Raising capital Flashcards
Raising capital, what do you discuss in the intro?
Raising capital is vital to any company, it allows companies to grow, invest and provide more financial stability. Companies usually achieve raising capital by debt financing or equity financing.
After intro, you talk about what, and list them?
Methods of raising capital
Debt financing, companies may use loans or bonds, its advantageous to a company in that they may receive tax deductibles however they face further financial risk due to obligated financial repayment periods.
equity financing, company may sell more shares, this invites other investors on board, this means that current shareholders powers are somewhat diluted.
venture capital, usually for start ups or smaller companies who want to expand, they will take funds in exchange for equity stakes like they do in shark tank
Initial public offering (IPO), companies who are private go to public and are listed on stock exchange where public can buy shares.
After discussing the methods of raising capital, what will you discuss?
Stages of a company
Start up stage where the company usually needs large investment or capital (venture capital is used)
Growth stage where company is looking for investment to grow and raise capital (equity or debt financing usually or IPO)
Mature stage where company needs capital to stabilise finances (retained money or bonds or equity financing)
decline stage where the company will assess all of its risks, cash flows and reconstruct their finances in terms of cash flow, taxes, machinery.
