Consider whether the high use of short term sources of finance is because SMEs cannot get any other type of finance (because they are at the mercy of bigger players i.e. finance providers) or do they choose/prefer to juggle short term sources?
Is it reasonable to assume technology businesses will behave differently from (say) family business?
3. Due Diligence Failure and the opportunities that en sue.
Team recognise they are no longer able to manage the situation.
Management changes required for the business to survive and thrive.
Business will be required to raise extra financial resources from external sources and this may result in a change of ownership and moving control away founding entrepreneurs.
clear focus of direction is defined and resources are allocated and targeted to build a strong and sustainable core business.
The business then builds new competencies and competitive advantages into its business model. In a recovery situation there will be pressure on resources that are available and this is likely to create internal challenges.
New Team buys in competencies and diversifies into new products, services, markets and opportunities.
the amount of money needed from the beginning to the maturity of the project proposed, how the proceeds will be used, how you plan to structure the financing, and why the amount designated is required.
a description of the market segment the firm controls or plans to get, the competition, the characteristics of the market, and marketing plan (with costs) for getting or holding the market segment being targeted..
History of the Firm
a summary of significant financial and organisational milestones, description of employees and employee relations, explanations of banking relationships, recounting of major services or products the firm has offered during its existence.
Product or Service
a full description of the product, process or service offered by the firm and the costs associated with it in detail.
Individuals who own two or more businesses at the same time. Entrepreneurs building a portfolio of ventures may dispose of some of them over time thus introducing a serial element to their behaviour. Westhead and Wright (1998a)
Rather than becoming involved in further ventures as controlling owners, individuals use wealth from initial ventures to acquire minority stakes in ventures controlled by other entrepreneurs (business angel) (Scott and Rosa, 1996b).
individuals who own one business and have no prior business ownership experience as a business founder, an inheritor or a purchaser of a business. Westhead and Wright (1998a)
Novice Founders in this novice category may themselves at a later date become serial or portfolio founders (Hall, 1995).
Business support agencies provide financial, managerial and technical support and assistance towards new and existing businesses rather than entrepreneurs.
These agencies have encouraged individuals to make the transition from being nascent entrepreneurs (Carter et al., 1996), that is in the position of considering starting a business, to actually establishing new businesses (Reynolds, 1997).
Serial entrepreneurs who have successfully exited from their initial venture may generate funds to use personal resources to finance their subsequent venture(s).
Serial founders who have relinquished their equity stakes in previously owned businesses have no trading partners to leverage-up.
If serial entrepreneurs are not successful in their first venture, they may be able to raise funds, as venture capitalists seek evidence of an ability to succeed the next time around and not just previous experience per se (Wright et al., 1997b).
To achieve ownership of a larger business, serial entrepreneurs may purchase or buy into rather than establish their second venture.
Portfolio founders who have not exited from their earlier venture(s) may be able to lever up resources from the existing business and may make use of finance from existing customers and suppliers. Further, they may be able to lever up funds for a portfolio business from venture capitalists who (in the UK at least) appear to be reluctant to fund completely new start-ups (Murray, 1995).
Habitual entrepreneurs may also have developed more sophisticated skills in searching for finance.
The sources of start-up financed used by novice, portfolio and serial entrepreneurs with surveyed businesses, located in rural areas in Great Britain, were explored by Westhead and Wright (1998b).