Q Why Does Entrepreneurship Matter to Me? Do you have a hobby or interest you love and would enjoy turning into something more? Do you know how you would secure funds to start your own business? Jacob Lund/Shutterstock.com Entrepreneurs come from many different backgrounds including arts, entertainment, sports, manufacturing, crafting, and services. Entrepreneurs take what they are passionate about and turn it into a business. While good ideas and business plans help entrepreneurs connect with customers who are willing to pay for their products or services, the entrepreneurial spirit also helps people succeed in this line of business. Entrepreneurs are known to be energized by the idea of starting their own business, enjoying independence, and having the confidence that helps them maintain a tolerance for uncertainty or failure. Developing a vision for how their product or service can help or benefit others allows entrepreneurs to stay motivated. Sources of funding encourage potential and current entrepreneurs to start and grow their businesses. Funds for entrepreneurs may be raised from family, friends, investors, and institutions. Many entrepreneurs will use their own funds to start a business and may reinvest the profits they make back into the business to keep growing. However, additional financial resources may be helpful to entrepreneurs. There are five common sources of entrepreneurial funding: 1. Personal funding is often used by entrepreneurs and includes their own personal savings and assets. Entrepreneurs may save and reinvest money that was made from the business as well. 2. Loans can be taken from friends and family, though professional planning and documentation should be used to preserve relationships. Loans can be taken through debt financing from banks and other financial institutions. Credit cards may also be used by entrepreneurs. 3. Crowdfunding allows individuals to back a business with contributions that help entrepreneurs reach their financing goals. Contributions are often rewarded based on the level of financial backing and contributors receive products or services in return for their money. 4. Angel investing occurs when wealthy investors fund start-ups in order to make money for themselves. Angel investors look for entrepreneurs who want to grow their companies and buy a small stake of ownership in the entrepreneur’s company to sell for a profit at a later date. 5. Venture capital is a type of equity financing for entrepreneurs. Venture capital firms will fund a new company by taking a large stake of ownership in that company in exchange for funding. Refer to the following scenario to see why entrepreneurship matters to you and the world around you. Imagine that you love to build and paint custom furniture. It was a hobby you picked up from your grandfather, who enjoyed woodworking and taught you several summers ago how to build small tables. You decide to build and paint a small side table for your dorm room and now several of your friends want you to build and paint side tables for them. You enjoy the process of building and painting furniture. You seriously consider that you could turn your hobby into a small business that would help you pay for some of your expenses. You have access to a small workspace and some materials, so you begin to build and paint side tables for your friends. Your friends love your work, post pictures on social media, and tag you in those pictures. Soon more students from your college see the social media posts and send you direct messages to buy custom side tables for their dorm rooms. Why Does Entrepreneurship Matter to Me? It looks like you have a potential business opportunity, and you need financing to buy more materials to build the tables. What type of entrepreneurial financing would you choose?