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Chapter 9

Raising Long Term Capital

Concept of Financial Planning
Concept of Financial Planning
Financial planning is a critical aspect of business success. It involves forecasting future financial needs, setting objectives, and devising strategies. ...
Early-Stage Financing in a Business
Early-Stage Financing in a Business
Early-stage financing plays a critical role in the growth and success of new businesses. It gives startups the capital to transform ideas into viable ...
Financing through Venture Capital
Financing through Venture Capital
Financing is a critical pillar for any business, and venture capital (VC) is pivotal in fueling growth, especially for startups and high-potential ...
Choosing a Venture Capitalist
Choosing a Venture Capitalist
Choosing the right venture capitalist (VC) is critical for any business looking to scale and succeed. Venture capitalists bring more than just funding; ...
Selling Securities to the Public: The Basic Procedure
Selling Securities to the Public: The Basic Procedure
Selling securities to the public, commonly called an Initial Public Offering (IPO), involves a structured process regulated by securities laws to ensure ...
Drafting a Prospectus
Drafting a Prospectus
A prospectus is a formal document issued by a company when offering its shares to investors through an Initial Public Offering (IPO) or a Seasoned Equity ...
Advertising the Prospectus
Advertising the Prospectus
Advertising the prospectus is crucial in attracting potential investors when a company plans to issue securities in the market. A prospectus is a formal ...
Crowdfunding
Crowdfunding
Crowdfunding is a method of raising money from many people, usually via online platforms. It allows individuals, startups, or organizations to collect ...
Initial Coin Offerings
Initial Coin Offerings
An Initial Coin Offering (ICO) is a fundraising method cryptocurrency startups use to raise capital. It allows companies to bypass traditional financial ...
Alternative Security Offering Methods
Alternative Security Offering Methods
Apart from traditional methods like Initial Public Offering (IPO) and Initial Coin Offering (ICO), various alternative security offering methods exist for ...
Intital Public Offering: Concept
Intital Public Offering: Concept
An Initial Public Offering (IPO) is when a private company becomes publicly traded by offering its shares to the general public for the first time. This ...
Initial Public Offering: Importance
Initial Public Offering: Importance
An Initial Public Offering (IPO) plays a crucial role in a company’s growth and the overall economy. It allows private companies to raise significant ...
Secondary Offering: Seasoned Equity Offering
Secondary Offering: Seasoned Equity Offering
A Secondary Offering, or Seasoned Equity Offering (SEO), plays a crucial role in a company’s financial strategy and market dynamics. It allows publicly ...
Underwriting
Underwriting
Underwriting is a critical financial service vital in capital markets, facilitating companies’ access to the funding needed for growth and expansion. ...
Functions of Underwriter
Functions of Underwriter
Underwriters are vital in the financial sector, performing several critical functions beyond risk assessment and pricing. They also ensure that companies ...
Underwriting Group: Syndicate
Underwriting Group: Syndicate
An underwriting syndicate is a collaborative group of financial institutions formed to manage large securities offerings, such as initial public offerings ...
Choosing an Underwriter
Choosing an Underwriter
Selecting an underwriter is critical for businesses aiming to raise capital through securities. Underwriters play a key role in pricing, marketing, and ...
Types of Underwriting: Firm Commitment
Types of Underwriting: Firm Commitment
Firm commitment underwriting is a financing arrangement in which the underwriter guarantees a fixed sum to the issuing company by purchasing the entire ...
Types of Underwriting: Best Efforts
Types of Underwriting: Best Efforts
Best Efforts underwriting is a financial arrangement in which an underwriter markets a securities offering without guaranteeing the sale of the entire ...
Types of Underwriting: Dutch Auction
Types of Underwriting: Dutch Auction
Dutch auction underwriting offers a market-driven approach to pricing securities, emphasizing transparency and fairness. Unlike traditional fixed-price ...
The Secondary Market
The Secondary Market
The secondary market is a vital part of the financial system, facilitating the trading of securities such as stocks and bonds after their initial ...
The Green Shoe Provision
The Green Shoe Provision
The Green Shoe Provision, also known as the over-allotment option, is a critical tool used in Initial Public Offerings (IPOs) to ensure price stability ...
Lockup Agreements
Lockup Agreements
Lockup agreements are critical tools during initial public offerings (IPOs) designed to stabilize stock prices and control the supply of shares entering ...
The Quiet Period
The Quiet Period
The quiet period is a regulatory requirement imposed on companies preparing for an initial public offering (IPO) to ensure fair and transparent market ...
Direct Listing of Corporations
Direct Listing of Corporations
Direct listing is an alternative method for corporations to enter public markets by selling shares directly on a stock exchange. Unlike an initial public ...
Pricing in Initial Public Offering
Pricing in Initial Public Offering
The process of pricing an Initial Public Offering (IPO) significantly impacts the success of the public issuance. Beyond the chosen pricing mechanism, ...
New Equity Sales and the Value of the Firm
New Equity Sales and the Value of the Firm
New equity sales are a fundamental financial strategy firms use to raise capital for various business activities, such as expansion, debt reduction, or ...
The Costs of Issuing Securities
The Costs of Issuing Securities
Issuing securities entails various costs, collectively referred to as issuance costs, which reduce the net proceeds a company receives. These costs depend ...
Private Equity and Leveraged Buyout
Private Equity and Leveraged Buyout
Private equity (PE) plays a crucial role in the financial world by providing capital to businesses that need growth, restructuring, or expansion funding. ...
Dilution: Concept
Dilution: Concept
Dilution in finance refers to the reduction in the ownership percentage of existing shareholders when a company issues additional shares. While dilution ...
Types of Dilution: Percentage Ownership
Types of Dilution: Percentage Ownership
Equity dilution occurs when a company issues new shares, reducing the ownership percentage of existing shareholders. Different types of dilution impact ...
Types of Dilution: Value
Types of Dilution: Value
Value dilution occurs when a company's per-share value decreases due to the issuance of additional shares without a corresponding increase in the ...
Issuing Long-term Debt
Issuing Long-term Debt
Long-term debt is a critical financing mechanism for businesses seeking capital for expansion, acquisitions, or infrastructure investments. Unlike equity ...
Types of Long-term Debt: Term Loans
Types of Long-term Debt: Term Loans
Term loans are a crucial form of long-term debt financing businesses use for capital-intensive investments. These loans typically feature a structured ...
Types of Long-term Debt: Private Placements
Types of Long-term Debt: Private Placements
Private placements offer a strategic alternative to public offerings for businesses seeking long-term financing. This method allows companies to raise ...
Shelf Registration
Shelf Registration
Shelf registration is an essential tool for companies to raise capital flexibly and efficiently. It is a provision by the Securities and Exchange ...
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