Raising Capital Assignment Example | Topics and Well Written Essays - 250 words

Raising Capital - Assignment Example Underfunding is the major challenge facing new and existing business. Most entrepreneurs borrow enough money for setting up a business, but they lack extra cash to help in operations during the startup phase, when cash outflow is higher than the cash inflow (The Entrepreneurial Dialogues, 2015). The fit between the capital providers and the business seeking for capital is usually problematic. In most cases, there exist large disparity between the financial and the economic status of the business seeking capital and the requirements of financial options available to different funding groups. Some entrepreneurs submit applications that are not consistent with the funder’s mandate. Often, entrepreneurs who operate in highly saturated markets that make the differentiation hard approach funding agencies. The agencies find business in high-saturated areas unattractive since it makes it hard for entrepreneurs to come up with unique business opportunities The issue here is the length of time it takes to access the funding. Most entrepreneurs lack awareness about the procedure and courses of action involved in getting equity funding. The process in some institutions tends to be bureaucratic and heavily laden with red tape and protocols as funders endeavor to get confidence and assurance when granting the funds to entrepreneurs. The Entrepreneurial Dialogues (2015). State of Entrepreneurship in South Africa. Web. February 10, 2015. Retrieved from