FINANCIAL BACKING FOR ENTREPRENEURS.   Term Paper ID:30767 Click to get this paper

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Paper Abstract: Discusses how entrepreneurs find capital sources. The business plan as a capital-generating product. Available sources of capital. Need for an entrepreneur to redo business concepts of a plan in order to obtain financing. Profiles of two leading entrepreneurs: Bill Gates, of Microsoft, and Michael Dell, of Dell Computers. 1 Table. Many quotations. Paper Introduction: HOW ENTREPRENEURS RECEIVE FINANCIAL BACKING Introduction Grover (1998) writing in Forbes points out that in 1984, 63% of “The Forbes Four Hundred” richest Americans were first-generation entrepreneurs. Last year [1997] that number was 72%. Nearly three in four of those that are extremely wealthy got that way by investing in themselves. According to the National Federation of Independent Business, more than 4 million people every year decide to start their own businesses. Not many of these business owners get superrich but many get very rich. In the process of owning, running and investing in their businesses most of them have experiences that they would never get working for others (Grover 146). One of the most written-about topics concerning entreprene Text of the Paper: The entire text of the paper is shown below. However, the text is somewhat scrambled. We want to give you as much information as we possibly can about our papers and essays, but we cannot give them away for free. In the text below you will find that while disordered, many of the phrases are essentially intact. From this text you will be able to get a solid sense of the writing style, the concepts addressed, and the sources used in the research paper. was Nearly three in four of those thatare extremely wealthy many of thesebusiness owners get superrich but many topics concerning entrepreneurship is finding where the of new wealth creation in the United States hundreds of thousands of jobs and spend more and Microsoft Fisher Cable and capitalists evaluateentrepreneurs' business plans and their negotiation business plan as a capital-generating product redo business conceptsinherent in a plan in order to obtain Plan as Capital Tool There is a crystal ball in fact a business plan the questions posed will force business idea or the continued success of an for constructing afinancial proposal Businesses managed likely to happen Thisprocess better prepares one for the future withouta plan Planning is appropriate for the future and make well-informed decisions because is no meaningful wayto evaluate results thus future anticipating and planning for how to maximize events A two just how much you know about your business There points of the plan Purpose of In this section is found service being offered and whether it is a start up the first year start-ups or the includes a list of the bridge financing or so on It is not a way to separate the edited profile that appeared on Biography what kind of market there was fortheir However when he was in he did write his company made a profit in the neighborhood partner could provide a version of BASICfor the mother His mother anxious to get her investment back competition He then explained that they had a software With great luck they found a computernerd is one of many writers to idea banks are typically risk-averse andtend to deny venture financing entrepreneur must turn to the realm of OPM financing The venture capitalmarket is divided into the most basic SEED CAPITAL usuallyvery large they are the most difficult with these plans the entrepreneur's financials are This refers to capital that is used to a bare bones basis Investors expect these equity FIRST STAGE FINANCING These funds theirinitial funds and still have a strong' story and probably more reasonable However first stage a businessthat is successful and new money will be used to maintain arealways limited to companies that phases of planning a private placement The business plan for capital there is since the company facts regarding the operations of time to assemble The process requires many hours ofassistance set forth objectives and rules and growing businesses toraise capital from private investor is any one investor with a of the offering RULE Highlights of of nonaccredited investors is but there are Rule or Section of the act A disclosure requirements no limit on the number of purchasers and bythe offering company the securities being liability provisions of anyof the federal or state Snapshot Two Michael Dell This is the edited profile built computers from cheapsurplus parts made savings he didn't haveto approach venture capitalists for have shed million jobs in the past years the overall succeeded There is no knowing for sure is vitally important In the absence of years is vague about one aspect ofrisk reward Specifically screwed over and losing the business thatthey will be formedin the next decade than increasingreliance on the Internet for industry and commerce the the coin is seldomexplored and in the article x x x Gross Return Net Return He comments to start something alone may be and an economic reward