In finance class, there was a group project. All members in a group stayed in touch, they joined each other’s LinkedIn network. Each are now successful entrepreneurs with experience, and they are about to start a new company together. (attached is picture of page 497 of the book)
– How should they choose a venture capitalist?
– What are the important considerations when choosing a venture capitalist?
Here is the summary of process for issuing securities to the public:
-Obtain approval from the Board of Directors
-File registration statement with the Securities and Exchange Commission (SEC)
-SEC requires a 20-day waiting period company distributes a preliminary prospectus called a red herring. Cannot sell securities during waiting period.
-The price is set when the registration becomes effective and the securities can be sold.