The New World Financial Terms That Everyone Must Know
It is a fascinating marriage of finance and technology that has led to a new set of finance models wherein technology has brought together unknown individuals to work towards to a common business goal. The world has indeed become a global village where there is help for everyone who seeks, the only necessity is that they should know it is available and know how to seek for help. Several social projects are getting the backing of alternative finances and this is bringing in tremendous reform in various social and pressing matters of world significance.
Here are six terms that everyone must know.
- Angel Investors: Companies like Google have started with the help of angel investors. They are investors who put their money in a company in the initial stage itself in return for 20-25 percent returns on their investment. It is beneficial for the company too because these investors have the required strategic experience.
- Venture capitalists: Not all businesses and startups have the same risk profile. It is interesting to note that those which are the riskiest are also the ones with the greatest growth potential. The capital provided for such ventures is called venture capital. One can get up to millions of dollars in this form as funding and that can be used to grow the company. Since the investment is huge venture capitalists give a very short window of around five years to their startups to recover the money fully.
- Factoring: No business starts making profits from day one; there are several overheads that need to be cleared to break even leave an alone But to keep the business running bills have to pay. Here is where factoring steps in. This is a method finance wherein based on the actual invoices the investors will pay you. You, in turn, can repay back once the customer pays you. This keeps the business afloat and brings in new projects.
- Crowdfunding: Several investors are a pool in their resources into one single company. The terms and conditions of each of these sites vary. This is a quick and efficient way to garner finance and also test the market for the feasibility of an idea.
- Grants: If you are into a business that is academically oriented and science related you can seek grants from the Government itself. There are certain criteria that have to be met before funds are released.
There are a few other methods of generating income too if you are not in a hurry. The automated trading software is a great place to start; you can passively build your finances while you work on how to start a business. Check this link to know more about one such software.