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to a startup will be repaid . That reduces the risk to the bank, enabling the bank to make the loan. The SBA has a venture capital program called the Small Business Investment Company (SBIC) Program . It does not invest directly in startups. It partners with private investors to provide capital for small businesses by supplementing private capital with low-cost, government-guaranteed debt. The Big Picture The availability of capital is critical for innovation and the growth of commerce. There are different types and sources of capital, from crowdfunding, angel capital, SBA guaranteed bank loans, venture capital, and IPOs. Venture capitalists are startup investors who have an interest or expertise in a particular industry. Private equity firms work with established companies hoping to raise money and improve performance often through arranging a merger with or acquisition of another company. Angels, venture capitalists, and private equity firms take an equity interest (shares) in a company in exchange for providing capital. They accept the risk of loss, but hope to be rewarded with a high return on their investment (ROI). An IPO is the process by which a privately held company converts to a company whose shares are publicly traded on a stock exchange. An IPO raises a lot of capital for the growth of the company. SLIDE 13K PRODUCT PREVIEW Let’s Practice! Select from the following practice activities: Let's Practice: Capital Recap Let's Practice: Innovation Team Project - Part 3: The Pitch Deck Exploring 21st Century Skills and Issues: Make’n a Marketing P-P-P-Plan Ponder and Predict You hear the words “Wall Street” pretty often – in the news, or in movies and TV shows. What is Wall Street? Is it a real street? Where is it, and what’s that wall about? Write your predictions here and in the next lesson, find out if you are correct! Assign • Blog, debate, discuss: If you were an angel investor with an investing agenda, what would it be? What type of investment would you avoid or reject? • To prepare for the next lesson: read Chapter 14 of the student workbook. • Watch business or financial news at least 15 minutes per day. • Each week compare and contrast tweets from students' selected financial journalists. Compare journalists' opinions about events and stories. SLIDE 13L
Lesson 13 | The Quest for Capital! 248
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