Objective:
Explain the sources and availability of finance to a start-up or growing business
Analyse the benefits of different types of finance and list the priority order to finance
Overview:
- What are the Different Categories of Finance?
- Discussion Questions
- Pecking Order Theory
- Case Study: 7Tin
Activity:
1.The session starts with slides which instruct the learner on the learning outcomes of the session and the core knowledge required
- Slides 3 – What are the Different Categories of Finance?
2. Class/group Discussion on benefits of different types of finance
- Slide 4 - Discussion Slide
3. Introduction to Pecking Order Theory
- Slide 5 - Pecking Order Theory Introduction
4. Introduction to 7Tin
- Slide 6-8 - Case Study: 7Tin
5. Play the case study video
6. Class/group Discussion on sources of finances and whether pecking order theory
- Slide 10
References:
- Slide 11
Session Material:
This session is designed to fit into a 45-60 minute session.
Skill Development
Key Takeaways:
- It is important to think about the different sources of finance and their implications.
- The finance needed is based on the business model, the industry and the scaling of the business.
- The sources of finance may change based on the location of the start-up.
As a facilitator, it is important that you allow them to explore various sources of finance and find the learning within that. This can involve team work with members sharing different view point which require support in developing.
Resources:
● Post-its or similar sticky pads ● Pens
References:
Brealey, R.A., Myers, S.C., Allen, F. (2008). Principles of Corporate Finance. McGraw-Hill/Irwin, New York.
Myers, S.C., Majluf, N.S. (1984). Corporate financing and investment decisions when firms have information that investors do not have, Journal of Financial Economics,13 (2): 187–221.
Frank, M.Z. and Goyal, V.K., 2003. Testing the pecking order theory of capital structure. Journal of financial economics, 67(2), pp.217-248.