Week 8 Reading Reflection

Sources of Capital for Entrepreneurial Ventures

Ø  What was the biggest surprise for you in the reading? In other words, what did you read that stood out the most as different from your expectations?

a.       I didn’t realize there were so many ways to finance a startup company. Debt would be the first thing to hit my mind. It didn’t occur to me that you could relinquish some of your ownership as payment. Even though it is a good option compared to interest and loans, I’m not sure if I would be able to give up some control over a new company I was building.  

Ø  Identify at least one part of the reading that was confusing to you.

a.       I’m a little confused on IPO’s. I wish there were some examples of companies involved. I understand that it is raising capital through the sale of securities. Except, how does this work? What are the steps?

Ø  If you were able to ask two questions to the author, what would you ask? Why?

a.       Are all Angel Investors usually wealthy? I asked this because there are other ways to invest in companies that don’t need an unreasonable amount of money. There is an Angel membership for Naked Wines. It is forty dollars a month, and it’s like a piggy bank for you spend on any of the wines at any time. You can also get a free bottle of wine a month and other special deals. This membership helps fund startup wine companies. This reminds me of what an Enthusiast angel would be.

b.      Can you elaborate more on social lending? Who is behind this? Are these Angel investors owning these sites? The money has to come from somewhere. How do lenders know if an Entrepreneur is true to their word with social lending?

Ø  Was there anything you think the author was wrong about? Where do you disagree with what she or he said? How?

a.       While discussing venture capital myths, I disagreed with myth number five. I don’t believe that this was a widely known belief in the first place for the statement to be called a myth. Common sense would say that a venture capitalist would need a detailed and well organized plan. If someone is trying to make an investment in a company, then they are taking some level of risk. I doubt they would just want a summary of information. This would increase their risk. Given, this risk would surely be calculated. However, it is still a risk. With any risk comes information to help decrease this uncertain level, not increase it.