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Equity financing is an alternative to dept financing and is basically an acquisition of funs by selling common or preferred stock to individual or institutional investors. In return for the money paid, shareholders receive ownership interests in the corporation.
Company can finance equity through:
- Private equity companies financed by institutional investors (such as investment banks, funds etc) and private investors. There is a wide array of types and styles of private equity and the term "private equity" has varying connotations in different countries. Among them are:
- Venture Capital (also known as VC or Venture) is a type of private equity capital typically provided to early-stage, high-potential, growth companies. Generally, VC fund investors accept a higher risk of failure than is normally the case for other more conservative investments.
- Mezzanine capital that is a broad financial term that refers to unsecured, high-yield, subordinate debt or preferred stock. Mezzanine capital represents an intermediary between equity and debt in a company's balance sheet.
- Initial Public Offering (IPO) also referred to simply as a "public offering" or "flotation," is when a company issues common stock or shares to the public for the first time. The money paid for the new shares for the company will be used for new investments, lessening the loan burden etc. The initial public offering is usually followed by listing the company's shares on the stock exchange: http://www.nasdaqomxbaltic.com
- First North Baltic is an alternative marketplace for small growth companies, providing a wealth of opportunities on the Baltic financial markets. First North is a part of NASDAQ OMX Nordic Exchange: http://firstnorth.nasdaqomxbaltic.com/?lang=en
The list of institutional investors in Estonia
Account operators
Investment companies
Investment banks
Venture Capital
Private Equity
Real Estate Investors
Mezzanine Financing
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