structure well beyond what corporations or far outweigh the value of task however of raising money the entrepreneur is well advised aconsistent activity in any business Works relationships Academy of Management Review Jan Dorsey David The Many programs at universities nationwide have capital hungry business owners R Venture Capital Made Easy skittish about lending to entrepreneurs Start-up companies are forced to The European May Michael Dell Profile Biography A E Business Review Nov Hundred richest Americans were first-generation millionpeople every year decide to that they would never get working for capital-backed start-ups are an importantsource of innovation and of all initial public offerings in the Apple Computer Oracle Intel Federal large body of literature that seeksto deal with the Cable and Shane In this analysis an entreprenurial venture Part will analyze towhat extent an BillGates founder of Microsoft and people opportunity context and the are five reasons why an piece of it The completed plan operations The completed plan will help communicate the business ideas forces the entrepreneur to look at the futureoperations of the rates among new businesses which are basedon a areprepared for it or not Everybusiness is involved in the tasks of making decisions and and as a result you manage will besurprised how much easier the Introduction Summary This states the facts of the business e performance tool request for financing including type LLC Sub S the industry retail service one sentence bullets that start with the word include sales production profit margin Usage State whether the loan plan must demonstrate mastery of the final analysis the only one being fooled is Microsoft it wasdoomed according to entrepreneurial theorists boring In addition Gates was shy awkward nervous stuttered and formed a companycalled Traf-O-Data which analyzed city traffic Altair a build-it-yourself kit thatcould be built for With Gates and Allenmoved back to Seattle and from IBM andexplained that their company was going to specialize to race back to Seattle for borrowed from mother again andrenamed the software personal savings and or family and the entrepreneur must first show evidence was made that it is importantto mention both andhow they relate to the business plan Matthews Below is documenting the business plan for the creationof prototypes bench models thesesections that the key to achieving each one entrepreneur is with spreadsheet programs buy the needed software program Start the company into a position of relative stability Start upfunding sales This capital is usually that therehas been some positive operational information generated exit strategy built into the plan SECOND STAGE These funds level banks and institutions sometimesenter the picture as the for big capital expenditures such asbuilding new interim financing for a company thatis and the issue of various types and categories of aftermarket support and also has to completely make full disclosure D OFFERINGS As suggested by the above statements registration documents entrepreneurs turn to a Reg entrepreneurs Offerings that are exempt under Rules and have of accredited investors but the number of nonaccredited investors may its investorswith a questionnaire subscription agreement Very during the preceding month period under the total dollar amount of securities sold during the states of Montana and Alaska which have no are exempt under Rule are relatively simple toprepare which reduces The exemptions from registration provided by Regulation D do notinclude the misstatement or omission offacts that freshman Michael Dell decidedto eliminate the middle man and sell his business model is almost identical to his first start off this section with another quote bySahlman We live and Microsoft Each of those companies it thoroughly and candidly addresses the ingredients of success people be called indispensable Sahlman Curiously however Sahlman who he seeks Talk to most budding entrepreneurs the rule Dorsey writing extensively about the nature wealth will be generated in record time by virtue a challenging inside look at venture capitalfrom the Typical breakout of VC portfolio performance per Item Bad an attractive deal for entrepreneurs Those who lack many of the technological and business skills necessary for grows he or she can still if the entrepreneur is able to understandthe rules and a business plan isnothing more than a plan of com Cable Daniel M Scott Shane A Prisoner's The Economist July Evanson David R Grover Mary Beth Go ahead Buy the dream Bankers Private Investors and Other Sources New York Tribune July D Matthews Peter Venture forth for a July Something old something new The Economist Feb Zider Bob HOW ENTREPRENEURS RECEIVE FINANCIAL BACKING Introduction Grover writing in got that way by investing in themselves get very rich In the process ofowning running and money is to capitalize an entrepreneurial venture and Long Research suggests that venture than billionon research and development annually Long Some Shane discuss the fact that the importance of thesecompanies on processes almost noresearchers have investigated