Chapter 10 Case Activity
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1)
Based on the material covered in the chapter, after reading the case study “
Ch10 Case Activity - Lumo Body Tech.pdf
Download Ch10 Case Activity - Lumo Body Tech.pdf
”, what questions would you ask the firm's founders before making your funding decision as a potential investor?
You should ask, “What are the costs?”. You could also ask, “What are the margins?”. Another good question to ask is, “Have you got any customer feedback? And if so, what is it?”. The very important question to ask is, “Have you talked to your customers? And is there demand for this product?”. You also should gauge how passionate the business is.
2)
What funding source does the founder mention in the video clip and what factors of using that approach might help founders be more successful in raising funds? They raised funds through crowd funding. They did this through Kick Starter. An advantage of crowd funding is you typically do not have to share equity in crowd funding. You do not have to pay the money back for crowd funding. You can also gauge how much demand there is for your product.
3) How would you go about funding a startup like Lumo Bodytech?
I would use crowd funding. I would also use family and friends. I would use my own money, and as a last resort I would look for angel investors. I must understand though I must give up equity to an angel investor.
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