How should they choose a venture capitalist?

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FIN 3610 CUNY Bernard M Baruch College Venture Capital for Startups Paper

FIN 3610

CUNY Bernard M Baruch College

FIN

Question Description

 

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.

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