For this assignment, using the same business concept you described in the Module 1 Assignment,

outline how you would propose to raise equity financing for the startup company. Just as in the
Module 1 Assignment, the concept does not have to be well-developed, and it does not have to
be something that you actually intend to pursue. However, if you do have a concept for a new
venture startup that you are pursuing, you may use it for this assignment. Specifically, answer the
following questions:

1. How much money do you think you will need to raise in order to launch the company? This
should not be the total amount of financing that the company will eventually need. It should
just include the amount you need to get the business up and running and to achieve initial
milestones. Please answer this question by indicating an appropriate range: 1) $0 to $50,000,
2) $50,000 to $250,000, 3) $250,000 to $500,000, 4) $500,000 to $2 million, or 5) over $2
million.
Answer: I will need to raise at least $ 500,000 to $ 2million to kick start my business idea in
module Assignment 1 which was to create a new business firm for City Garbage collection to
ensure a safe and clean environment.

2. How would you plan to spend this money in order to create value in the business? Please
indicate the percentage of the capital that you think might have to be spent to develop the
product, finance fixed asset purchases, finance working capital, and pay salaries and other
operating expenses. (100 words maximum).
Answer: I will firstly register my business as a limited company with Uganda Registration
Service Bureau then make a list of expected business expenses like overhead costs , fixed costs
like rent , operating expenses like transport , selling and distribution expenses , I will then create
awareness through direct door to door mechanisms where I will inform my customers about the
uniqueness in my garbage collection company then I will incur on Capital expenses like the
business trucks , garbage bags , and bins , business fixtures and fittings , computers for proper
record keeping. I will employ both permanent and casual workers who will help in the normal
business operations and growth I will finally set their salaries depending on one’s qualification.
3. What types of investors do you think you should approach to raise this capital? Explain your
thinking on this. (100 words maximum).

Answer:

1) Friends & Family

The first type of investor entrepreneurs should be approaching at the very beginning are
friends and family and close personal contacts. Since at the beginning of the business, there
is very little hard evidence and proof to base a real investment or funding on. So Friends will
essentially be investing in my business idea, friends and family will be will know to me and
they well know my capabilities.
 2) Banks & Government Agencies

Banks are trusted Investors and can be a great source of capital for example, the Traditional
banks Uganda like Post Bank Uganda is not easy source of capital for early stage startups and
small businesses. However, as I gain traction they can offer business credit cards, loans, lines
of credit and merchant advance loans. Also banks can provide some sought of financial grant
depending on the project like in Uganda we have youth projects boosting grants etc.

3) Angel Groups

Angel groups have become more popular and more organized. These are groups of angel
investors who band together to make investments in startups. This enables them to invest
with more confidence, with larger check sizes, and with lower exposure to risk.

4) Angel Investors

I will approached Angel investors for a seed round and beyond. They are always willing to
fund smaller operations than a venture capital, they may be more flexible in terms, and can
offer a lot of value in wisdom and connections.Angel investors can be approached directly
online, at live pitch events, and through introductions from other startup founders

Qn4. What percentage of the company do you think the investors might need to own in exchange
for their investment? What are the implied post-money and pre-money valuations? (100 words
maximum)

Answer:

I will talk about the Angel Investor who wants a return on investment of 20% to 25% of their
investment in my company however venture capitalists may expect a more than return on
investment.

Pre –Money refers to the valuation of a company or asset prior to an investment or financing. If
an investment adds cash to a company, the company will have a valuation after the investment
that is equal to the pre-money valuation plus the cash amount. So in my company it will be the
value earlier it start to obtain any investments, it will tell us the value of each share and the
current value of the company. Post-Money On the other hand, post-money refers to how much
the company is worth after it receives the money and investments into it. One has to understand
since they are very serious ideas in the business valuation process .