How to Fund a Project

 

A project can be funded in the following ways

 

1. Debt - An amount owed to a person or organization for funds borrowed. Debt can be represented by a loan note, bond, mortgage or other form stating repayment terms and, if applicable, interest requirements. These different forms all imply intent to pay back an amount owed by a specific date, which is set forth in the repayment terms.
   

   
    

2. Permanent Financing - Develop long fixed assets like factories and machinery. Since the payoff from a long-term asset tends to be over a period of time, financing through long-term options reduce the risk of principal payoff not being made (in the case of debt financing).
   

 

1. owner financing - A home-financing technique in which buyer borrows from the seller instead of, or in addition to, a bank. Sometimes done when a buyer cannot qualify for a bankloan for the full amount. also called seller financing or purchase-money mortgage.
   
   
2. asset financing - Financing for which assets are converted into working cash in exchange for a security interest in those assets. The most common kind of asset financing is to extend loans against accounts receivable, but other kinds of asset financing, such as lending against inventories, is becoming more common.
   
   
3. internal financing - Funds produced from a business' operations, as opposed to external financing, such as the issuance of debt or equity.
   
   
4. institutional financing - Financing provided by an institution, as opposed to retail investors.
   
   
5. permanent financing - Long-term debt or equity financing. In general, permanent financing is used to purchase or develop long-term fixed assets like factories and machinery. Since the payoff from a long-term asset tends to be over a period of time, financing through long-term options reduce the risk of principal payoff not being made (in the case of debt financing).
   
   
6. interim financing - Short-term financing issued in anticipation of longer-term financing. also called interim borrowing.
   
   
7. owner financing - A home-financing technique in which buyer borrows from the seller instead of, or in addition to, a bank. Sometimes done when a buyer cannot qualify for a bank loan for the full amount. also called seller financing or purchase-money mortgage.
   
   
8. asset financing
   - Financing for which assets are converted into working cash in exchange for a security interest in those assets. The most common kind of asset financing is to extend loans against accounts receivable, but other kinds of asset financing, such as lending against inventories, is becoming more common.
   
9. internal financing - Funds produced from a business' operations, as opposed to external financing, such as the issuance of debt or equity.
   
   
10. accounts receivable financing
    - The selling of a company's accounts receivable, at a discount, to a factor, who then assumes the risk of the account debtors and receives cash as the debtors settle their accounts. A firm that sells its accounts receivable may not be confident of its ability to collect those debts, or might think that the cost of collecting that debt is more than the discount which must be provided to the factor when of selling their receivables. also called accounts receivable financing.
    
    
11. back door financing - When a government agency borrows from the U.S. Treasury instead of relying on congressional appropriations.
    
    
12. bridge loan - Short-term financing which is expected to be paid back relatively quickly, such as by a subsequent longer-term loan. also called swing loan or bridge financing.
    
    
13. broker loan - Money lent to brokers by banks, for financing the underwriting of new issues, financing customer margin
    accounts, and other purposes.
    
    
14. discount loan - A loan on which the interest and financing charges are deducted from the face amount when the loan is issued.
    
    
15. equity financing - Financing by selling common stock or preferred stock to investors.
    
    
16. external financing
    - Financing through the issuance of debt or equity. also called outside financing. opposite of internal financing.
    
    
17. inventory financing - A loan made to a manufacturer using its inventory as collateral. Inventory financing is often used by manufacturers of consumer products, for whom inventory tends to form a significant percentage of assets.
    
    
18. outside financing - Financing through the issuance of debt or equity. also called outside financing. opposite of internal financing.
    
    
19. mezzanine financing - Late-stage venture capital, usually the final round of financing prior to an IPO.
    
20. refinancing
    - Paying off an existing loan with the proceeds from a new loan, usually of the same size, and using the same property as collateral. In order to decide whether this is worthwhile, the savings in interest must be weighed against the fees associated with refinancing. The difficult part of this calculation is predicting how much the up-front money would be worth when the savings are received. Other reasons to refinance include reducing the term of a longer mortgage, or switching between a fixed-rate and an adjustable-rate mortgage. If there are prepayment fees attached to the existing mortgage, refinancing becomes less favorable because of the increased cost to the borrower at the time of the refinancing.
    
