Businesses, like living things, have a life cycle. They are born, have a rapid growth phase, expand, become mature as they reach an optimal market share and then transition. What is left of the business may then be reborn as a new startup or may simply vanish.
Five circles around a circumference indicate these life cycle stages. Green arrows pointing clockwise between these circles show the progression between cycles with appropriate finance methods. An inner yellow circle shows typical financing sources used by the businesses at each stage. Non-traditional sources such as factoring and invoice discounting are common in the early stages while asset-based lending, such as bank loans, are indicated for mature businesses. Finally, an innermost green circle represents failure in the form of bad debt and bankruptcy protection.