Capital Markets Overview

The process of transferring financial resources from savers to borrowers.

A marketplace where investors and entrepreneurs connect to raise and invest capital.

This market enables entrepreneurs to raise capital for new ventures, expansion or diversification.

A new company's first attempt to raise capital by issuing securities to the public.

A public offering of new securities by a company that has already issued securities before.

Raising capital by selling new shares directly to a select group of investors.

Selling new shares to the general public through an IPO (Initial Public Offering).

Existing shareholders are given the right to buy new shares at a discounted price before they're offered to the general public.

The initial capital required by an entrepreneur to develop a new product or service before it is commercially available.

The stage of funding where a business idea is further developed and tested, becoming a tangible product or service ready for the market.

The second round of funding after a product is launched, focusing on market expansion, modernization, and diversification.

The final stage of venture capital financing, aiming to prepare the company for a public offering (IPO) or other exit strategies.

A crucial stage where the entrepreneur must convince investors of the product's viability, presenting a compelling business case for the investment.

A crucial stage where the entrepreneur must develop a prototype, test the product, and establish initial sales channels.

The stage where the product is already in the market, and the entrepreneur seeks funds to expand production, improve operations, and gain market share.

The last stage of venture capital financing for a company that has achieved a certain amount of market share. The goal is to prepare the company for an exit, such as an IPO, sale, or merger, allowing investors to cash out their investment.

A group of individuals or institutions that invest in early-stage companies with high growth potential.

A detailed document outlining the business strategy, financial projections, and market analysis of a new venture, presented to potential investors.

Offering shares to employees as a way to incentivize and motivate them.

A company using its public stock to acquire other businesses, expanding its operations.

Public companies are typically valued higher by the market compared to private companies due to factors like transparency and liquidity.

The trading price of a public company's stock serves as a benchmark for the pricing of other securities.

Public companies have access to larger pools of capital due to their stock listed on exchanges.

A public company's listing can attract and retain talented employees by offering stock options and incentives.

Public companies are subject to higher scrutiny and reporting requirements mandated by regulatory bodies.

Public companies need to deliver consistent growth in dividends and profits to satisfy shareholder expectations.

Public companies are more vulnerable to takeover bids due to their readily available shares.

Going public involves significant costs for complying with strict regulatory requirements and reporting standards.

Going public can result in a loss of privacy for entrepreneurs and company executives due to greater public scrutiny.

Entrepreneurs need to carefully consider their financial needs and how an IPO will affect their future funding plans before going public.

Affluent individuals who invest in early-stage, high-risk, high-return companies in exchange for equity or convertible debt.

The funding stage where angel investors typically participate, bridging the gap between "friends and family" funding and venture capital.

The risk that angel investors face, as their investments may not provide a return or even be lost.

A pool of capital invested in early-stage, high-growth, and high-risk companies, usually with a long-term investment horizon.

The core business of venture capitalists, which involves identifying and funding these high-risk ventures.

Businesses supported by venture capital, typically characterized by rapid growth potential and innovative ideas.

Individuals who manage and invest venture capital funds, seeking to generate returns by supporting high-growth companies.

The long-term investment approach of venture capitalists, typically spanning five years or more, to support the growth of companies.

Funding for initial activities, such as product development, market research, and team building.

The stage before formal start-up, involving business plan creation and securing resources.

Venture capital is a form of _______, a broad category of private equity investments.

The process of venture capitalists carefully analyzing an investment opportunity before making a decision.

The strategy venture capitalists use to exit their investment, typically through a sale of the company to another investor or a public offering.

Venture capitalists seek businesses with _______ that have the potential to disrupt markets, solving customer problems in new ways.