Funding a new biotechnology firm Assignment Example | Topics and Well Written Essays - 1500 words

Funding a new bioengineering watertight - Assignment prototypeInitial Public Offering (initial offering) is the primary line of fundraising for the public limited companies only. Other sources of capital plunder be used by sole traders and partnerships. Debentures are special types of loans which are mostly secured. Apart from debentures, the companies tush apply for normal types of loans and leases. Government grants can be another option. However, the most famous and used source of fund for the new business concernes is the danger capitalists. The venture capitalists are firms which provide the new entrepreneurs with the required initial enthronement (Soderblom & Wiklund, 2006). According to Lebherz (2010), as middlemen in the financial industry, VC (venture capitalist) obtain funds or finance from the investors and then provide these funds to different entrepreneurs but is only available to the private organisations. The main aim of the VC is to ensure that at exit the o verall return is maximised, either by selling of the firm or by IPO and it often use to facilitate the process of internal growth. To a large extent, institutional investor including PE (private equity) is another rise for external finance. However, these entities pay off prior knowledge for the economic market and often take many precautions to begin with involving money in. POSSIBLE FUNDING OPTIONS FOR THE START UP BIOTECHNOLOGY FIRM Today, although labelled with fast-growing, biotech venture is avoided by a number of investors. In order to decide for the funding options for the start up biotech firm, it is better to study and explore the market trend in this regard. Different Technology Based weeny Firms (TBSF) have been able to achieve growth in the previous three years. Different research studies have shown that the Technology Based Small Firms are usually discouraged... After exploring and analysing the current market situation along with the funding history, it can be co ncluded that the existing financial and market situation has made it concentrated for the start-up business to acquire funds from the external sources and thither have been increasing financial gap. Apart from this there is increasing uncertainty among the entrepreneurs about the approval of the applications for funds. All this information and data implies that the new biotechnology firm should first go for internal sources of funds and the group of entrepreneurs should pool in the available money. Then, the remaining funds should be financed through the venture capitalists firms. Venture capitalists firms are ready to facilitate the new innovative business in the process of collecting required funds and finance. Also, these firms ensure a successful exit outline and provide the entrepreneurs with their valuable insights and opinions. As the venture capital cycle turns bigger and stronger in this way, institutional investors susceptibility be tempted in this new venture which ben eficial to further growth. In the third stage the biotechnology firms can go for Initial Public Offering.