Final answer:
Taking over a family-owned business is an under-valued way of entering business, often overlooked in favor of methods like bank loans or starting a new venture. Start-ups typically rely on external capital sources, including angel investors and bonds, since they do not have sufficient profits to reinvest for growth. So the correct answer is option 1.
Step-by-step explanation:
According to the lecture, one of the most under-appreciated and under-valued ways of getting into business is taking over a family-owned business. This method is often overlooked in comparison to other methods like getting a bank loan, buying a franchise, starting a brand new business, or working for commonweal.
The most common ways for start-up firms to raise financial capital include personal savings of the owner, investments from angel investors, reinvesting profits, borrowing through banks or issuing bonds, and selling stock. New ventures often lack the profits to reinvest, hence the need for these external sources of capital.
Banks are generally more willing to lend to established firms due to their track record, making it difficult for start-ups to secure traditional loans. A bond is a type of loan that entities use to raise funds by borrowing from investors who, in return, receive periodic interest payments and the return of principal at maturity.