You've spent time with Manuel and working with Manuel you've learned the basics of how to value a business. Now it's time to turn and look at what your financing options are for this business that you're trying to launch. We're going to get into a lot of details around alternative sources of financing and how they work. But before we jump in, I think there's a couple of important lessons to remember. When you're thinking about different sources of capital for your startup, there's really two critical lessons that you have to remember; first lesson is that a dollar is not just a dollar. From whom you raise money can be as important as how much money you raise. That's one lesson. The second lesson is that timing is everything. What do I mean by these things? Well, first of all let's think about the first lesson, a dollar is not just a dollar. Some investors can be important business leads that can help you build your business. They're providing more than just money. They're going to help you identify problems in the business plan that you have and they're going to help you solve these problems. So one thing that for example venture capital investors will do, is they will help you add people to your management team, people that you don't currently have working for you who are essential for the business to succeed. They may also introduce you to key customers, key suppliers without their involvement, the business wouldn't be as successful as it would be with their involvement. Now, those value-added services if you will, they end up costing more in terms of greater loss of control of your business, of giving up a bigger piece of the ownership of your business, and sometimes that's worth it, sometimes it's not. Some businesses are just not well suited to certain types of investors. So that's the first lesson. A dollar is not just a dollar, from whom you raise money can be as important as how much money you raise. The second lesson timing is everything. What do I mean by that? Well, different types of investors specialize in investing at specific points in the life cycle of a business. So for example, some investors specialize in very early stage investing. Other investors specialize in investing after a company has already crossed some of the initial hurdles that stymie most businesses, these later stage investors they're looking for different types of things and businesses and they're asking for different things in return. So that's one sense in which timing is everything. Another sense in which timing is everything, is that it takes time to build relationships with outside investors that lead to funding outcomes. Were used to living in a world where transactions happen quickly, you can click a button online and bam, you have a new credit card. That's not how entrepreneurial finance works. Funding decisions and entrepreneurial finance take a long time to occur. Sometimes you might spend a year or 18 months talking to outside investors before they actually provide a cheque. Another thing to remember is that because different types of investors specialize in investing at different points in the life cycle of a business, different types of capital providers are often compliments from one another. In other words, as we will see we will talk about angel investors. Having an angel investor is not a substitute for venture capital, it's a compliment for venture capital. The angel investor will often open the door to the venture capital firm that will lead to the later-stage venture capital investment. There's a final sense in which timing is everything and this is perhaps the most important. It's really critical that you raise the right amount of money at the right time. Its easy to understand how if you don't raise enough money you can't launch your business. But by the same token raising too much money too early can be deadly, and we'll see why. So with those two lessons in mind, I think it's important to look at the world in the following way. Imagine you're the entrepreneur, you're the circle in the middle. The question that you're asking yourself is, what is the right source of capital for me based on the characteristics of my business and where I am in the lifecycle of my business? You could think about turning to angel investors, you could think about turning to venture capital. Venture capital comes in a lot of different flavors. Some venture capital is provided by corporations that have separate venture capital investing arms. So you might think about a trade off between raising money from a traditional venture capital investor versus raising money from a corporate venture capital investor. Since we're talking about getting capital from outside corporations, corporate VC is not the only channel by which that can occur, you could also raise money through a strategic alliance. In other words, a partnership with an existing firm that might be a supplier to your business or might be a natural customer to your business. Strategic alliances are extremely common in certain sectors of the economy for example biotechnology. It's very common to see young biotech startups financed through strategic alliance partnerships with more mature pharmaceutical firms. Finally, banks are an incredibly important source of capital for entrepreneurs. So we want to understand as the entrepreneur thinking about entrepreneurial finance we want to understand what are the trade offs of choosing one form of financing versus another, and which type of financing is really best for me based on the type of business that I'm trying to launch. Another way to look at this decision is to think about it in terms of who and the what. You can think about the what as being what types of financing are you getting well. To boil it down to its simple as possible terms, you're either going to get debt or you're going to get equity. The way that debt or equity is structured is going to depend a lot on who you're getting it from. You could be getting capital from insiders, people who were very close to the business. These would be employees, friends or family, maybe angel investors. You can get capital from customers or suppliers. If it were debt, that would be structured as trade credit. If it were equity, that would be what we would typically think of as an alliance partnership. Then you could get money from a total outsider. If it were debt, you'd be talking to a bank. If it were equity, you'd be talking to a venture capital firm or someone that specialized in providing growth equity to business.