Advantages And Disadvantages Of Startup

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There are many perspectives that a startup needs to focus on, such as product, price, place, and promotion. All those things are associate with one thing: money. With enough fund, a startup can develop and test their products multiple times before release to the market, they also can spend more money on advertisement and promotion to let more customers know what their product is and how good they are. It also can use the fund to develop more distributors and get a chance to sell more products than its competitors. Most importantly, if the startup gets enough funds, then they can use the lower price strategy to earn as much market share as it could. In this paper, I will talk about both debt and equity forms of financing. First, the debt financing,…show more content…
The most common form of equity financing is find some private investors. There are two different forms for this one: angle investor and venture capitalist. For angle investor, the investor may provide one-time investment to help business development, or multiple investments to support the company through its difficult early stages. There are very good examples for this one, such as the founder of Airbnb, a business incubator organization called Y Combinator helped Airbnb developed the business with money and technological support. For venture capitalist, he or she or even an investment firm will publicly invest millions of dollars into very promising startups. A good example of this form is the NBA team owner Mark Cuban, also a successful venture capitalist, he will listen the idea of the startups and decide how much he is going to…show more content…
Other form of equity financing like crowdfunding is also popular now. There are many websites that allows startups to put their idea or product on the website with detailed introductions, and then they will set a goal for this crowdfunding, such as a hundred thousand dollars or even one million. Once they hit the goal, they will start their business production procedure, as a pay back, people who help an entrepreneur with the fundraising will get a discount to purchase the product or receive the product for free. This way can help an entrepreneur not losing control of the company, because they still own the company, the disadvantage is, the entrepreneur has to take the risk of their ideas may be stolen by competitors, because all the information is in
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