12 good questions and answers: "Revenue models - Lecture: Sources of funds"

*Understand the two different types of capital and investment and their sources
  • Internal
    • Comes from the entrepreneur itself and the people surrounding
  • External
    • Equity
      • Investor
    • Debt
      • bank
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What to sell? --> What is price thermometer
  • Value
    • Incentive to buy
  • Price
    • incentive to sell
  • Cost
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How not to run out of money?
  • Stay lean ( dom more with less)
    • cost are in your control, revenue not
  • Know your numbers! Burn and runway
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What is Equity finance?
  • Owner sells a stake in the business for cash
  • The investor receives payback through a dividend or capital exit point
  • Sometimes get say in running the business
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What are 4 types of venture capital? Explain
  • Institutional venture capital:
    • invest by financial institutions 
  • Business angels:
    • investments by wealthy private individuals
  • Corporate venturing
    • Minority investment by large companies in small firms for strategic reasons
  • Public sector venture capital:
    • Investment with social or welfare aims, as well as financial aims
Report
What are 4 types of investment? Explain
  • Seed stage - prove the concept
  • Early-stage - test /pilot fase
  • Expansion stage -working capital
  • Later stage - stable growth
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How do VCs make a profit? Stated the 5 strategies

  • Initial Public Offering - shares for sale to public investors
  • Trade sale - entire firm is sold to another party
  • Secondary sale - sold to another VC
  • Buy bak -  repurchase of shares
  • Write off - no profit
Report
What are three other (alternative)  ways to sources funding?
  • Bootstrapping
    • e.g. Take preorders for a product, using funds generated from the orders to build and deliver. 
  • Crowdfunding
  • Government programs
    • free cash ( very competitive)
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What is the definition of 'revenue stream'?
A company's single source of revenue. A company can have zero or many revenue streams depending on its size.
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What is the definition of 'revenue model'?
The strategy of managing a company revenue stream and the resource required for each revenue stream.
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How to create sustainable value then?
Redefining the value proposition in the context of environmental and social issues may provide companies with new opportunities.
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What are the two revenue approaches?
  • Top-down
    • estimate market size
  • Bottom-up
    • Calculate basic budget per key activity
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