Question

refers to capital which enterprise occasionally does not need. At times the enterprise requires more and at times less capital

Answer 1

The capital amount which enterprises do not need occasionally is called venture capital. Venture capital is provided to small business organizations and start-up organizations. This capital is provided to small business organizations to ensure their long-term growth potential. However, enterprises do not need venture capital once it increases market debts for the organization. Moreover, several additional sources of resources are opened for the enterprise when it reaches the envisioned stage.

The times which enterprise requires venture capital more are as follows:

·       To cop up with the market competition: Startup enterprises need more this capital to maintain sustainability in tough market competition. To adopt the cut-throat challenge of competition, an enterprise requires more capital.

·       To expand the enterprise into the next stage: an enterprise requires more capital for strategical expansion. The strategic expansion includes requires a good amount of capital flow.

·       To create balance among finance, mentoring and networking: More capital is required to maintain balance among finance, mentoring and networking. This capital expertise knowledge base of investors.

The time when enterprise requires less capital are mentioned below

·       The time when the enterprise has attained the envisioned stage with a steady financial flow

·       The time when an enterprise is ready to adopt the merger and acquisition strategy

·       At a time when the enterprise has developed a steady consumer base with an assurance of a good amount of average revenue