Reading and Speaking Tasks

Vocabulary

Planning Cash Flow Requirements

Venture Capital As a Source of Funds

Many newer businesses, especially those that are growing rapidly, are hard-pressed to obtain the funds they need through borrowing alone, Venture capital is an alternative source of equity funds in which outside capital is obtained in return for part ownership of the firm. Venture capital firms are always looking for opportunities to invest in new and growing firms. Because the failure rates of new businesses pose high risks, venture capitalists demand higher returns.

On the international front, however, the trend is toward greater venture capital participation. In 1989, for example, for the first time ever, more venture capital was invested in Europe than in the United States. The gap widened in 1992 when the European market became the world's largest. In the Pacific Rim countries of Korea, Taiwan, Singapore, and Hong Kong, some U.S. entrepreneurs seeking venture capital have found Asian venture capitalists to be much more cautious than those in the United States. They tend to look more closely at the borrower than do U.S. venture capitalists.

Although all businesses should plan for their cash flows, it is especially important for small businesses to do so. Success or failure may hinge on anticipating the times when cash will be short and when excess cash can be expected.

By anticipating shortfalls, a financial manager can seek funds in advance and minimize their cost. By anticipating excess cash, a manager can plan to put the funds to work in short-term, interest-earning investments.

inadequate funding survival rate initial funding entrepreneur underestimate notorious	IOC	недостатнє фінансування рівень виживання початкове фінансування підприємець недооцінювати горезвісний
assume loyalty convince trend gap the Pacific Rim countries cautious hinge on anticipate shortfall	°& °& °&	брати (на себе) вірність, лояльність переконувати тенденція, напрям розрив Країни Тихоокеанського регіону обережний, завбачливий залежати від передчувати дефіцит, нестача

I. Make up questions covering the content of the text and let your fellow students answer them,

II. Having read the text, what you can now say about:

• the main sources of credit for small businesses;

• venture capital as a source of funds for small businesses;

• planning cash flow requirements in small businesses.

III. Work with a partner who read the text to produce a summary of the text. You need only mention the important points

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