Options to Help Finance a New Business

January 07, 2022

Learn more about where to get financing during the early stages of a new business.


Transcript

Jordan Amin: What are some options I have to help finance my new business?

Capitalizing a company is probably the toughest thing an entrepreneur has to do, especially when you just have an idea and you don't have a lot of money to support that idea.

Probably the first thing you want to go to is friends, fools and family - sometimes the most difficult money to ask for.

It’s a very hard thing.  It may be it's easy to ask Aunt Sally to write a check for you if she can afford to do so, but it's really difficult to go back to Aunt Sally and tell her you lost all her money on your great idea; it's not a great way to build family relationships.

There are several sources of money available to early-stage companies: there are friends and family as I just discussed.

There are also angel investor groups - there are a lot of professional and angel investor groups have been established where groups of high net worth individuals come together to invest in companies.

There are also institutional seed stage investors, which are early-stage venture capital funds that look to invest in seed stage companies.  Their investments can range from a couple hundred thousand dollars to a million dollars or more.

About Jordan Amin

Jordan Amin is an EisnerAmper Tax Partner with a blend of expertise in tax, auditing, financial planning and forensic accounting. From tax planning to successful exit strategies, he advises the owners of closely held companies.


More in This Series

Understanding the Financial Closing Process

Standard policies and procedures for closing the books is essential in creating comparable month over month reporting. Learn what to consider when constructing a formalized quarterly and annual financial closing process.

How to Find Investors for Your Business

Looking for quality investors for your new company is a challenging task. Learn how to utilize your existing network to be at the top of an investor’s mind.

Starting Your Business as a Sole Proprietorship

Discover the considerations and challenges when starting your business as a sole proprietorship.

S Corporation vs. C Corporation: Breaking Down Different Tax Requirements for New Corporations

Choosing the entity type of your new business can be complex and overwhelming. Learn the differences in tax requirements and qualifications and see which is the best fit for you.

Operating and Managing Your Business to Minimize Your Tax Bill

Accurate and thorough recordkeeping can save your business a lot of time and money. Discover the key areas a knowledgeable tax professional can advise you on in this new tax environment.

Tax Exit Strategies When Selling Your Business

Keeping good books and financial statements can help you to secure a deal when selling your business. A qualified tax professional and advisor can help you perform the due diligence required prior to a successful sale.

Internal Controls for Inventory, Equipment and Assets

There are many important procedures to consider when setting up internal controls for your new business. Learn more about how detailed recording and periodic checks and balances can help you avoid discrepancies.

Libor Rate Changes and the Future of Your Business

An explanation of plans to phase out of the LIBOR rate, and the important discussions and actions you need to take now to prepare your business.

Going Concern and How It will Impact Your Financial Statement

A spotlight on going concern, and the steps to follow when evaluating your small business and its operating and commitment obligations.

Driving Success with Financial Management

Implementing an accounting system for your business will enable more success and profit maximization. Follow these steps to create a solid foundation for the financial management of your business.

Tax Considerations When Starting Your New Business

Starting a new business can be difficult and overwhelming, and filing your first tax return can seem daunting. Find out how you can make this process go more smoothly.

How to Have Good Internal Controls for Cash Disbursements

How can we have good controls over cash disbursements in a small to mid-sized Company? The first step is your vendor setup. You can go through similar steps for other risks you identify such as receiving invoices, payment approval, and payments.

What are the 5 Components of Internal Controls

Creating internal controls not only prevents fraud and loss of assets, but it also improves the accuracy of financial records and helps the business run smoothly.

ASC 842: Implementing the New Lease Standards

There are two types of leases under ASU 842, finance leases and operating leases. The criteria to classify a lease as finance or operating lease is similar to current lease standards, only less rigid, therefore requiring more judgement.

Revenue Recognition Standard ASC 606

ASC 606 applies to most contracts with customers with some exceptions.  This revenue recognition model is based on a control approach rather than a risk and rewards approach used in the prior model.

Finance a New Business

Learn where to acquire financing during the early stages of a new business.