A.S #8: Funding: The Personal MBA by J. Kaufman

‘’Money often cost too much.’’ -Ralph Waldo Emerson

The first and every reason, or should I say excuse people use that hinders them from doing business is the lack of CAPITAL/FUND.

Many companies like has started from nothing or small amount of capital to a million dollar profits.

What is most important in creating a business is having a good ideas. If you have a good business ideas and you execute it well, money will eventually follow.

And the good news is that there is plenty of money out there waiting for your good ideas.

In Josh’s book, he mentioned the hierarchy of funding.

‘’Funding can help you that otherwise be impossible with your current budget.’’

Hierarchy of Funding:

1.Personal cash -this is probably the best form of capital that you can use when you’re just starting your business. Using your own money.

2. Personal Credit -I actually don’t know how personal credit works and Josh didn’t really elaborate it on his book. But uncle Google must know, please do the honor and Google it.

3. Personal Loans -this is a debt that you actually get from your family or close friend. They lend you money and you pay it back. It sound easy. Right?

4. Uncensored loans -money where you get from banks or credit unions. Unlike with personal loans, this one must be pay back with interest.

5. Secured loans -unlike uncensored loans, secured loans require collateral. It means if you can’t pay, the lender can get whatever you put in as collateral for your payment. It can be a car, house or a land.

6. Bonds -is a debt that you can sale to individuals or companies. When the bond matures, you pay the initial price to the buyer with interest. This is usually done through investment banks.

7. Receivable Finance -is a special type of secured lending unique businesses. Banks can lend a you huge amount of money but they also make sure that they get paid first before anyone else.

8. Angel Capital -you probably heard the term ‘’Angel investor’’, these are wealthy individuals willing to invest their money for your business in exchange for owning a share in your company. Their range is usually range from $10 000 to a million dollars.

9. Venture Capital -maybe you also heard the term ‘’Venture Capitalist’’, unlike Angle investors, Venture Capitalists is an individual or group of wealthy individual who are extremely wealthy. Their investment can be a tens or hundreds million dollars in just a single investment.

10. Public Stock Offering -this is where you go public to raise money. Investors can buy and sale share of your company in open market.

By: Al-Sadat Sabtula