B Financing If you fnd the venture attractive and feasible, it is time to fnd out how much money the venture will need in start-up capital (also called initial capital or seed money). The general headlines here are:

Capital needs = investments + other initial costs

(a) What kind of investments do you foresee in the juice venture before opening? What kind of other pay-outs can we expect before the cash begins to fow in?

(b) Estimate the monetary need for start-up capital following from your thoughts in (a). Sort them after the general schema given in the book (p. 215). Use your home currency.

Sum up the need for capital to start the business.

(c) Where do you expect to raise this capital from? Consider the main alternative sources in this early stage:

Owner’s capital injection:

Loans from bank:

Loans from ‘friends’:

Suppliers credits:

Other:

Allocate the need for capital found in

(b) to the sources in (c).

Is the need for capital

(b) in balance with your access to capital (defcit or reserve)?

(d) What options do we have if we fnd a defcit in (c)?

(e) Capital-light start-ups are en vogue, do more with less capital!

(Capital investor, 2020)

With a nod to the above quotation, we ought to give the crucial cash fow one more thought. So, do you fnd this juice business to be ‘capital light’, meaning having a favourable cash fow and low demands for vast investments?

Which parameters are in play here and how do they infuence your capital need?

Explain your arguments in terms of the revenue that comes in, capital needs, the gross margin and capital needs.