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Commerce (1,690)
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3FA3-CH15.docx

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Department
Commerce
Course
COMMERCE 3FA3
Professor
Trevor Chamberlain
Semester
Winter

Description
Commerce 3FA3 Chapter 15 Raising Capital All firms must at varying times obtain capitalVenture CapitalFinancing for new often highrisk venturesThe fact that financing is available in stages and is contingent on specified goals being met is a powerful motivating force for the firms founders In addition to providing financing venture capitalists often actively participate in running the firm Providing the benefit of experience with previous startups as well as general business expertiseChoosing a Venture Capitalist 1 Financial strength is important 2 Style is important 3 References are important 4 Contacts are important 5 Exit strategy is importantThe Public IssueCreation and sale of securities on public markets A firm issuing securities must satisfy a number of requirements set out by provincial regulations and statutes and enforced by provincial securities commissionsThe Basic Procedure for a New Issue 1 Obtain approval from the board of directors2 The firm must prepare and distribute copies of a preliminary prospectus to the OSC and to potential investors Prospectus Legal document describing details of the issuing corporation and the proposed offering to potential investorsRed Herring Preliminary prospectus distributed to prospective investors in a new issue of securities3 Price is determined and a fullfledged selling effort gets under waySeasoned new issue A new issue of securities by a firm that has already issued securities in the pastInitial public offering IPO A companys first equity issue made available to the public Also an unseasoned new issueAlternative Issue MethodsGeneral cash offer An issue of securities offered for sale to the general public on a
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