www.startuphand.org/2021/12/17/financial-startup-basics-fundraising-tips/
Startups require a solid understanding of financial fundamentals. If you’re seeking money from bankers or investors important startup accounting records such as income statements (income and expenses) and financial projections will aid in convincing others that your idea is worthy of investment.
Financials for startups often are based on a simple formula. You have cash in your bank or you’re in debt. Cash flow can be a major issue for new businesses and it’s important to keep an eye on your balance sheet to ensure you don’t overexert yourself.
As a start-up, you’ll likely need to seek out equity or debt financing in order to grow your company and ensure it is profitable. Investors typically consider your business’s plan of operation including projected costs and revenue and the probability of a return on their investment.
There are numerous ways to help a startup get started, from getting a business credit card with a 0% introductory APR to crowdfunding platforms to help a new business. It’s important to remember that the use of credit cards or debt can negatively impact your credit score, both for business and personal scores. It is important to make sure to pay your debts on time.
You can also borrow money from friends and family members who are willing to invest. This could be a great option for your business, but you should always put the terms in writing to avoid any conflicts and ensure that everyone is aware of what the contribution will mean to your bottom line. In addition, if offer an individual shares of your business they’re considered an investor and that needs to be governed by securities law.
