• Identify sources of funding for businesses
• Understand the difference between borrowing in the form of bonds compared to bank loans
• Understand the difference between private and public corporations
• Define stock
• Understand how businesses choose between different sources of funding

Early-stage investment

You can view the transcript for “What’s the Difference between Angel Investors and Venture Capitalists (VCs)?” here (opens in new window).

Reinvesting Profits

Out of all the sources of financial capital, this one is the simplest. Substract your expenses (all the money you need to spend to run the business) from your revenue (all the money flowing in from doing business) and if you have a positive number, that is your profit. Take that profit and put it towards your expenses and you have now reinvested your profit. Your business benefits without having to rely on a lender or investor.

Borrowing

The Perils of Bank Borrowing

You can view the transcript for “Loan Covenants | Definition, Types, Uses, and Covenant Breaches” here (opens in new window).

Issuing Bonds

You can view the transcript for “Bonds (Corporate Bonds, Municipal Bonds, Government Bonds, etc.)” here (opens in new window).

Going Public with an IPO

You can view the transcript for “Initial Public Offerings (IPOs) Explained in One Minute” here (opens in new window).