Financial uncertainty of a startup

Abstract

This article discusses the transformation of the system of attracting investments in startups. The process of finding an investor for a startup has had a difficult path of formation in recent years. An entrepreneur’s interest in different sources of investment is associated with determining their possibilities for implementing the chosen business idea. For various purposes, businesses need different types of investments: loans, credits, sale of shares or stocks. The search for an investor for a startup and their attraction is associated with specific requirements for an entrepreneur, which are practically not written about in the media and advertised. The article focuses on the types of finance involved in business. The issues of the difference between grant financing of a startup and the process of searching and attracting an investor are raised, since the requirements from the grantee fundamentally change the requirements for specialists who should be involved in the work and the requirements for maintaining the financial stability of an organisation. The authors also consider the professional platforms for investors that have developed in Russia and the forms of investment relations: in exchange for receiving a share of profits; in exchange for a share of the proceeds.

Keywords

• startup
• founder
• fundraising
• venture investor
• hybrid financing
• halal financing
• unit economics
• grant support
• private investor
• lead investor
• co-investor