or successful

entrepreneurs who want to funds business

that grows to their experiences

this is the main characteristics of the

business Angel as well you know business

angels are not demand for revenue or

income but what they're expecting for

you know they expect to involve with

your business is mean that they expect

to involve with the startup process

how you can find the business angels

yes networking networking is a great way

to find angels for your business

here you are the fifth kind of the

source of funds that is Venture Capital

risk who are The Venture Capital risk

right Venture capitalists are people who

work for organizations I'm saying the

keyword of the venture capitalist

organizations right okay I say again

that

Venture capitalists are people who work

for organizations

that list money from a large

Institutional Investor such as large

company

like so far this time at this time you

know the main characteristics of the

venture capitalist

this is the organizations of firms so

winter Capital funding is a suitable

options for business that are Beyond

startup period

sometimes you probably not fit to this

kind of source of funds as well as

entrepreneurs who need a larger amount

of venture capital for expansions and

increasing market share of the

businesses Venture capitalists usually

provide assistance in operations as well

some of the winter capitalists alsoles

help the business to identify the key

customer and supplier well we complete

the characteristics of the Venture

capitalists on the next two best ride

I've given you for example the venture

capitalist

you can see here like a beacon right

Beacon Adventure capital is the winter

capitalist for example Beacon is like a

subsidiary company of God's gone bank

right it's gone bang you can see here

from this page the sector or the

industry that Beacon expect to provide

financial support and for example here

Financial technology

customer customer internet

Enterprise technology if your business

in this sector you probably can ask for

financial support from Beacon

on the next page you probably like a

family witnessing Ventures

write Singh hot winter is another winter

capitalist here

Xing heart winter is a subsidiary option

corporations and Moonlight bravery

groups

expect to support the business that are

in for example in food and beverage

in the rear Estates in restaurant in

warehousings

if your business are in this categories

you probably ask for financial support

from xinha Winters well we just complete

the fifth source of funds right we will

move to the source of funded support by

government

you are the sixth type of the source of

funds is the source of fund from the

government agencies

goldmans also offer a variety of

financial source to new business startup

there are several government agencies in

Thailand who strong support new startup

bought seed money

like a knowledge and training as well

under the program of the business

startup you can receive money from

Goldman agencies

right from Digital Life presentations I

show you deeper the EPA deeper stands

for digital economy promotion agency who

is deeper deeper is a Goldman agency who

support new business startup right in

every stage

I saying in every step like you guy the

startup Stitch or the growth Stitch

there are the plenty of projects and

programs that the new business startup

can join for example deeper jump start

deeper text Tycoon Plus

other than deeper digital economic

promotion agency who is the government

agencies that provides financial support

knowledge and training

here you are you can see from this page

nie

right NIH stands for National

Innovations agencies

NRA is another government agencies that

provide financial support knowledge

trainings workshops to new business

startup as well

for now we just finished the fifth

source of fun that is government

agencies

right so we will move to the rush source

of fun that is cloud funding

what is the crowdfundings you know

okay I will let you have the idea

Cloud funding is the platform right I'm

saying platform so you can notice that

what I'm saying as the key word of the

cloud funding right the keyword of

crowdfunding is the platform

I say again Cloud funding is a platform

that provides you the networks

the network is the second keyword of the

cloud funding as well

crowdfunding is the network of people

through social media social media is the

another keyword of crowdfunding as well

okay well Cloud funding's websites right

will bring the investor and

entrepreneurs togethers Cloud funding

support entrepreneur by expanding the

pool of investor beyond the traditional

circle of owners relatives and Venture

capitalists

right you know Cloud fundings allows

investor to select from hundreds of

projects and invest as the small money

as a little money saying 10 like kick

total Indiegogo and GoFundMe are among

the most popular Cloud funding platforms

[Music]

I mentioned this in the previous slide

in the Google and Kickstarter right here

you are some informations of indigo on

this page

in terms of in the Google you can see

here that you probably have a great idea

to develop the right Edge carbon fiber

equivalent bicycle is the kind of the

great bicycle

you probably post your products projects

your idea into the Indigo platform

asking for financial support form

investor in the Google platforms

as well you can see on your right hand

side I show you the kickstarter in case

like you plan to launch your product

right

tickets that is the all-in-one gaming

case for Nintendo

you post your products might be the

Prototype you post your products you

post your idea on the kickstarter

platform in order to

less money from investor

okay here you are at this point you

already know you already familiar with

the crowdfunding

at this point we complete the topics of

the source of funds

[Music]