MOE - Obtaining the Right Financing Part 1/2
Summary
TLDRThis 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
- đŒ The first objective of the class is to identify different methods of obtaining funding for new business startups.
- đ° The most common source of funding for new businesses is self-funding, primarily from personal savings.
- đŠ Bank loans are a significant source of funding for small businesses, including commercial loans and lines of credit.
- đȘ Family and friends can provide funding in the form of debt or equity, with the latter involving them as shareholders.
- đ Business Angels are individuals, often successful entrepreneurs, who fund businesses and expect involvement in the startup process.
- đč Venture Capitalists work for organizations that provide funding to businesses beyond the startup phase, often for expansion and market share growth.
- đą Government agencies offer financial support, knowledge, and training to new startups, such as the Digital Economy Promotion Agency (DEPA).
- đ Crowdfunding platforms like Kickstarter and Indiegogo connect entrepreneurs with a broad network of potential investors.
- đ A solid business plan is crucial for securing bank loans and other forms of funding.
- đ 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
đŒ 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.
đŠ 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.
đŒ 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.
đ 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.
Mindmap
Keywords
đĄFinancing
đĄBusiness Plan
đĄSelf-Funding
đĄBank Loan
đĄEquity
đĄDebt
đĄBusiness Angel
đĄVenture Capital
đĄCrowdfunding
đĄGovernment Agencies
đĄCommercial Loan
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]
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