Fundamentals of Corporate Finance Third edition Ch apter 14 How Brealey Myers Marcus Corporations Issue ndamentals of Corporate Finan Securities Brealey Myers Marcus slides by Matthew will IrwinMcGraw-Hill CThe McGraw-Hill Companies, Inc, 2001
©The McGraw-Hill Companies, Inc.,2001 14- 1 Irwin/McGraw-Hill Chapter 14 Fundamentals of Corporate Finance Third Edition How Corporations Issue Securities Brealey Myers Marcus slides by Matthew Will Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc.,2001
14-2 Topics Covered sVenture Capital SThe Initial Public offering sThe Underwriters GEneral Cash Offers sThe Private placement Irwin/McGraw-Hill CThe McGraw-Hill Commpanies, Inc, 2001
©The McGraw-Hill Companies, Inc.,2001 14- 2 Irwin/McGraw-Hill Topics Covered Venture Capital The Initial Public Offering The Underwriters General Cash Offers The Private Placement
14-3 Venture Capital Ⅴ enture Capital Money invested to finance a new firm Since success of a new firm is highly dependent on the effort of the managers restrictions are placed on management by the venture capital company and funds are usually dispersed stages. after a certain level of success is achieved Irwin/McGraw-Hill CThe McGraw-Hill Companies, Inc, 2001
©The McGraw-Hill Companies, Inc.,2001 14- 3 Irwin/McGraw-Hill Venture Capital Since success of a new firm is highly dependent on the effort of the managers, restrictions are placed on management by the venture capital company and funds are usually dispersed in stages, after a certain level of success is achieved. Venture Capital Money invested to finance a new firm
14-4 Venture Capital First Stage Market Value Balance Sheet(Smil) assets Liabilities and equity Cash from new equity 0.5 New equity from venture capital 0.5 Other assets 0.5 Your original equity 0.5 Value 1.0 Value 1.0 Irwin/McGraw-Hill CThe McGraw-Hill Commpanies, Inc, 2001
©The McGraw-Hill Companies, Inc.,2001 14- 4 Irwin/McGraw-Hill Venture Capital First Stage Market Value Balance Sheet ($mil) Assets Liabilities and Equity Cash from new equity 0.5 New equity from venture capital 0.5 Other assets 0.5 Your original equity 0.5 Value 1.0 Value 1.0
14-5 Venture Capital 今99 氵 Second Stage Market Value Balance Sheet(Smil) Assets Liabilities and equity Cash from new equity 1.0 New equity from 2nd stage 1.0 Other assets 2.0 quity from 1st stage 1.0 Your original equity 1.0 Value 3.0 Value 3.0 Irwin/McGraw-Hill CThe McGraw-Hill Companies, Inc, 2001
©The McGraw-Hill Companies, Inc.,2001 14- 5 Irwin/McGraw-Hill Venture Capital Second Stage Market Value Balance Sheet ($mil) Assets Liabilities and Equity Cash from new equity 1.0 New equity from 2nd stage 1.0 Other assets 2.0 Equity from 1st stage 1.0 Your original equity 1.0 Value 3.0 Value 3.0