sources of financing

1. Sources of new
venture financing
HIBA SHAIKH
18S-MBA-BS-28

2. INTRODUCTION
Businesses need finances to run their operations.
Before starting any business an entrepreneur worry about where
they can get business financing to run the business smoothly
so there are some sources of financing options that would help the
business to run efficiently.

3. 1. PERSONAL INVESTMENT
When starting a business, your first
investor should be ‘yourself’.
use your personal savings or your
personal resources.

4. 2. FRIENDS AND RELATIVES
The most common source of debt financing for
start-ups is friends and relatives.
• The borrower gets easy approval.
• Amount received instantly.
• Flexible repayment.

5. 3. VENTURE CAPITAL
Venture capitalist investor/group of
investors who invest their money in other’s
idea.
Inject money at later stage of business,
when the business starts growing and start
reaping profits; in exchange for an
ownership of the business.
They invest Because the investors believe
that your business has long-term growth
potential.

6. 4. ANGEL INVESTOR
Angel investors are individuals who invest
their own money in small startups.
Inject money only at initial stage of
startup.
It invest and support when nobody is ready
to invest.

7. 5. BUSINESS INCUBATORS
Offer support for new businesses by
providing facilities such as training and
office space.
For example, Incubators provide such
assistance to the new businesses who have
potential idea but can not bear expanses
and they need space and skills to develop
and test their idea.

8. 6. GOVERNMENT GRANTS
The amount of money given by government for
specific purpose to any university, institute,
organization, small businesses or individuals to
support the idea that can benefit the society.
the recipient does not have to pay this amount
of money back to government.

9. 7. BANK LOANS
Money loaned at interest by a bank to a borrower for a certain period of time.
Banks looking for companies with a sound track record and have excellent
credit and a solid business plan.
The bank usually require that the business provides some security (collateral)
for the loan, although in the case of a start-up this security often comes in the
form of personal guarantees provided by the entrepreneur.
BANK
Entrepreneur

10. 8. SMEDA (Small and Medium Enterprises
Development Authority)
An institution of the Government of Pakistan
responsible to provide financial assistance to the
SME’s of Pakistan.
It encourage and facilitate the development and
growth of SME’s in the country.

11. ANY QUESTIONS