Problem
a) Describe some of the sources of capital available to entrepreneurs, and discuss how they correlate to the varying levels of risk involved with each stage of the venture.
b) What are the benefits and drawbacks of equity and of debt financing? Briefly discuss both.
c) If a new venture has its choice between long-term debt and equity financing, which would you recommend? Why?
d) Why would a venture capitalist be more interested in buying a convertible debenture for $500,000 than in lending the new business $500,000 at a 4 percent interest rate?
e) What are some of the advantages of going public? What are some of the disadvantages?