    
21. off-balance-sheet financing - Financing from sources other than debt and equity offerings, such as joint ventures, R&D partnerships, and operating leases.
    
    
22. direct financing
    - Financing without the use of underwriting.
    
    
23. round of funding - The stage of financing a start-up company is in. The usual progression is from startup to first round to mezzanine to pre-IPO.
    
    
24. staple financing - A financing package provided to potential buyers of a company by the investment bank advising the selling company. By providing information regarding the financing structure, including price and fees, investment banks increase the odds of a deal going through. It is referred to as "staple" financing because the options are said to be stapled to the back of the acquisition terms. Conflicts with staple financing can arise if the investment
    bank advising the seller also provides the financing for the buying firm.
    

Google Wave

Google wave announces itself big today. It gave invites to all the users and we will see its population multiply many times in the next few days. So its sure that google is creating waves. Now is the big question for all small business owners. What can the wave do for us. How can it be utilized in creating that little competitive edge, to add the little zing to our businesses.

For one don't expect to change anything drastically. At least for now till we have paid applications coming in.

I was thinking it to experiment it for doing client / opportunity management by the sales team. Multiple team members of the sales team can have a client specific wave. The marketing people can update all client communication on the wave. And then a team discussion could be had with the wave running.

I am not able to think of anything else where wave would be able to do what IM and Email don't do well enough right now. Would love any comments with any ideas links on this.

Reading.

Books I am reading these days

1. Catch 22

2. Freakonomics (had read it few years back)

3. Managing for Results - Peter Drucker

Recently Read

1. Outliers - Malcolm Gladwell

2. Good to great - Jim Collins

3. Getting Things Done - David Allen

4. Execution - Ram Charan

can't remember more. Will update as and when I remember.

Focus

About balancing customers. Focus on existing areas of profit. Some times we tend to lose focus on which areas are generating money for us and which areas are not. 80-20 rule is very much applicable here. 80 percent of your sales and profits come from 20 percent of your customers. It is really important to focus on this 20 percent and give them the due time and representation. Running after the other 80 percent is important but not at a cost where there is a possibility of losing this existing 20 percent. And how often do we find our self just taking this 20 percent of regular customers as a granted thing and tend to lose focus.

The same focus principle holds true for life as well. 80 percent of one's success, mental satisfaction and peace comes from a mere 20 percent of the total activities. Its important to identify these 20 percent and be able to hold on to them. In general the things we do in our daily activities sometimes these 20 percent are the most ignored because we never focus on things going right. Instead the stress is always on things going wrong.

Jonathan Livingston Seagull

The gull sees farthest who flies highest

-Richard Bach

 
 

 
 

 
 

The Buzinezz

Since I joined the business I have found it really difficult to actually discuss my work, the exact work with others, specially friends. Not that it is shady or anything but really difficult to explain.

A friend of mine was tagging me for a day a few days back just to get the feel of how marketing in a medium scale Indian company looks like. I promised him a really different day and boy did he have one. I could imagine my first few days after fidelity as a software engineer of working here. It is different in so many aspects that it actually feels odd to classify both as work for someone with same qualification and credentials. That's the beauty of engineering isn't it, that you are essentially good for nothing so can do anything.

Coming back to day I actually was more conscience about the overall actions, the kind of consciousness when someone is observing you. A few things which have become such an integral part of daily work life here, which I had been doing without even realizing were suddenly evident to me.

We went to a government office. At the entry there is a police team who greeted us with open hands. Why would they do that? I could clearly remember me asking my self the same question when I had first visited that office. Its just that you are their guests when you enter that office and the will offer you complete courtesy to ensure you are comfortable filling up the visitors form and you get the entry gate pass in a matter of seconds. Reason. Well once you are inside you are theirs. Exit pass (unofficial) is only available in exchange of a Rs. 50 note.

We had a letter with us which we had to submit in the office. All it needs is a stamp from the postal department there stating they have received that letter. Stamping fee another Rs 100. No master card allowed. The Gandhian option. Wait for 2 hours for the guy to finish his tea, coffee gup and shupp and then may be if he is not about to plunge into his skiing holiday dream he might stamp it.

