DANCEST 805 Lecture Notes - Lecture 11: Capital Structure, Growth Capital, Preferred Stock

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2 Nov 2020
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Iapm s8: private equity part 3 - strategies. Or businesses owned by families wanting ot cash out: earning return on investment: lbo firms build value in firms they acquire (improve profitability, increase sales, purchase related business and combine etc) 1. 1 middle market: companies with revenues 10-250$ million; assets 200-500$ million; ebitda less than 50$ million. Venture capital firms: sub-category of pe firms, provide risk capital for starting, expanding and acquiring companies: most are specialised, investing in single field or at a specific stage. Seed-stage firms: provide few hundred thousand dollars and office space to entrepreneur who needs to develop business plan; riskiest investments with highest failure rates. Early-stage venture investors: back companies at a point where they have completed a business plan, management team in place, maybe even working prototype. Late-stage investors: provide second or third-round financing (often 2-10) that funds protection, sales, marketing and carries company into revenue-producing stage.

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