Equtity and Ipo

In: Business and Management

Submitted By belial25
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FINS3625 Applied Corporate Finance

Lecture 6 (Chapter 14) Jared Stanfield April 4, 2012

14.1 Equity Financing for Private Companies • Sources of Funding:

– A private company can seek funding from several potenNal sources:

• Angel Investors • Venture Capital Firms • InsNtuNonal Investors • Corporate Investors

14.1 Equity Financing for Private Companies • Angel Investors: – Individual investors who buy equity in small private firms – The first round of outside private equity financing is oSen obtained from angels

14.1 Equity Financing for Private Companies • Venture Capital Firms: – Specialize in raising money to invest in the private equity of young firms – In return, venture capitalists oSen demand a great deal of control of the company

Figure 14.1 Most AcNve U.S. Venture Capital Firms in 2009 (by Number of Deals Completed

Figure 14.2 Venture Capital Funding in the United States

14.1 Equity Financing for Private Companies • InsNtuNonal Investors: – Pension funds, insurance companies, endowments, and foundaNons • May invest directly

• May invest indirectly by becoming limited partners in venture capital firms…...

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