entrepreneurs' and investors' Part willdiscern what sources of capital are available for the needed financing Each of theseparts little doubt that crafting a business plan so built of the right information and analysis can only theentrepreneur to take a thorough look existing business The completed plan will be a tool from a plan rather than by or what actually happens andmakes the entrepreneur more knowledgeable any organization that wants to approachthe future with a strategy you havethought about alternatives you will be facing actions are not based on a revised planbut rather revised plan should be revised as needed but at least once are accepted formats for business plans and the the Plan This is a brief statement of the company name brief statements about your business structure expansion or the purchase of an operating business Business Objectives next two years These statements owners their percent of ownership and a brief statement of Sahman emphasizes that honesty and unsuspecting investors from their money by hiding called themost accurately researched shows on cable television product since they didn't have a product first computerprogram While still in of In December the two friends saw a Popular Altair The two got the contract and moved to New knew several people atIBM and Gates and Allen flew a program thatcould work on any computer who had developed a program called Down and emphasize that entrepreneurslooking to shake the money Failing with the banks the entrepreneurcan then turn to or otherpeople's money Something Old Previously in this paper certain kinds of funding and it This money is loaned for research to get This is the earliest andhighest risk moremeaningful since they are based on reality rather than bring the various aspects ofthe funds tobe used to get an office hire some employees typically equity are used to enable the a number of hardorders The major funderstypically want a longer piece of the action and demand expanding at a greater rate than it the momentum of the company THIRD are break-even or profitable company FOURTH STAGE or BRIDGE this funding can become quitecomplex since it could notonly has to lay out sizable fees registering thebusiness Further the company must maintain certain minimum requirementsin order by attorneys and accountants and the SEC review can last forexemptions from federal registration The purpose of this investors RULE The highlights of this include No dollar amount certain net worth and or experience in the purchase of this include Offerings may not exceed million less the no investor sophistication stipulations RULE Allows the business can raise only by the sale no investor sophistication standards Rule is the most commonly sold by the company's ownofficers directors and securities laws These provisions are broad andinclude that appeared on Biography called themost accurately researched to his customer's specifications He didn't First Stage funding they approachedhim Part economy has added almost million Many of those jobs were But there is little doubt that crafting a crystal ball in fact a business plan how much is an entrepreneur willing have set up Entrepreneurs Such situations do happen but have been formed in any previous death of inflationand the dawn of price stability and he presents a table Table below whichshows the stretch and on this sample spread thusly quite willing to be hired into a universities afford Even if a any forgone salary Zider It is apparent from to think through his orher business very clearly Cited Bill Gates Profile Biography A E Lives of a Wall Street Angel Fast heading back to school Entrepreneur Magazine Dec Seattle WA Made Ez Products Long Mark obtain initial capital from personal savings or loans Online at http www biography com Sahlman William A entrepreneurs Last year that number start their own businesses Not others Grover One of the most written-about technological development and serve as a majorsource UnitedStates each year Lacy Historically these ventures have createdapproximately Express Lotus Development Compaq Digital Equipment Corporation relationship of the entrepreneur-venture capitalistrelationships Research has examined how venture we will discuss the following topics Part willanalyze the entrepreneur must be willing to Michael Dell founder of Dell Computers Part The Business risk reward picture is vitally important In the absence of entrepreneur needs anexcellent business plan The thinking involved in answering can serve as a feasibility study to help evaluate anew to personsoutside the business and can be a starting point business and anticipate what is business plan are significantly lower than for new businesses The process of developing a business plan helps youto anticipate recording theresults of business activities Without a plan there by reacting to events ratherthan by plan is after the first time and after arevision or and should also summarize the more important and amount Type of Business agriculture etc in which it will operate the product to that itemize what the entrepreneur wishes to accomplish in market share and or penetration Ownership This will be used for working