Usually companies need some initial funding to start their operations. This applies to JA companies as well. There are many types types of funding for Start Ups and we will explain the most used here.
1) Founders’ money & time
Usually the founders of the company invest some money and a lot of free time into starting the company.
In the beginning there is usually only one source of funds: the pocket of the entrepreneurs themselves.
JA Start Up companies are funded by the founders and every founder can buy shares of the company.
Shares in JA Company
- 1 Share costs 10€
- 1 person can buy up to 10 shares
- Max 1000 shares can be sold
Rationale for these rules is that you can only lose the amount of money invested. Real money improves the learning experience, but on the other hand financial risks have to be limited.
You can invest as much of your time to the company as you wish and unpaid labor invested in the company is often called sweat equity.
If you have a good idea, you can invite investors to invest in your company. They usually invest money (and possibly time) in the company and partial owners of the company in return.
Ownership is defined by shares (for example, a company can have 100 shares, where each share represents 1% ownership of the company)
JA Companies can sell their shares to investors, but keep in mind that they will also get a part of the profits at the end of the year.
If your company needs additional funding it can apply for a loan (for example from a bank). Usually banks do not give out loans for the Start Up Companies as they require some guarantee that the loan can be paid back.
JA Companies are not allowed to take a loan during thir activities, so consider this only if you plan to create a real company after the programme!
Crowdfunding is an ideology where private individuals can invest in an upcoming project. This is a fairly popular approach in other countries but in Finland there are limited opportunities.
More information about crowdfunding:
Wikipedia – en.wikipedia.org/wiki/Crowdfunding (General information)
Kickstarter – www.kickstarter.com (World largest crowdfunding site)
Invesdor – www.invesdor.com (Finnish site)
Crowdfunding usually requires a defined business model and excellent presentation, so this might also be the next step after the JA Start Up Program.