Outside the chairman's office. Peon's fees. Rs 20 for 1 hr wait. Rs. 100 for 10 minutes break. For Rs. 150 the lowest rank peon in the office has full rights to barge into the chariman's office, interrupt whatever meeting is going on, place our card on his table and stand in front of him to ensure we meet him in the next 5 minutes. This is true for every damn government office in the country.

Overall I paid Rs. 2 Lac as government unofficial tax on that day and wouldn't even have realized it but for that conciseness.

Why would someone do such work? I had asked this question over and over again. The system is such. You either become a part of it or perish. It is not survival of the fittest. Its in the literal sense paisa fek, tamasha dekh. The overall system has evolved in such a way that it ensures value for everyone. That's the sad but very much true state of things.

 
 

There is just too much content to write on this subject. Will continue on this post soon...

MBA FMB @ SPJIMR

Recently took up this course at SP Jain Institute of Management, Mumbai in Family Managed Business (FMB). After a couple of years of working in the family business this course did seem like the right option. All the alumni I managed to spoke to also gave a big thumbs up to go for the course.

Now I am one contact old into this program and can say a few things about it.  

What could be gained?

Contacts: I always that that this would be the last thing I would ever require. That surely proved to be really wrong. The kind of people you meet here, the varied businesses you get to hear about and more importantly you get to meet same aged people doing your kind of work which is a rarity. I've hardly had a friend before joining with whom I could actually discuss work with both being able to relate to it. 

Faculty: So far so good. Few of them seem to be brilliant. Knowing them is a good long term asset and will defiantly have short term benefits like knowledge sharing and business consulting.  

Facilities are good. Have to be there once a week. Attend classes from morning 8 to evening 7 30. Accompanied by loads of semi sensible assignments for the rest of the three weeks back home. I have spent too less a time there to be commenting confidently on these details. Will update.

 
 

 
 

Balance

What is the correct balance. So many variables weighted against each other. Some day will have the perfect answer to it.

intellectual epitome

Moral policing in our country is in its all time classical high. They finally have their hands on Savita Bhabhi (Pun intended). Savita Bhabhi is an excellent creation satisfying the biggest Indian male fantasy of hot Bhabhi (elder sister in law). Here's a message by the team.

Its a website which serializes the sexcapades of a fictitious cartoon character called Savita Bhabhi a true custom creation for the Indian male fantasies. Well that sure was appealing as a business idea until moral policing got to them. Some one probably complained that why is she not a gujjar. Scope for creativity is insane. when the bra salesman goes ”Thank You, Thank You, Thank You GOD!” Damn I need to change the topic.

Ah. What next. I think its time to switch business i guess. Research sounds like a good option. How about A stress Analysis of a Strapless Evening Gown. "Assuming that the female is naturally endowed to supply the vertical force V, the problem is still left incomplete unless an analysis is made of the structures supplying this force. These structures are of the nature of cantilever beams." Feels like I missed something in the short time I spent slogging in my dingy office. It seems we are headed towards intellectual epitome.

It feels good to be back though...

help!!!

a blog a day keeps the doctor away. I am on the brink of hospitalization.

The African IPOD

Interesting but kind of sad.

Scott Adams on Career

If you want an average successful life, it doesn’t take much planning. Just stay out of trouble, go to school, and apply for jobs you might like. But if you want something extraordinary, you have two paths:

1. Become the best at one specific thing.
2. Become very good (top 25%) at two or more things.

The first strategy is difficult to the point of near impossibility. Few people will ever play in the NBA or make a platinum album. I don’t recommend anyone even try.

The second strategy is fairly easy...

-Scott Adams, creator of Dilbert,

Fighting the China Stratergy

In business there is only one fundamental question - How to make money? But there are two fundamental answers to it.

First would be take a rupee from a lac customers and you have one lac. This is the China Strategy. The Americans will swear that it never works and its just pure fluke that Chinese have been able to sustain if for this long.

Other is just the opposite. Make Rs. 100 from 1000 customers and you are there. Which one should you or your business choose? That’s the question all the small businesses of the world are trying to answer.

