ABSTRACT
This chapter examines how entrepreneurs approach common sources of funding and the inherent potential pitfalls. A common myth is that entrepreneurial ventures usually start with money from outside sources such as banks and investors. Some potentially viable business opportunities never get off the ground because the entrepreneurs behind them mistakenly postpone start-up while waiting for outside funding that never materializes. Using self-financing may also limit the entrepreneur’s ability to grow the business to its fullest potential. Beyond the entrepreneur’s own sources of money for a new business, investments and loans from family and friends are the most readily available source of funding. In some instances, it is the entrepreneur who rushes an infusion of cash from friends and family into the business. Family and friends can have many reasons behind their willingness to invest in an entrepreneur’s new business. The entrepreneur must take the time to fully understand the motivation behind any investment from friends and family.
