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Compare self-funding, debt, and selling equity in a fictional expansion. Calculate cash needs and ownership tradeoffs; distinguish a financing conversation from a securities offering. Educational scenarios only.
Four guided lessons, hands-on decision sequences, practice checks, and final decisions. Build a plan, test it, then examine the reasoning. Progress stays on this device only.
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After this lesson: Separate purchase price from the working cash needed to execute a plan.
A funding request starts with a dated uses-of-funds schedule, evidence for each cost, and a reserve for operating uncertainty. Raising a round because a headline number sounds impressive can create avoidable debt or dilution.
A distributor needs $60k for inventory, $20k for equipment and $15k for seasonal payroll timing: $95k before contingency. The founder checks quotes and cash receipts before choosing a funding amount.
Use the briefing above. Select the actions in the order you would take them, then run the sequence.
Apply it: Explain why purchase funding alone may not pay next month's bills.
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After this lesson: Identify cash repayment and ownership dilution as separate tradeoffs.
Debt normally has repayment terms, cost, and covenants. Equity gives investors ownership and can affect control and future proceeds. Neither is automatically cheaper. Model downside cash and use qualified advisers for actual documents.
At a $900k pre-money valuation, a $100k new equity investment implies $1m post-money and 10% ownership for that investor, assuming no other terms or dilution. A $100k loan avoids that immediate equity issuance but adds repayments and lender terms.
Use the briefing above. Select the actions in the order you would take them, then run the sequence.
Apply it: Choose the risk question for a founder with volatile monthly cash.
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After this lesson: Flag an investor offer for legal review before public promotion.
Selling an ownership interest can involve securities laws even for private companies. The offering must be registered or qualify for an exemption, and solicitation rules depend on the pathway. An internet post inviting investments is a legal review event, not ordinary product advertising.
The founder drafts a public post: ‘Invest $10k for 2% of our company.’ Before publishing, counsel evaluates the proposed security, offering exemption, investor eligibility, disclosures, and state requirements.
Use the briefing above. Select the actions in the order you would take them, then run the sequence.
Apply it: Distinguish a chocolate product promotion from an investment solicitation.
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After this lesson: Tie funding milestones to cash forecast and investor or lender obligations.
Cash runway is the time until available cash can no longer cover outflows under stated assumptions. Funding terms may require reporting, use restrictions, or covenants. A beautiful forecast does not replace actuals; revise monthly and report honestly.
A company holds $120k unrestricted cash and projects $20k net cash use per month. Simple runway is six months if that burn stays constant; a later $45k inventory payment shortens the real dated runway.
Use the briefing above. Select the actions in the order you would take them, then run the sequence.
Apply it: Identify the reason a simple monthly average can mislead.
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Three new scenarios check what you retained. A missed answer opens a worked explanation and a reworded question.
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Keep learning with the hands-on case. Test preparation is a separate, harder stage that asks you to calculate, inspect assumptions, and apply the method to unfamiliar facts.
Subject-specific practice tiers are in development. No external exam readiness claim is made here.
Original Aim High Hero explanations and fictional exercises. The external source provides subject reference and does not endorse this course.
U.S. Securities and Exchange Commission — Capital-raising building blocks ↗SEC — Offering pathways ↗SEC — General solicitation ↗SBA — Grow your business ↗