Answer to Question #236699 in Management for Feruza

Question

According to research, 82% of the start-ups were self-funded whereas 41% were funded by loans and lines of credits.

Take an example of a startup you want to establish. What source of funding shall you opt for and why?

Answer 1

New firms based on entrepreneurial effort are recognized globally as the key engine of wealth and employment creation. Numerous university programs and courses aim at betterment of conditions for entrepreneurial activity among their students. Reflecting the quote above their mission is to identify potential students for entrepreneurship and add to their skills to perform in entrepreneurial context. There is also an ample array of research looking at the efficiency of such programs in what comes to the amount of new businesses created and improvement in e.g. entrepreneurial thinking and mindset Parallel to the overall interest in entrepreneurship and its education, startup has become a common word across nations, regions, cities and universities in them. In comparison to any new enterprise, a startup operates in an environment of utmost uncertainty, but also in an environment where there is a potential for rapid growth and internationalization due to scalability. As Aulet and Murray (2012) pointed out: “Not all jobs are created equal … Unfortunately, many small businesses employ the founder and spouse or just a handful of workers. These companies create jobs, but typically provide lower-than-average wages and benefits. Contrast these companies with the innovation-driven enterprises who seek to address global markets—offering goods and services based on substantial innovation linked to an understanding of a specific market.”