If I was asked to put my money on one of the two I would choose the latter. It is the correct way with better returns in the long run. And it applies to any business, ranging small shop, or a wada pao vendor, to the largest of the large corporations.

Reason. Simple math. It generates more revenue per sale. In a little more detail - how much ever hard you work or how much ever efficient a system you create ultimately there will be a fixed cost per sale. Cost includes time spent on the sale. This will bottleneck the revenue after a while. Initially the low price model will look very attractive as it generates instant sales and the turnover shoots but sustainability is a serious doubt.

More margins per sale don’t necessarily mean that it should be some kind of an up-market product. It could be a regular middle class product selling probably half the number of your low priced competitor but delivering quality to the customer and higher revenues for the business.

Few of the most regular successful products today will tell you the same story. Be it Microsoft Windows or an iPod or even a Pizza Hut Pizza or a regular Barista coffee. They have huge margins, targets the huge customer base of upper middle class, and are way ahead of their half price competitors.

An excellent article here about fighting the China Strategy.

Dissected

There are pictures here which are gross. They are painful to watch. If you have a week heart kindly refrain from clicking here. They are dissecting a baby part by part. Its worse than Texas Chainsaw - II. Its an iPhone being disassembled hours after its release.

(link) - http://www.anandtech.com/mac/showdoc.aspx?i=3026

Where is our race headed?

Test

Test Post

The Timepass Theory

Finished reading this book "It happened in India". It covers the professional life of Mr. Kishore Biyani, the big bazaar tycoon. He gave one of my psycho thoughts a name - The Timepass Theory. Somehow I have believed in this alternate interpretation of life for quite some time, knowing very well that one has to be some kind of a lunatic jerk to have such thoughts. Hearing it from someone else that too in his biography came as some kind of relief. Enough to make me post about it.

I interpret life very differently and I have this belief that we all come to this world to kill time. Therefore, we pick up some activity that we like doing and call it our profession. I call this the Time Pass theory.

I work to build a business, an organization. But what I am essentially doing is trying to spend the time I have in this lifetime. Every morning, I get busy getting ready to leave for work or some meeting. I am doing it not because I have to do it. I am doing it because I will not have much else to do through the day.

Through this work-life of ours, we tend to create our own world. We make our own definitions of success and failure, of victories and defeats. And we use these not only to judge our own selves, but also to judge others, without ever realizing that all we are doing is basically digging holes and filling them up. Yet I have seen so many people take their life too seriously, not realizing that what they are essentially doing in this world is time pass.

(Kishore Biyani is the CEO, Future Group and author of
It Happened in India)

How the hell did he motivate himself to achieve those monumental feats with such negative thinking?

Tagged

Yeah tagged. And this is not one of those blog tags which you have to reply to. I had a tag put on me today. A price tag. Have left all my work and decided to post after the long blogging vacation.

Today my dad got the first marriage proposal for me. A day to celebrate for me ;). Dad called me to his office and casually told me "rista aaya hai". I was dumb stuck for a while just trying to make sense out of those words. Is it for me? Is he joking? Nah can't be me? He wouldn't be telling me so seriously about it. May be cousin sis? May be. Hopefully.  "Kya".  "Tumhare Liye, Noida ki koi industrialist ki beti hai". Phew it is for me. Why is he telling me this. Isn't it obviously no even without consulting me. What the hell is happening. "Bulwa diya hai ki abhi thoda time hai shaadi me". Thanks goodness gracious. That was one awkward moment to forget.

Yeah after that moment passed I asked my dad that how and how in the bloody world did they know that I even existed and how did they approach us.

"Kuch nahi manoj jee aaye thee aaj.Direct bole aapke ladke ke liye pooch rahe the gupta jee apnee beti ke liye. 75 se 1 tak ka offer hai."

Difficult to believe right. This happend to me in a space of 2 minutes. Even I wouldn't have believed it before. They formally call it ARRANGED.

A moment of Eureka!

