Summary
Summary ch15 (year 1 IBM)
- Course
- Institution
Summary chapter 15: venture capitals and IPO's
[Show more]
Seller
Follow
kiarademoor
Reviews received
Content preview
Chapter 15: venture capital andIPO’s
1. Venture capital (VC)
What?
• Young firms often require capital to finance growth
• “Going public” is not an option for an “immature, untried” company
• Possible financing from bank and FFF already explored (FFF=friends, fools, family)
Venture capital
=Money invested to finance a new firm
- Since success of a new firm is highly dependent on the effort of the managers,
restrictions are placed on management by the venture capital company and funds are
usually dispersed in stages after a certain level of success is achieved
Who?
Sources of venture capital
• Angel investors
- Investors who finance companies in their earliest stages of growth
• Corporate venturers
- Corporations that offer venture assistance to finance young, promising companies
- Private equity investing
, - Investors who offer funds to finance firms that do not trade on public stock exchanges
such as the NYSE or NASDAQ
(the name venture capital/equity is reserved for new firms, private capital/equity is
more general)
- Use of (mutual) funds to pool money together from investors
How?
Steps to obtaining venture funding
• Prepare a business plan
• Look for potential investors and pitch your idea/plan to them
• Receive first-stage financing
• Receive subsequent staged financing
How? P 442
Crowdfunding
Read “Finance in practice” p. 444
• Crowdfunding is a more passive investment vs. VC investments:
o Seat on the Board of Directors?
o Expert advice?
o Influence on management?
Success rate?
o = low
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller kiarademoor. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $7.59. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
79223 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now