capital entire entrepreneurial process from identification of opportunity to harvest the entrepreneur Sahlman Entrepreneurial Snapshot One Bill Gates This is The two men had nobusiness plan were unable to predict had little sense of clothes data Funded at less than the great bravado Gates contacted themanufacturer and said he and his took a loan from Gates' in software so therewould be no and try to solve the problem ofquickly developing such Microsoft Dos Part Sources of Venture Capital Marlowe friends since even with asolid business plan and a great of having been turneddown by banks Therefore the the type and amount of the typicalhierarchy of funding starting from or other pre-business expenses Although thesefunds aren't is a thorough business plan However Evanson and Beroff START-UP FUNDING up funding allows thecompany to function on is usually a combination of debt and provided to businesses that have spent and based on thisthe investment seems are required to augment the working capital of risk is substantially reduced and they know thatthe plants entering new markets develop new products and preparing to go public or is in the final securities GOING PUBLIC This is the most expensive on acontinuing basis of all material includedetailed disclosure historical financial statements and third partyaudits that take D offering In the SEC adopted Regulation D which become the mostcommon cost and time saving methods for small not exceed investors An accredited specific disclosure rules generally related to the size Rule Rule or Section of the act Number the preceding month period under Rule disclosure laws applicable to the offering No prescribed cost and delay and can generally be underwritten exemptions from the anti-fraud or civil are relevant to making a fully informed investment decision Entrepreneurial custom-made computers directly tocustomers Working from his dorm room Dell idea Andsince he started the company with of his own today in the golden age of entrepreneurship Although Fortune companies started with a business plan Is that why they opportunity context and the risk reward picture has taught the preparation ofbusiness plans at Harvard for several andthey are nervous about getting ofventure capitalists points out that More great corporations of three revolutionary forces an risk point of view of the VC This side of Alive Okay Good Great Total invested Payout year x new ideas funds skills or tolerance for risk the task while venture capital contributes both the financing get rich because the value of the stock will play by them Given the sometimes difficult action Likewise business planning is Dilemma approach to entrepreneur-venture capitalist Art Beroff Earning curve entrepreneurship Forbes Magazine June Lacy Harold Adams Media Corporation Marlowe Gene Banks traditionally are boost to your business acquiring venture capital Beta Group How Venture Capital Works Harvard Forbes points out that in of TheForbes Four Accordingto the National Federation of Independent Business more than investing in their businesses most of them haveexperiences how to obtain the money Venture capital-backed IPOs have accounted forone third of the market value well-known examplesof these ventures include America Online the economy has led to a relationshipsafter a venture has been funded the entrepreneur once hehas a business plan for will be separated by profiles of two leading entrepreneurs that it thoroughly and candidly addresses the ingredients of success be called indispensable Sahlman In Sahlman's view there at your whole business rather thanfocusing on an individual to help the entrepreneur moresuccessfully manage the business the seat-of-the-pants are more successful The process of planning about your business Studies show that failure for action The future comes whether you Planning is a continuous process in business management guessing Operating without a plan breaks the continuousprocess shown above a year Aspreviously mentioned planning is a continuous process You standardoutline goes something like this why the plan was written i i e sole proprietorship partnership This section is best illustrated by using should be measurable and within clear time frames Objectives can their experience in the business Loan efficiency are the keys tosuccess for any business plan A the fatal flaw For in the When Bill Gates and his partner Paul Allen started and both men were collegedropouts finding academia a bit too high school Gates and Allen Mechanics magazinethat was featuring the new Mexico wherethey filed a DBA as Micro-Soft Almost facing bankruptcy to New York met with five men called DOS for Disc Operating System Ofcourse they had Dirty Disc OperatingSystem which they bought tree must typically turn to the traditionsources of the Small Business Administration for a guaranteed loan However in thesection on business planning the statement is absolutelyessential that the entrepreneur understand what these divisions are and development It is moneytargeted at developing and investment that can be made Keep in mind when reading just serving as anexample of how proficient the potential business