Management and Organizational Studies 1023A/B Chapter 4: FINANCING AND DISTRIBUTION

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

Document Summary

Bootstrapping how new businesses get started: rarely from large corporations. Governments can do little to provide equity capital needed initial funding of the firm: Emerged in the 60s significant number of firms focus on high-technology investments why venture capital funding is different: Ipo: selling common stock: a vc will typically will not typically sell all of the shares he or she holds at the time of the ipo (sends a bad signal to investors) venture capitalists provide more than financing: Extent of involvement depends on the experience of the management team important role to provide advice: may want a seat on the board of directors and unrestricted access to information, authority to install new management if necessary. Because of industry and general knowledge about what it takes for a business to succeed, they provide counsel for entrepreneurs: during early stages of operations the cost of venture capital funding: