Lesson 1: Finance

The fact is, it costs money to start a business. In this lesson, we’ll explore two different approaches to raising that money to get started.

Bootstrapping

The term bootstrapping appears to have originated in the 19th century. Whatever its origin though, the term refers to starting, running, and maintaining a business without taking outside money.

The Chicago based company, 37 Signals, champions bootstrapping as they themselves bootstrapped their company early on. They even feature a section on their site, called “Bootstrapped and Proud” which features companies that bring in over a million dollars in revenue annually, didn’t take VC money, and are profitable.

Check out the page and examine one of the companies featured on the site:

After you check out one of the businesses, create 3-5 slides (in Google Slides) that:

  • Introduces your company
  • Describes their main product(s)/service(s)
  • Examine the company’s values or lessons learned by bootstrapping

Raising Money

Some businesses simply require more money than any one individual could ever supply bootstrapping. Equipment, infrastructure, personnel, expansion: all of these things add up quickly and significantly. In this part of the lesson, we’ll watch scenes from the hit show Shark Tank and examine the (sometimes endless) debate over money and equity.

  • Equity: the portion of a business divided amongst shareholders

As you watch the scenes, decide whether or not you think the “Sharks” were being too greedy, or if the company owners got a good deal.

Crowd Funding

In recent years, a new financing option has emerged on the scene called crowdfunding. In this model, businesses, projects, products, and ideas are funded in advance by a large pool of supporters. Visit one of the links below, find a project, and be prepared to share it with the class.

Requirements

  • Be prepared to share your campaign with the class
  • Determine if you think the campaign will be successful – why?
  • Be prepared to explain why crowdfunding is less risky, in this instance, than other forms of funding

Divide the Pie