Please respond to this discussion

Table 10-3 provides a number of alternatives for funding a start-up.

• Debt: Loans from financial institutions, vendors, friends and family/ Debt provides cash in hand for an entrepreneur. However that cash comes at the expense of interest. Interest with a bank will almost certainly be cheaper than that of a short-term lender such as a payday loan or even breaching repayment terms with a vendor, but the bottom-line what is ever borrowed must be repaid and then some. Assuming the revenue generated exceeds the cost to generate the revenue a loan could be wise.
• Equity is another popular choice. By selling equity in the company an entrepreneur can raise capital without the drag of having to pay back a loan. The flip side is that giving up equity means the company has the burden of creating value for their shareholders. Shareholders have a seat at the table and have a say in how the company is run. Giving up equity means giving up autonomy, which can be a tough pill for an entrepreneur.
• Self-financing: In this case the entrepreneur uses their own capital to fund the business. Using personal capital when starting a business ensures that an entrepreneur has complete autonomy, and is free from debt and interest. There are a few considerations. First, the entrepreneur needs to have the capital at their disposal when they need it. For many this can be an issue. Second, there is inherent person risk, if the business were to flop then the entrepreneur faces greater losses as they are now out personal capital or as I like to call it, savings.

My preference would be to use a mix of self-financing and rewards based crowd funding. I would do this by using personal capital to develop my prototype and then use a platform like Kickstarter to seek funding. Funding raised through platforms such as Kickstarter allows an entrepreneur to reach a wide audience, better understand demand, and get immediate feedback as they design, prototype, manufacture and support the product on a smaller scale. Ideally, a Kickstarter campaign would be enough to finance growth, but in reality it would more than likely be enough to understand product viability before seeking debt or equity funding.