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Sources of Working Capital

Sources of Working Capital. Agenda Customary Methods Basic Types Considerations “New” Method What is it? Overview Comparisons How does it Work? Basic Types Requirements Examples Sources. Customary Methods. Equity Financing Debt Financing.

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Sources of Working Capital

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  1. Sources of Working Capital

  2. Agenda • Customary Methods • Basic Types • Considerations • “New” Method • What is it? • Overview • Comparisons • How does it Work? • Basic Types • Requirements • Examples • Sources

  3. Customary Methods • Equity Financing • Debt Financing

  4. Considerations • Equity Financing • Equity Partners • Controlling Interest • Shareholders • Company Ownership • Debt Financing • “loans” • Collateral • Debt service payments

  5. “New” Methods • Uses Social Networks • Virtual process • Universal appeal (national and international) Crowdfunding, or Crowdsourcing

  6. Crowdfunding What is it? • Similar to pier-to-pier lending, but you do not know the other individual • Someone gives you money with no obligation on your part to pay it back! • The supporting community is asked to support the project

  7. Overview • A Million High Fives, the largest electronic supply and volunteer drive in America. • Out-founded by Crowfunding by a 3:1 ratio over the past three years. • Has been around for at least six years, gaining in popularity exponentially. • Many new facilities have surpassed $10M funding in first year of operation • At least 11 reputable sites • Over $20B successfully funded in the past eight years

  8. Traditional vs. Crowfunding Sources Uses

  9. Traditional vs. Crowfunding

  10. Traditional vs. Crowfunding

  11. Traditional vs. Crowfunding

  12. Traditional vs. Crowfunding

  13. Traditional vs. Crowfunding

  14. Traditional vs. Crowfunding

  15. Traditional vs. Crowfunding

  16. Traditional vs. Crowfunding

  17. Mr. Entrepreneur …. Sources Uses

  18. How does it Work? • Publish a project • Does not require comprehensive Business Plan • Establish $$$ needed, and timeline • Offer reward • Collect funds meeting or exceeding target • An Assurance Contract returns contributions

  19. Why it Works • Voluntary Contribution based on project support • Reward Driven or Revenue sharing – no need to release financials • Multiple uses • Integral part of social commerce

  20. Basic Types • Project Based • Definitive start & end period • Music, Films, books, fund raising, construction, exploration, trips, research, etc • Enterprise • Start-ups • Operations • Product development and roll-out • Working capital

  21. Basic Requirements • Project • Rewards • Special offers (no discounts) • Limited offerings • Enterprise • Revenue sharing

  22. Examples Kickstarter.com

  23. Examples WickedStart.com

  24. Exposure • At least one (1) Tweet every ten minutes on projects • Facebook universe • LinkedIn groups

  25. Partial List • Rockethub.com • Profounder.com • Peerbackers.com • Kickstarter.com • Indiegogo.com => for film or music industry • Quirky.com => for inventors • Invested.in.com

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