together such as the loaned by Gates'smother to and in general concentrateon putting company toinitiate full scale operations with manufacturing marketing and attraction to the investors at this stage is more equity and arenot as interested in seeing an is generatingits own working capital At this STAGE or MEZZANINE FINANCING These funds are usually slated FINANCING These funds are used to provide involve restructuring the company's capitalstructure its securities with theappropriate authorities hiring an underwriter negotiating the to keep its public' status REGULATION from to days This is why many was to makeraising money more efficient and cost effective for cap on the offering No limit on the number stocks The company can determine the sophistication of total dollar amount of securities sold company to raise a maximum of million less of securities to persons residing in used Regulation D exemption Offerings that employees THE OTHER SIDE OF REG D OFFERINGS civil and criminal penalties for shows on cable TV In year-old University of Texas make ituntil his sophomore year Today Anything for Money It is fitting to created by entrepreneurial ventures such as Cisco Systems Genentech a business plan so that built of the right information and analysis can only to give upin return for the money they tend to be the exception ratherthan year span Inthis transitional period entirely new pockets of the astounding growth potential of newventure fundings Dorsey Zider presents range of a typical VC portfolio Table For all these reasons venture capital is well-funded and supported venture Corporate and academic training provides founder is ultimately demoted as the company the research presented that there is moneyavailable for venture financing and always keep in mind that Online at http www biography Company Nov Entrepreneurs Envy versus enterprise Fisher Daniel Startup City Forbes Magazine Oct Capital from Venture Capitalists Investment from family and friends Minneapolis Star How to Write a Great Business Plan Harvard Business Review was Nearly three in four of those thatare extremely wealthy many of thesebusiness owners get superrich but many topics concerning entrepreneurship is finding where the of new wealth creation in the United States hundreds of thousands of jobs and spend more and Microsoft Fisher Cable and capitalists evaluateentrepreneurs' business plans and their negotiation business plan as a capital-generating product redo business conceptsinherent in a plan in order to obtain Plan as Capital Tool There is a crystal ball in fact a business plan the questions posed will force business idea or the continued success of an for constructing afinancial proposal Businesses managed likely to happen Thisprocess better prepares one for the future withouta plan Planning is appropriate for the future and make well-informed decisions because is no meaningful wayto evaluate results thus future anticipating and planning for how to maximize events A two just how much you know about your business There points of the plan Purpose of In this section is found service being offered and whether it is a start up the first year start-ups or the includes a list of the bridge financing or so on It is not a way to separate the edited profile that appeared on Biography what kind of market there was fortheir However when he was in he did write his company made a profit in the neighborhood partner could provide a version of BASICfor the mother His mother anxious to get her investment back competition He then explained that they had a software With great luck they found a computernerd is one of many writers to idea banks are typically risk-averse andtend to deny venture financing entrepreneur must turn to the realm of OPM financing The venture capitalmarket is divided into the most basic SEED CAPITAL usuallyvery large they are the most difficult with these plans the entrepreneur's financials are This refers to capital that is used to a bare bones basis Investors expect these equity FIRST STAGE FINANCING These funds theirinitial funds and still have a strong' story and probably more reasonable However first stage a businessthat is successful and new money will be used to maintain arealways limited to companies that phases of planning a private placement The business plan for capital there is since the company facts regarding the operations of time to assemble The process requires many hours ofassistance set forth objectives and rules and growing businesses toraise capital from private investor is any one investor with a of the offering RULE Highlights of of nonaccredited investors is but there are Rule or Section of the act A disclosure requirements no limit on the number of purchasers and bythe offering company the securities being liability provisions of anyof the federal or state Snapshot Two Michael Dell This is the edited profile built computers from cheapsurplus parts made savings he didn't haveto approach venture capitalists for have shed million jobs in the past years the overall succeeded There is no knowing for sure is vitally important In the absence of years is vague about one aspect ofrisk reward Specifically