ABSTRACT
Chapter 10 discussed using what are generally considered internal sources of funding-the entrepreneur’s own funds, and money secured from family members and friends. Funding from the entrepreneur, family members, and friends can be structured as either debt or equity. Chapters 12-14 examine external sources of funding through either debt or equity. Debt financing, the topic of Chapter 13, involves a contractual, temporary use of funding provided by an outside person or entity. Debt creates an obligation to repay the funding provided to the business. Equity financing, the topic of this chapter and Chapter 14, creates a more permanent relationship in which ownership interests are transferred to the person or entity providing funds.
