Топики 2 курс / Money (общий по 2-м темам)

Money

Investment is very important nowadays, because there are only two ways to make money in our modern world: by working, for yourself or someone else, and/or by having your assets work for you. If you keep your life savings in your back pocket, instead of investing, the money doesn't work for you and but investors generate money by earning interest on what they set aside or by buying assets that increase in value.

There are three key areas to raise money nowadays if you’re an entrepreneur.

The first is bank debt. If you’re an entrepreneur starting a business for the first time, then often bank debt is not an area which you’re going to find very successful – mainly beacsue, if you’re a start-up business and you an inexprinced, the banks won’t want to lend to high-risk business.

The second area is a private investors or business angels. They want to invest in high-risk and high-return business, so they have dicided not to invest in the stock market which is large, lower-risk, but to really take up an opportunity to make ten times their money by investing in start-up businesses.

And the third area is venture capital. Nowadays it’s only appropriate if you are looking to raise more than a million pounds. If it’s less, then you need to go down the private investor route. An example off a venture capitalist in the UK is a company called 3i.

So, if you’re an established business looking to raise money then the bank debt route is probably the most appropriate. If it’s under a million pounds then it’s private investors, and if it’s over a million punds then it’s venture capital.

One of examples of a really good business proposal is given by Hugh Campbell. It was founded by students of Oxford University and they have a lot of intellectual property, so they have a lot of competitive advantage. Moreover, this business is focused on developing software for the computer games industry. The computer games industry has growing very strongly and will continue to do so. In addition to that, although management team was very technically strong, they didn’t have a lot of management experience, the investor decided to invest a million pounds and the first thing they did after investing was to hire a commercial director to run the company alongside the two founders with technical background.

As a conclusion, I want to say that it is important to know about key areas to raise money nowadays and to know about differences between them. In addition to that, if you are a business owner, you should read about good business proposals and about its competitive advantages. If you follow all of these recommendations, your business will be successful.