If the product sells, he will have to find money to increase manufacturing and distribution capacity. Each step in the process max require capital from a different source under different conditions. Successfully competing for capital involves two things. The first is understanding what sources of capital are appropriate for which projects, and at which stages within the project. And the second is developing a strategy to convince investors that your project is the best investment available.
Capital comes in two basic types.
It is either equity, meaning the investor has become a part owner, or it is debt, meaning the investor expects to be paid specific amounts of at specified times until an agreed amount has been paid. Equity is also defined as what is left over after all debts have been paid. Because of that, the equity holder generally has some say in how a company is run. Our basic belief is that there is a financial tool for every worthwhile proposal. The secret is to recognize what that tool is and how to use it.