Management and Organizational Studies 1023A/B Lecture Notes - Initial Public Offering, Venture Capital Financing, Private Equity Firm

• School: Western University
• Department: Management and Organizational Studies
• Course: Management and Organizational Studies 1023A/B
• Professor: Maria Ferraro

Document Summary

The process by which many entrepreneurs raise seed money and obtain other resources necessary to start their businesses. The initial seed money usually comes from the entrepreneur or other founders. Other cash may come from personal savings, the sale of personal assets, loans from family and friends, use of credit cards. The seed money, in most cases, is spent on developing a prototype of the product or service and a business plan. Venture capital (move company from bootstrapping period ex. Venture capitalists are individuals or firms that help new businesses get started and provide much of their early-stage financing. Individual venture capitalists or angel investors, are typically wealthy individuals who invest their own money in emerging businesses at the very early stages in small deals. The venture capitalists" investments give them an equity interest in the company. Often in the form of preferred stock that is convertible into common stock at the discretion of the venture capitalist.