Source Based Questions - Resource Mobilization | Entrepreneurship Class 12 - Commerce PDF Download

Question.1. “One of the most critical resources or enablers for start-ups is funding. As founders develop their idea into a proposition, they must have early endorsement from customers, either with some successful pilots or assurance to buy. This  proposition now needs to quickly convert to a product or service embedding the early user/customer feedback.
The founders have to start building a business with a sales and delivery team, vendor network, and operational and logistic processes, and build the requisite infrastructure for seamless delivery, which will all together should build the revenues. But to get all of this done, the company requires funding.
Most entrepreneurs have by this time consumed the “FFF” (family, friends and faith) monies. It is then that they approach early investors.”

1. Identify and explain the source of investment stated in the above article.
2. Give any four features of the source of investment identified in (1).

Angel investors are the source of investment stated in the above article.
These are the affluent individual who provide capital for a business start-ups and early stage companies using a high-risk, high return matrix usually in exchange for convertible debt or ownership equity. Features:

1. They are current or retired executives, business owners or high net worth individuals who have the knowledge, experience and funds.
2. They bear extremely high risk and expect a very high return.
3. They provide proactive advice, guide about industry connections and mentor start-ups in its early days.
4. Their objective is to create great companies by providing value creation.
5. They have a sharp inclination to keep themselves abreast with current developments in a particular business arena.

Question.2. “In 2011, Rehan Yar Khan and Anupam Mittal came across an “interesting” investment opportunity:
An online marketplace for cabs and car rental services. To them, the model made perfect sense in India where commuters are constantly seeking convenient travel options. Khan and Mittal together invested nearly ₹1 crore in the venture.
Three years later, in the startup’s latest funding round in October 2014, where it raised $210 million from Japan’s SoftBank Corp. and others, Mittal’s minority stake offered returns most investors don’t dare to dream of. His investment is worth around ₹ 25 crore now, an increase of 40.7 times. Of course, the start-up being discussed is Ola Cabs.”
Which type of investors Rehan Yar Khan and Anupam Mittal are? Explain any four features of these type of investors.

Angel investors are the type of investors Rehan Yar Khan and Anupam Mittal are.

Features:

1. They are current or retired executives, business owners or high net worth individuals who have the knowledge, experience and funds.
2. They bear extremely high risk and expect a very high return.
3. They provide proactive advice, guide about industry connections and mentor start-ups in its early days.
4. Their objective is to create great companies by providing value creation.
5. They have a sharp inclination to keep themselves abreast with current developments in a particular business arena.