If there is a problem then there is a solution. It totally depends on how much time one is willing to devote to it. Depending on the comlexity of the problem the solution could take ages to strike. And at the end of it all it takes is that one moment of intense thoughts warfare, not controlled, which results in that ingenious solution which you always believed was there. What follows is a feeling of excitement, a feeling of stupidy of not having solved it earlier and above all the joy of success.

Its 3 A.M in the morning and I am nerd enough to have these thoughts. I have been thinking about blogging on this subject for a while now. And one small experience  finally provoked me into documenting this at this hour. I had a work related problem irritating me for a couple of days now.  It had reached a point where somewhere in my subconscious I had assumed that there is no solution to it and I would have to start over again and find ways around it(the usual give up tendency). I sat in front of my comp at around 11 PM today and worked another hour without any success towards it. Frustrated I decided to lay off and started my usual Internet chores mails, orkut and messenger bla bla. A continuous thread of thoughts were still hovering around that problem without any concience effort of doing that.  Somewhere in the middle of all this there was this spark, a feeling, which made my adrenalin rushing, heart pumping. A sudden sense of excitement gripped me. And the best part was I had no idea why was this happening. Some intution told me that I had found the solution. Did I? If I did then how? What was it?  All these quesitons still unanswered.  Careful cogitation revealed that the back of the head processing had actually come up with  a solution to the seemingly impossible problem. It took me about 5 minutes to relax myself and collect my thoughts and "BANG" the solution was there. I had no idea from where. It felt like it was always there right in front of me and I always turned a blind eye towards it.  How could it be so simple. There has to be something wrong. How could it be so perfect. Well it was, it had to be, its right there in front of my eyes.

All that was an hour ago. The solution as it turned out was flawless and unbelievably simple mocking me on the face for not having seen it for so long. That moment was a small insight for me to the feeling of Eureka. When after years of probing into a question people finally find answers to something that they been trying to figure out for ever.

Simon Singh in his Code Book cites many examples of how the code breakers never say die attitude helped them achieve the impossible. Outcome of World War I was changed because of one such dedicated cryptographer.

Einstein always believed that his wave theory was correct even if it meant proving centuries of study by millions of scholars wrong.

Its like a poet fighting hours together to get that one word right. Nothing but perfection satisfies him. Achiving that perfection is his problem. His fight is to find a solution to it. One could call it his profession, they might beg to differ though.

Just for this moment I would like to believe Impossible Is Nothing. A cliched sentence which has been used just too many times with too many contexts.

The Indian problem

Technological update..argh kind of

Doctors and engineers have developed this amazing artificial heart which could completely replace a human heart in case of total failure. It even has a battery backup of 2 hours, after which you will have to plug the chord coming out from your heart into some terminal to recharge.

They forgot to consider the Indians I guess. What happens in case of power cuts. The agonizingly long ones that too lasting 6-10 hours during regular shortage and no limit during crisis. Now what?

When in India, do the Indians. Get a inverter to back it up. Get a generator to back up the invertor. And in order to keep the heart up and pumping keep the generator's tank up and pumping. And what's so funny in that. Every one knows that increase in fuel prices increases our living expense. That's how our other energy needs are satisfied anyway.

Hiccup ja ja ja

Had this hiccup syndrome a couple of days back. It went on for more than 24 continuous hours, prompting me to do a Google search on it. That says something about the dependency on Google we have these days.

The search turned out to more interesting than I imagined. Below are a few details

World record

The world record for the longest continuous bout of hiccups (1922–1990) goes to Charles Osborne (1894–1991) from Anthon, Iowa. The hiccups started in 1922 at a rate of 40 times per minute, slowing to 20 and eventually stopping in February 1990 – a total of 68 years. [3]

The poor guy died a year after  his hiccup stopped.  The next few links revealed a few useful remedies .

Jump out of a plane.

Breathe slowly into your shirt.

Take a finger full of hair from the crown of your head and as hard as you can stand (though not hard enough to pull the hair out) for 10 seconds. 

Say "pineapple."

 Stand on your head.

Make yourself vomit. 

Talk non-stop for ten seconds.

Scream for as long as you can.

(Women:) Stimulate your clitoris.

Fart.

Burp

ok enough here's the link

And the winner is

Cure number one: Do a Google search on hiccup.