welcome to watchmojo.com in today’s
business school bit we take a look at an
alternative form of financing equity
equity is different from debt in the
sense that you are not borrowing money
from anyone be at an organization or a
person when you raise money through
equity you are effectively selling a
percentage of your company to an
institution or a person there are four
forms of equity financing the first one
being seed seed investments can come
from a person as it can come from a
venture capitalist scene takes place at
a very early stage as the name when it
implies when you only have an idea and a
vision the second stage is usually when
VCS come in this is after the seed has
already been invested and there is some
kind of track record that the company
has demonstrated the third stage is the
bridge or mezzanine stage where the
company has clearly demonstrated its
leadership in the marketplace but is
looking for additional funds to grow its
business again AVC could be the same one
that invests at the bridge and the
fourth form of financing equity wise is
actually in effect and exit strategy and
that is the IPO or initial public
offering where the original investors
and founders of the company exchange the
percentage of their holdings for money
to the greater public we saw Google do
this a couple years ago most of the
successful companies around have had
IPOs we mentioned exit strategies one
exit strategy whereby investors get to
gain some liquidity and get some money
is an IPO the second form is simply when
investors decide that they’d rather not
do the IPO route and simply sell their
company to another one we saw skype do
this recently when they sold to ebay but
before you think about exit strategies
and I POS you need to get your business
off the ground and your two choices of
financing our debt or equity this this
has been today’s business school bit on
watchmojo.com
business school bit we take a look at an
alternative form of financing equity
equity is different from debt in the
sense that you are not borrowing money
from anyone be at an organization or a
person when you raise money through
equity you are effectively selling a
percentage of your company to an
institution or a person there are four
forms of equity financing the first one
being seed seed investments can come
from a person as it can come from a
venture capitalist scene takes place at
a very early stage as the name when it
implies when you only have an idea and a
vision the second stage is usually when
VCS come in this is after the seed has
already been invested and there is some
kind of track record that the company
has demonstrated the third stage is the
bridge or mezzanine stage where the
company has clearly demonstrated its
leadership in the marketplace but is
looking for additional funds to grow its
business again AVC could be the same one
that invests at the bridge and the
fourth form of financing equity wise is
actually in effect and exit strategy and
that is the IPO or initial public
offering where the original investors
and founders of the company exchange the
percentage of their holdings for money
to the greater public we saw Google do
this a couple years ago most of the
successful companies around have had
IPOs we mentioned exit strategies one
exit strategy whereby investors get to
gain some liquidity and get some money
is an IPO the second form is simply when
investors decide that they’d rather not
do the IPO route and simply sell their
company to another one we saw skype do
this recently when they sold to ebay but
before you think about exit strategies
and I POS you need to get your business
off the ground and your two choices of
financing our debt or equity this this
has been today’s business school bit on
watchmojo.com
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