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Chapter 15 - Raising Capital/ Financing Life-cycle - Coggle Diagram

- - - - private financing for new, high-risk, ventures (new companies)
      - VC benefits if firm is successful due to capital raised in the process
      - Financiers
        
        Angel investors
        
        Wealthy people who invest
        
        VC firms
        
        many investors pool money then others in firm decide
        
        private independents
        
        Corporate VC funds
        
        Labour-sponsored
        
        Private equity
        
        Government funds
        
        government agencies
        
        crowd funding
      - Stages of Finance
        
        Start-up/mezzanine
        
        money to begin manu,
        
        Expansion
        
        money to marketing, distribution
        
        Seed
        
        money for prototype and manu plan
        
        Acquistion
        
        Turnaround
        
        reworking project
        
        done to limit risk since most startups fail
        
        more then one VC can finance different stage
      - Choosing a VC
        
        Matching management style
        
        Good references
        
        Financial strength
        
        Network of VC
        
        Exit strategy
        
        Reverse Take Over
        
        Entrepreneurs buys back shares
        
        Sell shares to third party acquiring the firm
        
        Sell shares to company merging with the firm
        
        Initial public offering
  - - - Sale of securities in public markets
      - Underwriter
        
        Services
        
        Advice on issuing
        
        Prices securities
        
        Sells securities
        
        Price stabalization
        
        Compenstation
        
        Spread
        
        what syndicate pays for share - what share sells for in market
        
        Selling concession
        
        Management fee
        
        Issue to market
        
        Syndicate
        
        Group of underwriters that market securities and share risk
        
        Types
        
        Firm commitment
        
        Syndicate bears risk of not being able to sell issues
        
        Best efforts
        
        Firm bears risk of issue not being sold
        
        Underwriters does not guarantee to sell entire issue
        
        Dutch Auction
        
        Investor bid for shares
      - Steps
        
        Obtain perms from board of directors
        
        Prepare and distribute preliminary prospectus (red herring) to OSC and investors
        
        summary providing info on issue of securities
        
        States risk
        
        For OSC to review and approve
        
        Price is determined and dealers begin selling issue
      - General Cash Offer
        
        New securities for sale to public
        
        IPO
        
        First issue to public
        
        Season Equity Offering (SEO)
        
        new issue from firm that has previously issued