Equity Financing Flashcards
Walk me through the various funding rounds in venture capital
From the perspective of management, what are some downsides of going public?
What are pre-emptive rights?
Allow existing shareholders to purchase newly issued equity before others
Protects them from dilution
During an IPO, what is the role of the underwriter?
An intermediary between listing company and the prospective shareholders, advisory role:
What is an underwriting syndicate?
Group of investment banks purchasing securities at a discounted price and then promoting them to their own network of investors.
What is the lockup period associated with an IPO?
180-day period in which investors holding shares in the IPO company cannot sell for a period of 180 days.
What is a firm commitment in an IPO?
Where an underwriter of an IPO agrees to purchase all the securities that fail to sell in an IPO.
Hence, syndicates are far more common
What is the Dutch Auction pricing method in an IPO?
In the past couple of years, IPOs have increasingly been scrutinized for leaving “money on the table.” Could you explain what this criticism is regarding?
What is a syndicate greenshoe option?
What is SPAC?
