An entrepreneur's ability to pursue an opportunity and turn the opportunity into a successful venture hinges on the availability of funds. Regardless of the quality of a product or service, a company cannot be viable in the long run unless it is successful financially. Funds either come from external sources (e.g., investors or lenders) or are generated internally through earnings. It is important for a startup to have a solid grasp of how it is doing financially. Please answer the following questions: What are the four main financial objectives of a firm? Why is it important for a company to focus on its liquidity? What special challenges do entrepreneurial firms have in regard to remaining liquid? What is the purposAn entrepreneur's ability to pursue an opportunity and turn the opportunity into a successful venture hinges on the availability of funds. Regardless of the quality of a product or service, a company cannot be viable in the long run unless it is successful financially. Funds either come from external sources (e.g., investors or lenders) or are generated internally through earnings. It is important for a startup to have a solid grasp of how it is doing financially. Please answer the following questions:

2. What are the four main financial objectives of a firm?
4. Why is it important for a company to focus on its liquidity? What special challenges do entrepreneurial firms have in regard to remaining liquid?
6. What is the purpose of a forecast? What factors does a firm use to create its forecasts of future income and expenses?
8. What is the purpose of an income statement? What are the three numbers that receive the most attention when evaluating an income statement? Why are these numbers important?
10. What is meant by the term working capital? Why is working capital an important consideration for entrepreneurial firms?
12. What is the purpose of a statement of cash flows?
14. Describe why a firm's sales forecast is the basis for most of the other forecasts.
16. What is the purpose of financial ratios? Why are financial ratios particularly useful in helping a firm interpret its financial statements? [MO4.1, MO4.2, MO4.3, MO4.4]

Part 2: The need to raise money catches some entrepreneurs off-guard, in that many of them launch their firms with the intention of funding all their needs internally. Commonly, though, entrepreneurs discover that operating without investment capital or borrowed money is more difficult than they anticipated. Entrepreneurs also sometime delay the process of raising funds because of the fear of relinquishing control of their venture. Entrepreneurs frequently have to strike a balancing act between keeping control and providing adequate funding. Please answer the following questions:

2. What is bootstrapping? Provide several examples of how entrepreneurs bootstrap to raise money or cut costs. In your judgment, how important is the art of bootstrapping for an entrepreneurial venture?
4. Describe the three steps involved in properly preparing to raise debt or equity financing.
6. Briefly describe the difference between equity funding and debt financing.
8. What is the purpose of an elevator speech? Why is preparing an elevator speech one of the first things an entrepreneur should do in the process of raising money?
10. Describe the nature of business angel funding. What types of people typically become business angels, and what is the unique role that business angels play in the process of funding entrepreneurial firms?
12. Describe what is meant by the term venture capital. Where do venture firms get their money? What types of firms do venture capitalists commonly want to fund?
14. Describe the purpose of an initial public offering (IPO). Why is an initial public offering considered to be an important milestone for an entrepreneurial firm?
16. Briefly describe the Small Business Administration's 7A Loan Guarantee Program. Do most start-up firms qualify for an SBA guaranteed loan? Why or why not?
18. What is a Small Business Innovation Research (SBIR) grant? Why would a firm want to apply for such a grant if it so qualified? [MO4.5, MO4.6, MO4.7]

Required Textbook

• Barringer, B. R., & Ireland, R. D. (2016).Entrepreneurship: Successfully launching new ventures (5th ed.). Boston: Pearson.

ISBN-13: 978-0133797190

Answer rating: 100% (QA)

Part 1 Financial Objectives and Analysis 1 Four Main Financial Objectives of a Firm Profitability Maximizing profits or achieving a satisfactory level of profit Growth Increasing sales market share an... View the full answer