Funding a Business Venture Assignment Example | Topics and Well Written Essays - 500 words

Funding a Business Venture - Assignment Example h Parker’s funding comes with its pros and cons, Wolf found it as the preferred source, considering financing risks and possible help he could get for the promotion of tracker. Investment banking matches the needs of those who have money and those who need it (Wise, 2006). And investment bankers, such as Goldman Sachs, raise capital by underwriting securities or working as an agent to issue them. They also assist their clients with acquisitions and mergers as well as other ancillary services. Their significance lies in their ability to finance huge projects and help their clients with acquisitions and mergers. Stock market facilitates the buying and selling of shares (Fontanills & Gentile, 2001). Shares of those companies that are listed in stock exchanges, such as New York and London, are traded there. Stock market is one of the best sources of raising capital and spreading the company’s ownership widely. McLaney says risk is an important element of all financial decisions and must be considered (2009). Risk financing relates to managing funds for unexpected losses to the company. It is important to make provisions for weathering unexpected losses. Start-ups face more uncertainties than old ones about market, sales, competition, cost of production, and failure. Funding a start-up business is a major challenge. Gary Wolf, a former junior scientist with the General Electric (GE) with several minor but useful inventions under his belt, came to know about it when he wanted to start his own business, Tracker Co., to develop and sell a tracker. The tracker would help viewers to track and record television programs that met the pre-designated specifications, when the viewers were away from television. While recording, the device would skip too violent or sexually explicit scenes. After carefully considering all options, Wolf decided to get funding from a business angel. Wolf needed $50,000 to start. Out of this, $40,000 was necessary to set up a laboratory to