11/25/15
Equity Financing
- What are various sources of equity investments?
- Super Angels: Well off individuals who have higher amounts of money to invest in innovative ventures.
- Private Equity: Venture capital, growth capital, mezzanine capital, leverage buyout
- Public Stock: Holding shares or selling shares from the company.
- What guidelines should entrepreneurs follow when they are selecting a venture capitalist?
- Scrutinize business with a critical eye
- Beef up management
- Keep a high profile so the VCs will visit, attract potential investors
- Target the search
- Keep a lookout for smaller VC firms
- Investigate possible venture partners so when in a meeting it can run smoothly and be successful
- What are the differences between a single-hit and a home-run business?
- Single-hit:
- Does not have a sustainable business model
- Does not have a sustainable product/service
- Home-run:
- Long-period business
- Needs more investing
- Needs more innovations if you want to continue with new products
- Single-hit:
- What are the four key factors that a banker seeks before providing a corporate loan?
- Characters that includes talent, reliability and honesty.
- Cash Flow to cover debt throughout the term.
- Collateral to support part of the loan should the company not be able to meet its obligations.
- Contribution by the entrepreneur towards the funding requirement.