Startups require a thorough understanding of the fundamentals of finance. If you are trying to convince investors or banks that your business idea is worthy of an investment, important startup accounting records such as income statements (incomes and expenses) and financial forecasts will aid.
Startup financials usually boil down to a single equation. You have cash in your bank or you’re in debt. Cash flow can be a challenge for small businesses. It’s essential to watch your balance sheet and be careful not to overextend yourself.
You’ll require debt or equity funding to expand and make your business profitable. Investors will be looking at your business plan, the projected revenue and expenses, and the likelihood of getting a return on their investment.
There are numerous ways you can bootstrap your startup. From obtaining the business card that has a 0% APR introductory period to crowdfunding platforms, there are many options. It is important to note that the use of credit cards or debt can hurt your personal and business credit score, and you should always pay off your debts promptly.
You can also borrow money from family and friends who are willing to invest. This is a good option for your business, however it is important to put the terms of your agreement in writing to avoid conflicts and ensure that everyone understands what their contribution will impact your bottom line. If you offer someone shares in your startup and they become an investor. Securities law applies to this.
https://startuphand.org/2023/04/30/the-different-stages-of-funding-in-venture-capital/
