AFM274 Lecture Notes - Lecture 14: Angel Investor, Exit Strategy, Underwriting

• School: University of Waterloo
• Department: Accounting & Financial Management
• Course: AFM274
• Professor: James Thompson

Document Summary

Angel investors may be industry experts, exit strategy is ipo, threshold: 50 investors in canada, can not raise any more funds privately. Sovereign wealth funds are the wealth of countries: e. g. oil companies, corporate investors grow itself through acquisitions, preferred stocks allows the original owner to keep their equity stake in their original equity and. Firms are looking for an investment and an exit strategy or control (51%) brings in money through non voting preferreds: not dilute ownership. In an actual liquidation, plant and equipment would be sold off to debt holders before it reaches preferred shareholders: firm would not be liquidated if it can pay off all the shareholders in the first place. Family owned firms: two classes of common: class a. Family owned shares, senior to any other type of share: class b, most companies do not invest for the long term, original owners do not want share dilution, other people making decisions in the company.