Equity Financing

11 important questions on Equity Financing

What are the various sources of Fundings  for Later Stages?

  • Super-Angels
  • Institutional Venture Capital
  • Private Placements
  • Corporate Debt
  • Strategic Partnerships
  • Mezzanine Finance
  • Initial Public Offerings

What are the invesment categories in Private Equity?

  • Venture Capital
  • Leverage Buyout
  • Growth Capital
  • Distressed or special situations
  • Mezzanine Capital

Which Avenues are there so Private Equity firms receive a return on investment?

  • Initial Public Offering
  • Merger or Acquisition
  • Recapitalization
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What are the two fundamental ways of making calculation for Venture Capital Model?

  1. Cash Flow Estimates
  2. Strategic Sale

What are the various Validation Methods to value a business?

  • Venture Capital Model
  • Milestone Methods

What are the "Four Cs" of credit?

  • Character
  • Cash Flow 
  • Collateral
  • Contribution

What seven keys does a Loan Proposal consist of?

  1. Summary 
  2. Management Team Profiles 
  3. Business Description
  4. Financial Projections
  5. Financial Statements
  6. Amount and Purpose 
  7. Repayment Plans

What is the guide to selecting a Venture Capitalist?

  1. Scrutinize your business with a critical eye
  2. Beef up management 
  3. Keep a high profile so the VCs will visit
  4. Target the search
  5. Keep a lookout 
  6. Investigate possible venture partners

What are the factors that might influence a Venture Capital firm's funding decisions?

  • Specialized Industries for the venture
  • Location of the venture
  • Stage of Fund
  • Stage of Development

What are important terms in Preferences and Covenants?

  • Board Membership
  • Management Decisions
  • Registration Rights
  • Later Rounds
  • Antidilution Rights
  • Forcing Exit
  • Piggybacking

What is Preferences and Covenants?

Terms negotiated by investors when making an investment.

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