Sources of finance

What it is: Shares are when you give a specific percentage away to indivsiuals. 

Advantages:

• A share can create a large capital for the business,
• Shares are a long term of finance

Disadvanatges:

• If the amount of shareholders own more then the business holder they can lose control of their business.
• The more shareholders the less profit the owner recieves

Venture capitalists:

What is this: An investor who has the abiltiy to startup ventures by giving the business money in return for  a share, they can also aid a company in expansion.

Advantages:

• Can recieve mentoring
• The deal doesn't include interest meaning the amount they invest can't increase unless the VC decides to increase their offer.

Disadvantages:

• Can lose control of the business
• In order to make their money back a finacial agreement is usaully made, this can place pressure on the indivisual.

What is this: A loan is giving a grant of money, usually provided by a bank, the loan has to be paid back.

Advantages:

• Once the loan is paid you don't have to pay anthing else back or be associated with that bank.
• What you can spend a the loan on is flexiable.

Disadvantages:

• The interest on the loan can increase which means more money has to be paid back.
• Loans usually have to be paid back within a specific timeframe which can add financial pressure.