BET Quiz 3

Balance Sheet

snapshot of what you owe, earn and what it is worth

Equity Financing

sales of shares of stock in exchange for cash

Forms of equity financing

Semi Formal

Angel Investors

Venture Capital

Angel Investors

personal investment from rich people

Venture Capital

professional investors looking for aggressive growth

Convertible debt

short term loan that converts to equity when conditions are met

Debt financing

borrow money pay back with interest

Revenue Model

part of business model that identifies how the company will earn revenue and generate profits

Accounting

documenting past performance

Finance

Creating projections of future performance

COGS

total direct cost of producing a product/service

Operating Expenses

cost of running the business not directly tied to production

Income Statement

shows revenue, costs, and profit by period of time

Cash flow

tracks the movement of cash into and out of the company over time

Liquidity

refers to amount of liquid( cash or equivalent) assets

Solvency

ratio of debt to assets

net worth

total assets - total debt

bootstrapping

starting business with sweat equity and saving/personal investments

Two things that you need for a business

Low cost

customer base

Net cash flow

What is actually in the bank

Runway

how long you can survive without adequate income while starting up and scaling