Management and Organizational Studies 1023A/B Lecture Notes - Lecture 7: Venture Capital Financing, Startup Company, Preferred Stock

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

Document Summary

It is common practice to syndicate seed-and early-stage venture capital investments: syndication occurs when the originating venture capitalist sells a percentage of a deal to other venture capitalist, syndication reduces risk in two ways: Initial public offering: selling common stock in an initial public offering (ipo) Investment - banking services: to complete an ipo, a firm will need the services of investment bankers, who are experts in bringing new securities to the market, helps company go public properly. Investment bankers provide three basic services when bringing securities to the market: origination. Includes giving the firm financial advice and getting the issue ready to sell. Investment bank resells it for : this gives a higher risk to the investment banks. Ipo pricing and cost: three basic costs are associated with issuing stock in a ipo, underwriting spread, the difference between the proceeds the issuer receives and the total amount raised in the offering.