In startup firms, inventory must be purchased, employees must be trained and paid, and advertising must be paid for before cash is generated from sales. Which of the following reasons that motivate firms to seek funding or financing is illustrated in this example?

Question

Quizplus · Accepted Answer

The example provided illustrates the cash flow challenges faced by startup firms. They need to invest in inventory, personnel, and advertising before generating cash from sales, which can lead to a cash flow crisis. Therefore, startups must seek funding or financing to overcome these cash flow challenges.

In Startup Firms, Inventory Must Be Purchased, Employees Must Be