1. Entrepreneurship Mr. Bernstein Financing the Small Business Start-Up, pp 406-421 December 2015

2. Entrepreneurship Mr. Bernstein Financing the Start-Up Bootstrapping: Minimizing Expenses Minimize Full Time Employees Lease Building and Equipment Being Creative 2

3. Entrepreneurship Mr. Bernstein Finance Your Business Estimate Your Startup Costs Complete a Personal Financial Statement 3

4. Entrepreneurship Mr. Bernstein Equity Capital Selling slices of ownership Equity investors are entitled to share of profits May or may not have decision-making rights Sources Personal contributions Family or friends Partners Venture Capitalists 4

5. Entrepreneurship Mr. Bernstein Debt Capital Borrow money and pay interest on outstanding balances Secured Loans are backed by collateral Unsecured loans have lower status in the case of bankruptcy and liquidation Sources Banks Family or friends SBA or other government agencies 5

6. Entrepreneurship Mr. Bernstein Debt Capital Types of debt capital Line of credit (small fee even if money if not accessed) Long-term loan (typically >1 year) Accounts receivable financing Vendor financing What types of debt might be appropriate for your business? 6

7. Entrepreneurship Mr. Bernstein Debt Capital What makes lenders comfortable their loan will be repaid? Solid business plan Track record of sales and profits Entrepreneur experience in the industry Entrepreneur equity capital Debt-to-equity ratio How can your business address these lender concerns? 7