Essay On Raising Capital

In order to raise capital for the venture, I would first need to determine what funds are available, which ones who be best for the venture, and how I would go about obtaining those funds for the venture. Carter explains that there are two key issues or factors that come into play when determining which kind of capital is the best for a new venture: (a) Usually the search for financing is precipitated by a rejection of an existing bank relationship, and (b) understanding why the company needs capital will determine what type of financing is most appropriate. (Carter, April 2011, pg. 47)

Investing money is a major means of generating extra cash that people often participate in. A stock market is a place where investors trade certificates of partial ownership in businesses for a set price. “Through these transactions, companies can raise the initial capital necessary for various aspects of operation, and those who buy the certificates become entitled to a portion of the business' assets and earnings (Kelsey).”

An Entrepreneur is a person who forms and operates a business. Entrepreneurs form and start companies by themselves, or with partners. Most of the time companies which are started by entrepreneurs are relatively small in size, but some grow into huge corporations, such as Microsoft which is owned by Bill Gates. Entrepreneurs have four different options when starting a business, which include a sole proprietorship, Partnership, limited liability company, and also a corporation. Each form has its advantages and also disadvantages depending on what the type of business is, and also what service it provides.

In this chapter, Wheelan discusses the basics of what we, as citizens should do with our money in order to produce more in the long run. He mentions quite a few steps explaining what you should do in each, but since this assignment is about being descriptive and brief, I’ll only talk about the ones that really caught my eye; raising capital, speculation, and save, invest, repeat. Raising capital talks about how in today’s society credit allows us to spend money that we don’t have (pg. 150). When raising capital we’re collecting and raising the revenue. Collecting from investors through loans, bonds and debit. When talking about speculation in this chapter, the author uses buying a townhouse that is in the same shape as the others around

Investing. To invest in bonds, common or preferred stocks (including securities of any corporate fiduciary or of any affiliated corporation), notes, options, common trust funds, mutual funds, shares of any investment company or trust or other securities, life insurance, partnership interests, general or limited, limited liability company interests, joint ventures, real estate, or other property of any kind, regardless of diversification and regardless of whether the property would be considered a proper estate investment;

An investment is when you put money into financial schemes, shares or property, with the expectation of achieving a profit. The three company shares that I am going to suggest to you are Macquarie Group (bank), Telstra and the Qantas. The two other investments are Buying a Real Estate e.g. house, apartments and Buying a Business.

Using debt is also advantageous to existing owners because of the effect of financial leverage. When companies use debt to provide addition capital for their business operations, equity owners get to keep any extra profits generated by the debt capital, after any interest payments. Given the same amount of equity investments, equity investors have a higher return on equity because of the additional profits provided by the debt capital. As long as using debt doesn’t threaten the financial soundness of a company in times of difficulties, equity owners welcome certain debt uses to help enhance their investment

The team shared the importance of having a good bank to raise the capital. It is also important to know the time frame to pay off the amount, pay schedule and having a good plan to pay off the amount on time is crucial. The question about buying things, owning things, renting things and leasing things- all depends on whether the business

Investing plays a huge role in any country, business or individual’s life. Investing is the action or process of purchasing an asset in hope that it will generate income and ultimately appreciate within the future. They can be goods that are not used right away, but held onto and used in the future in order to create wealth, or a monetary asset that will provide income in the future and will be sold at a higher price for a profit.

Entrepreneurship is often praised as one of the paths to pursue in order to become rich in America. This may not be the case anymore because of the increase in inequality and shift in the role of self-employment, entrepreneurship in America is not the same as what many may think of a big risk for big reward.

What does the term investment mean to the everyday individual? Investment by definition, generally, refers to putting money to some type of use through either a purchase, or an expenditure that in turn offers a potential for a return that is profitable. For example, an individual sells a business and realizes a net gain of two hundred thousand dollars; this individual has a plethora of choices concerning this gain in funds. First, he can place the monies in a traditional bank account, usually at a low rate of interest, which is figuratively speaking referred to as sitting on the money, or the individual could utilize the funds for the basis of investment in the stock market with a potential to earn a greater percentage interest rate over a period of time. Of course, an investment and the creation of a stock portfolio offer the potential for the greater return value. However, this course of action requires careful considerations because as Maranjian (2013) reports that in financial concerns there always exist a definite correlation between a return and a risk with a risk representing the potential of money loss, and return the profit driven aspect of an investment.

Nearly three quarters of all U.S. households invest in the stock market. And half of all U.S. households invest in mutual funds—the nation’s fastest growing type of investment. Some investors are saving for a comfortable retirement, other’s for a child’s education. Whatever their goals, shareholders benefit from broad diversification, professional investment management, and ready access to their money. If one decided investing was a sound way to secure their financial future, their next step is to build a balanced portfolio by selecting an investment company and/or suitable investment types. While it may seem daunting—and even overwhelming—there is always someone who stands ready to help an investor.

In business, companies will always have to raise capital at some stage either because a company needs start-up capital or needs capital to expand. This is an important part of the financial planning structure for businesses because they all require an initial investment to meet their requirements. The majority of people automatically think Initial Public Offering (IPO) when they hear of a company raising capital. It is the basic procedure for a company to make it publicly known that they are selling their securities. In reality, raising capital can be done in many ways, which include loans, leasing and getting investors, which are all classified as small-scale ways of raising capital. Larger ways of raising capital are attracting angel investors, venture capitalists and offering equity. Starting a business without a steady income and constant lessening of whatever savings you may have is one of the most difficult circumstances to be under. For my own business I have used my savings and personal credit, which unfortunately is a limited supply of money. The need for capital never ends and that is why considering your market need, potential competition, risk & return and sources of potential funding are essential to look at before making any decision involving raising capital.

The relationship between capital structure and firm value has been discussed frequently in the literature by different researcher accordingly, in both theoretical and empirical studies. It has also been discussed that whether the firm has any optimal capital structure that has been adopted by an individual firm, or whether the proportions of debt usage is completely irrelevant to the individual firm value.

Entrepreneurship is defined as the process of designing, launching and running a business. It typically begins as a business idea such as starting a small business, offering a product or service. What is unique about this venture is the possibility and level of risk involved for instance lack of funds, an unforeseeable economic crisis or poor business decisions. Entrepreneurship is about how people identify opportunities, evaluate whether they are viable and then decide to exploit them or not. The decision to exploit an opportunity or not depends on several factors that the entrepreneur is responsible for including cost versus how much the idea will generate, the market demand, and the risks involved. An entrepreneur is thus an innovator