What is the cheapest source of funds? When all other sources turn down your request for funding, what source is most likely to say yes? Why is this the case? Is the entrepreneur exploiting a personal relationship with this potential source of capital? What are the consequences of using this source of capital if the business goes bankrupt?
Should the government provide grants for entrepreneurs starting new businesses? Should the government guarantee loans for small businesses that are missing the necessary track record, assets, or other ingredients to obtain a commercial bank loan? What benefit do we, as a nation of tax payers, receive from such grants and loan guarantees?
Why don't all firms use bootstrap financing? Are there any dangers with this approach? What are the benefits of having some financial slack (e.g., some extra cash in reserve)? What are the costs of that financial slack?
