Financing a mini-company

Any business, large or small, needs a certain amount of capital to get off the ground. We recommend a capital between 250 and 500 euros per mini-company, however this largely depends on your needs.

To raise the money, there are three solid avenues for you to explore:

1. Selling shares

The simplest way to gather funds for your business is by investing your own money or by getting your friends, teachers and family to buy shares. Shares represent units of ownership in a corporation owned by investors who exchange capital in return for these units.

Note that:

• The value of a share is set at either 5 or 10 euros.
• You, as entrepreneur, should subscribe to a least one share in your mini-company.
• Jonk Entrepreneuren Luxembourg (JEL) also subscribes to one share in each mini-company (please send an invoice to info@jel.lu).
• Subscriptions and payments should be completed before the constituent general assembly (see section “general assembly”), as all shareholders are convened to the meetings.

You should keep proof of investment for every shareholder. In practice, future shareholders subscribe to a bearer share and receive a share receipt in return. New shareholders whose personal details (surname, first name and e-mail address) are collected, are entered in the shareholders’ register.

This register contains the information the Company Secretary needs to convene shareholders’ meetings in writing and to issue the bearer shares they receive at the constituent general assembly. Useful templates (example of share receipt, bearer share and share register) can be found in the “documents to download” section below.

If the business starts making profits, whoever invested will have the right to an agreed upon return on investment plus any dividend at the end of the programme.

Please note: in accordance with the General Data Protection Regulation (GDPR), shareholder data must never be disclosed to third parties!

Important: We do not recommend that students finance their company exclusively from their own money, as they then bear the entire financial risk alone! Ideally, you would find many different shareholders and one shareholder would subscribe to no more than two shares in the same mini-company.

2. Fundraising events

Another creative and exciting way to raise funds is by organizing events like cake sales or any other fun event at your school. This method not only generates money, but also creates buzz and excitement for your business.

Important: If you hold a fundraising event, the money you raise must be used to pay for your business activities (this is to be recorded on your accounts spreadsheet which is available in the accounting section). Under no circumstance can the money raised through fundraising events (or sponsorship) be declared as profits. Profits only come from selling your product or service.

3. Sponsorship

Sponsorships are another funding avenue to pursue. However, they are only allowed if the mini-company enters into a commercial agreement with the company providing the sponsorship. Concretely, this means that mini-companies can for example get paid to show the other company’s logo or ads on a specific product. Think of this as selling ad space on your products. Receiving a sponsorship or donations without giving back any advertising in return is a big no-no. So, whenever sponsorship is involved, make sure it’s a two-way street.