ABSTRACT
This chapter addresses common misconceptions that many people have regarding financing entrepreneurial ventures. It presents an overview of the financing strategies used in small entrepreneurial ventures with modest growth potential and those commonly seen in high-growth, high-potential ventures. Financing can come through self-financing, debt financing, and equity financing. The type of financing used for a venture depends on the nature of its business model, the financial and nonfinancial aspirations of the entrepreneur, and the stage of the business in its life cycle. As the business begins to expand and enters the growth stage, the entrepreneur may seek additional financing to fund the need for permanent space, additional equipment, or significant working capital. Banks and other sources of debt financing will be more willing to extend credit once a business has a proven record of positive cash flow that can easily support the repayment of a requested loan.
