Entrepreneurial finance is a term used to describe the financial concepts and theories that entrepreneurs apply in order to create, grow, and manage their businesses. These finance concepts may be applied by entrepreneurs for a variety of reasons including financing for expansion of an existing business into new markets or for seed money with which to start a new business.
Entrepreneurial finance according to Fintalent’s entrepreneurial finance consultants is a learning discipline of individuals who have an interest in investing, financing, and management of start-up companies. It is also the field that professionally facilitates the process and decision making for start-ups. Entrepreneurial finance professionals often perform due diligence before opening a start-up to determine if the project has sufficient resources to be successful. These professionals may work with entrepreneurs in various capacities such as providing business advice, assisting with financing options, or connecting entrepreneurs to legal advisors.
Start-ups require substantial development funding to bring their ideas into reality, so they are reliant on funds from outside sources such as corporations or venture capitalists. Entrepreneurial finance professionals can be instrumental in helping start-ups obtain these funds through a combination of various funding methods, including venture capital, debt financing, and equity financing.
The role of entrepreneurial finance professionals vary based on the specialization of the firm and the type of start-ups they work with. For example, financial advisors can help a start-up navigate through the various funding options available to them. If a start-up needs immediate cash flow to secure their business, they may turn to their entrepreneur client for loans or other forms of debt financing. Consulting firms may provide assistance with mergers and acquisitions (M&A), either on behalf of an entrepreneur or as part of their own portfolio. Lawyers are often an essential part of the start-up process by filing various forms with different state and federal agencies; this may include applying for patents, trademarks, or licenses.
Of course entrepreneurs also have other financial advisors such as tax professional, bank/credit union managers, or brokers to address general business issues that arise during their startup phase. Entrepreneurial finance professionals often can help in the areas of risk mitigation, valuation analysis, and strategy. For example:
Professional fields that assist entrepreneurial companies usually focus on one aspect of a startup’s financing needs; this is partly due to the fact many companies are trying to address the same set of issues at the same time. For example, a start-up might choose to work with a financial advisor for venture capital financing, a lawyer to help with mergers & acquisitions, and an accountant for the tax implications of their business. Whatever a firm’s needs are, Fintalent is a one-stop shop for all your professional needs as we have available for hire a team of expert professionals readily available for hire.
