Nobody would have a second opinion, how important finance and its proper management is for a business to sustain and grow. Finance is one pivotal factor that directly affects the entire business process. Without managing fund flow properly, no business can survive for long, this is more so in case of start up businesses.

Finance is all about money management which also includes utilization of both capital and liquid assets productively. Businesses to be evaluated positively especially by managerial and financial institutions, should demonstrate, it adheres to standardized financial management policies and has the active involvement of a team of committed promoters to readily implement organization’s mission activities in practice.

The new era financial institutions are particular about details on financial management model while processing fund requirement requests. Many start ups rely on venture/angel funding to secure initial capital.

New generation venture funding organizations apply many different parameters to evaluate worthiness  which include not only the business model being presented for funding but also, unlike traditional ways, closely evaluate people behind the project.
If the team is good, even loss making start ups can raise fund for a turnaround these days.

Basically three stages can be outlined regarding the financial management of any organization including fresh as well as up and running start ups.

These financial stages are...
finance procurement stage
finance investing stage
dividend dispersal stage

Procurement of finance via venture funding is much more a complex decision than it traditionally was. This requires more detailed discussions among the initial stake holders regarding how the required fund is to be raised and how much has to be raised, because of possible dilutions in equity holding pattern later.

Start ups, when opt for venture capital/angel funding, providers of venture funds usually expect a share of equity as the part of the deal which they sometimes offload at a higher profit once the business attain consistent profitability.

This sharing of equity also means possible dilution of stake owned by initial project partners. So the fund raising stage itself has become much more complex though more funds and funding sources are available for a start up these days.

At finance investing stage, everything regarding the new business are again put under scrutiny by the venture capital partner. Though they may not interfere with the day to day affaires of running the business, their team will have a say while major investment decisions are made. This is actually very good for the young brigade progressing with the new business as they are also tapping into the resourceful managerial expertise provided by the funding team.

In short, regular, meaningful interaction between the start up entrepreneurs and venture capital team could turn out to be a favorable environment for the business.

Dividend dispersal is a stage that has evolved into a complex affair as it is not as simple as dispersing profit among partners anymore. This is especially so in the case of venture funded start ups.
The managerial acumen to return the venture investment at a proper time, or decision to infuse more capital either by existing venture capital team or by bringing in a new funding setup etc. could come up for discussion during this period and, further negotiations may be needed to settle all these properly.

For any business, financial management is an ongoing exercise. It has to be dealt with following standardized procedures, prudently and collectively. 
Start ups following these rules are more likely to demonstrate consistent growth and succeed in the long run.



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