Question

• Imagine you are an entrepreneur with a new idea and would like to start a business with your idea, but lack capital. Go to the U.S. Small Business Administration’s Website, located at http://www.sba.gov/content/sbic-program, and read about the Small Business Investment Companies (SBIC) Program. Also, explore the Website for information regarding sources available for providing venture capital. Provide an overview (two to three paragraphs) of your start-up company. In the overview of your company, describe its products, historical financial performance, major capital investments in the last five years, past sources of financing, and plans for future expansion.
• Analyze two sources that might be available to provide venture capital for your start-up. Compare and contrast the major advantages and disadvantages of one over the other. Select the source that you believe is a better fit for your start-up and justify your selection.

Please use quality research in your internet search. Cite your references.

Answer 1

Overview:

Name- Cinder-Ella

Products - Organic sanitary napkins at low creation costs for usage of the rural and the under-privileged section of the society. Sanitary napkins in urban areas from established brands cost much more than the daily earnings of an under-privileged family. so we have come up with a low-cost effective method of making such pads from organic sources which will also make them easily disposable.

Historical financial performance - The company, established in 2018, has started off from a meagre capital of Rs. 50,000. In the last year, we have managed to dispense pads to over 10,000 households.

Expansion plans - We now aim to establish ourselves as one of the leading sanitary napkin manufacturer in the urban area, using this very basic principle of organic napkins at lower costs. However, this will require a major revamp and stronger finances.

2 Sources of Venture Capital:

1. Crowdfunding- Crowdfunding is where numerous number of people fund money (usually small amounts) for a venture. It could be reward-based or through a share in equity. Debt-based crowdfunding, also known as crowdlending, has come up in recent times.

2. Bank Loans - One of the oldest and most prevalent method of obtaining venture capital.

Since this is a startup, I would choose an equity-based crowdfunding option for venture capital as cost of equity will be much lower than obtaining a bank loan which requires large interest payments and large collateral. Also, bank loans follow very stringent guidelines. Crowdfunding also allows us an insight into consumer mindset and allows several level-headed stakeholders to provide logical inputs to further the interests of the organisation.