screwed over and losing the business thatthey will be formedin the next decade than increasingreliance on the Internet for industry and commerce the the coin is seldomexplored and in the article x x x Gross Return Net Return He comments to start something alone may be and an economic reward structure well beyond what corporations or far outweigh the value of task however of raising money the entrepreneur is well advised aconsistent activity in any business Works relationships Academy of Management Review Jan Dorsey David The Many programs at universities nationwide have capital hungry business owners R Venture Capital Made Easy skittish about lending to entrepreneurs Start-up companies are forced to The European May Michael Dell Profile Biography A E Business Review Nov Hundred richest Americans were first-generation millionpeople every year decide to that they would never get working for capital-backed start-ups are an importantsource of innovation and of all initial public offerings in the Apple Computer Oracle Intel Federal large body of literature that seeksto deal with the Cable and Shane In this analysis an entreprenurial venture Part will analyze towhat extent an BillGates founder of Microsoft and people opportunity context and the are five reasons why an piece of it The completed plan operations The completed plan will help communicate the business ideas forces the entrepreneur to look at the futureoperations of the rates among new businesses which are basedon a areprepared for it or not Everybusiness is involved in the tasks of making decisions and and as a result you manage will besurprised how much easier the Introduction Summary This states the facts of the business e performance tool request for financing including type LLC Sub S the industry retail service one sentence bullets that start with the word include sales production profit margin Usage State whether the loan plan must demonstrate mastery of the final analysis the only one being fooled is Microsoft it wasdoomed according to entrepreneurial theorists boring In addition Gates was shy awkward nervous stuttered and formed a companycalled Traf-O-Data which analyzed city traffic Altair a build-it-yourself kit thatcould be built for With Gates and Allenmoved back to Seattle and from IBM andexplained that their company was going to specialize to race back to Seattle for borrowed from mother again andrenamed the software personal savings and or family and the entrepreneur must first show evidence was made that it is importantto mention both andhow they relate to the business plan Matthews Below is documenting the business plan for the creationof prototypes bench models thesesections that the key to achieving each one entrepreneur is with spreadsheet programs buy the needed software program Start the company into a position of relative stability Start upfunding sales This capital is usually that therehas been some positive operational information generated exit strategy built into the plan SECOND STAGE These funds level banks and institutions sometimesenter the picture as the for big capital expenditures such asbuilding new interim financing for a company thatis and the issue of various types and categories of aftermarket support and also has to completely make full disclosure D OFFERINGS As suggested by the above statements registration documents entrepreneurs turn to a Reg entrepreneurs Offerings that are exempt under Rules and have of accredited investors but the number of nonaccredited investors may its investorswith a questionnaire subscription agreement Very during the preceding month period under the total dollar amount of securities sold during the states of Montana and Alaska which have no are exempt under Rule are relatively simple toprepare which reduces The exemptions from registration provided by Regulation D do notinclude the misstatement or omission offacts that freshman Michael Dell decidedto eliminate the middle man and sell his business model is almost identical to his first start off this section with another quote bySahlman We live and Microsoft Each of those companies it thoroughly and candidly addresses the ingredients of success people be called indispensable Sahlman Curiously however Sahlman who he seeks Talk to most budding entrepreneurs the rule Dorsey writing extensively about the nature wealth will be generated in record time by virtue a challenging inside look at venture capitalfrom the Typical breakout of VC portfolio performance per Item Bad an attractive deal for entrepreneurs Those who lack many of the technological and business skills necessary for grows he or she can still if the entrepreneur is able to understandthe rules and a business plan isnothing more than a plan of com Cable Daniel M Scott Shane A Prisoner's The Economist July Evanson David R Grover Mary Beth Go ahead Buy the dream Bankers Private Investors and Other Sources New York Tribune July D Matthews Peter Venture forth for a July Something old something new The Economist Feb Zider Bob If this paper is not what you are looking for, you can search again: Search for: or Click here to request an essay written just for you.