Mid-Semester Workshop and Financing Overview

Workshop Participation and Engagement

• Importance of active participation and engagement in workshops:
  • First engagement marks to be released after mid-semester break (likely Sunday).
  • Participation affects overall workshop marks; simply attending without engaging results in zero participation marks.
• Upcoming discussions on workshop performance and how to improve.

Quizzes and Academic Integrity

• Quizzes are essential for learning material; average scores are improving.
• Six references required for assignments using Harvard referencing style.
• Emphasis on using academic sources rather than non-scholarly ones (e.g., avoiding Wikipedia).
• Risks of breaching academic integrity by failing to reference properly; could lead to academic investigation.

Peer Evaluations

• Issues with peer evaluations in the MyUni system; extension for submission will be announced soon.
• Not completing peer evaluations can result in losing 30% of group marks; no exemptions or extensions available.

Financing the Business

Debt vs. Equity Financing

• Debt Financing:
  • Borrowing money to achieve business objectives; requires repayment.
  • Security (collateral) required typically; personal financial stress if repayments not manageable.
• Equity Financing:
  • Selling a portion of the business; no obligation to repay funds like debt, but involves sharing profits.
  • Risk of losing control if partners have differing visions.
  • Relationships with equity partners vital; choose investors wisely who align with your business vision.

Key Advantages and Disadvantages

• Debt Financing:
  • Advantage: Maintain full ownership of the business.
  • Disadvantage: Debt must be repaid with interest, can burden personal and business finances.
• Equity Financing:
  • Advantage: No repayment requirement; investors benefit from business growth.
  • Disadvantage: Equity dilution; may lead to conflicts between business partners.

Relationship Management in Equity Financing

• Like personal relationships; importance of compatibility in business vision between partners.
• Common mistakes:
  • Engaging partners with only ideas, not financial investment.
  • Mixing personal and professional relationships can lead to complications and failures.

Combining Debt and Equity Financing

• Hybrid approach can balance risks associated with full debt or full equity.
• Properly structured arrangements can lead to effective financing solutions without overburdening operations with debt repayments.
• Good to use a combination of equity for project development and debt for short-term needs.

Additional Considerations in Finance

• Key elements in negotiating loans:
  • Interest rates, loan terms, repayment schedules, covenants, and collateral (security).
• Understanding balance sheets: assets versus liabilities, classifications of current and non-current debts.

Types of Financing Sources

• Personal savings, family, business angels, venture capital firms, bank loans, crowdfunding, IPOs.
• Consideration of the impacts of financing on company’s growth and financial health, especially return on equity.

Mike's Bikes Case Study Insights

• Importance of return on equity as a key performance indicator.
• Differentiating between good and bad debt:
  • Good debt generates income.
  • Bad debt drains financial resources without returns.
• Encourage wise use of debt within business operations.

Final Notes and Next Steps

• Review reflection journals and participate actively in upcoming workshops.
• Follow announcements regarding peer evaluations and other essential updates as they arise.