11 Sources of Capital

 Learning objectives

1.  To identify the types of financing available.
2. To understand the role of commercial banks in financing new ventures, the types of the loans available.
3. To discuss small business administration SBA loans.
4. To understand the operation of research and development limited partnerships.
5. To discuss government grants, particularly small business innovation research grants.
6. To understand the role of private placement as a source of funds.

OPENING PROFILE 11.1

Some entrepreneurs are born and others are created through focus, energy and desire. Scott walker is the latter type, developing his own lifelong learning curriculum in creating opportunities and taking risks.

   walker was born an Air Force brat his family was posted at stations across the country throughout his childhood. This training including six different grade schools and three high schools in three different states gave him the ability to get along anywhere to be comfortable with different types of people and to be self-sufficient.

   After receiving a BA from Utah state University in 1977, walker selected a graduate school that would initiate his career as an entrepreneur. Thunderbird school of global management provided an environment for learning how an interesting idea can become a business as well as exposure to the broader world as represented by student and faculty from around the globe. walker graduated in 1981 with an MBA.

   The banking world and its activity in mergers and acquisitions was walkers first professional stop. Based in Dallas, he centered much of his effort on the oil and gas industry, including working with T.Boone Pickens and his mesa petroleum co.

    After a number of years in banking with such firms as Lloyds Bank and GE Capital, walker noticed that many of the people he respected in this industry were leaving to work on riskier, more nontraditional and stimulating ventures. This appealed to him, so he searched for an established entrepreneur who could show him the basics. That person was william conley, a friend and successful enterpreneur, who was starting an internet backbone infrastructure company to provide internet points of presence, or POPs walker was the second employee and CFO of the fledgling technology firm in 1995. After one year of hand work with few paychecks, the firms was sold to GTE. It remains a portion of the internet backbone today.

      Following that first taste of risk taking walker returned to the corporate world as CFO of precept business service a $200 million company. when conley again touched base with walker in 1998 he was ready for a new challenge the establishment of a not-for-profit educational assistance company. This company one2one learning foundation provided individualized curriculum programs for children not enrolled in traditional public or private institutions.

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