Chameleon Shoes Case Study

1264 Words 6 Pages
Introduction
Every business needs some form of capital investment hence the need for entrepreneurs to identify reliable sources of financing. The chameleon shoes venture, being a new business opportunity will require reliable sources of capital. In fact, the chameleon shoes business will require finances to purchase assets and for its working capital operations. As such, the paper seeks to explore various sources of capital with particular interest on venture capital as well as their pros and cons.
Potential sources of capital
Personal savings is the first potential source of capital for investing in the chameleon shoe venture. Personal savings especially money put aside in a bank is easily accessible and is very instrumental in starting off
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In fact, bootstrapping is the best option because it does not put an entrepreneur in debt. This capital financing method is used in the pre start-up phase of a business such that the chameleon shoes venture is launched at low capital costs (www.business.govt.nz). Thereafter, it is purely funded from its profits as it is continually established. In this way, the business will not have to bear the burden of debt or give part the company’s ownership through equity. However, the disadvantage of this source of financing arises from the fact that it poses limitations of the business because the chameleon shoes provided cannot supersede the company’s profits even when there is high demand thus a hindrance in catering for the large target …show more content…
Rather than focus on profit generation a venture capitalist will propel the entrepreneur to prioritize the creation of a strong brand. Therefore, chameleon shoes will not just be a business prospect for making sales but one that seeks to build a reputable brand image such that the brand markets itself resulting in an immensely huge volume of sales. Interestingly, the venture capital philosophy will mean that whenever a consumer wants to buy footwear, chameleon shoes come to mind and nothing less. The high-growth potential for venture capital will shift an entrepreneurs approach towards expanding his or her network and building strong ties with industry leaders who are experienced such as the Nike brand leadership who have managed to create an indelible mark that cannot be ignored. Furthermore, an entrepreneur is able to focus on value creation besides expanding the business thus nurturing continuous innovation a product. Additionally, entrepreneurs take the approach of investing in its human resource because they recognize that they are a major element for the success of the business. It is for this reason that entrepreneurs allow venture capitalists to hire the right managers and even become part of its board members (Bender,

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