Name: Raising money for a startup | Stocks and bonds | Finance & Capital Markets | Khan Academy
Uploaded: 2018-04-02T07:19:14.000Z
Duration: 12 min 2 s
Description: Thousands of YouTube videos with English-Chinese subtitles! Now you can learn to understand native speakers, expand your vocabulary, and improve your pronunciation...

Let's say I'm hanging out with
my buddies one night and we

Present continuous

realize that there's a
huge opportunity in

The imperative

So the first thing we
would do is we would

In this business plan writing
process, this is all we've all

So the first thing we want to
do is we want to start a--

well you know, you could do in
different orders, you could

just write up a business plan,
or you can start the

But we'll just assume we
start a corporation.

And I'm going to indicate the
corporation by creating a

So, what are the assets of the
corporation, and what are the

debt-- and what are the
liabilities-- and we could

talk a little bit about what
a corporation even is.

I mean, you could say it takes
physical form to some degree

in the business plan, but it's
just an idea first. And then,

there are no immediate
liabilities, it doesn't owe

And we learned in the balance
sheet videos-- and you might

want to watch the balance sheet
videos as a prerequisite

to this one-- but in general,
assets are equal to

The only asset we have right
now is our idea.

Maybe you want to add the
potential talent that we have,

These are the assets that our
five buddies have together.

It doesn't sound like we
borrowed money or anything.

So everything we have-- so the
assets are equal to our

equity-- and I'll do that in a
brown color-- so there's no

And equity is essentially what
the owners of the company have

For example, if-- I haven't
assigned any numbers here and

I did that for a reason-- but if
the assets were $10 million

and liability was $5 million,
if we had owed $5 million to

someone else, then you
would have $5 million

And that's what the owners of
the company would have.

Me and my five buddies, or I
guess my four buddies, we

decide we're the owners of the
company, so we'll be equal

So we would split the equity
between us five ways.

Let's say to begin with we have
a million shares, so each

of us have 200,000 shares
in the company.

And you normally do assign some
value to those shares

initially, it's some pennies
per share, but I won't get

Just fair enough to say that we
each have 200,000 shares in

And some of them go to me and
then the rest of them go to

buddy one, buddy two, buddy
three, and buddy four.

And there's a total of one
million shares outstanding.

Well, just an idea and some
paper and some well

We're going to have to create
some type of an online

presence, and do some
programming, and maybe have a

So we're going to have to-- and
really we're going to have

to quit our jobs so that we can
work on this full time.

So we're going to have
to raise some money.

Money to hire some engineers, so
that we can quit our jobs.

To hire some marketing people,
et cetera, et cetera.

So this is where the whole
venture capital world comes

I think you have some
sense of what it is.

And the venture capital world,
it's kind of separated into

different people who invest
in different stages.

So you'll have people, they're
called angel investors.

And sometimes these people won't
even call themselves

And these are the guys that
are kind of these, I don't

want to stereotype it, but
they'll be kind of like the

old guys who made it big in
the `80s and now they're

And they want to participate
in the neat, fun ideas that

young guys like me and
my friends think of.

And so they're kind of like your
rich uncle who says, oh

that's a great idea, I'll throw
some money behind that.

They usually invest at
a very early stage.

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Raising money for a startup | Stocks and bonds | Finance & Capital Markets | Khan Academy

essentially

process

arbitrary

general