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| first money provided by venture capitalists and involves an initial investment up to several million dollars. company usually doesn't even have tangible products, just an idea |
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| involves investment by venture capitalists up to several million dollars or more in private companies that have tangible products that will soon be marketed |
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| product seems to be gaining acceptance. funds are needed to finance inventories, production processes, shipping, etc. investments range from 1-20 million. |
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| company has matured and needs additional funding for growth and product expansion. several-20 million. |
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| source of capital for entrepreneurs. majority of funding went to follow-on funding. tech and biotech companies account for 50% of venture capital financing. |
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| primary securities market |
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| involves the sale of newly issued stocks and bonds to investors |
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| a preliminary prospectus. based on info, underwriters will poll prospective investors. |
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| issuing firm and its investment bankers conduct this and describe the offering to institutional investors |
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| 20 day registration period |
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| placed in financial newspapers to describe the final details of the offering and to list the investment banks that participated in the underwriting syndicate |
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| when an investment bank purchases newly issued securities from a company and guarantees a fixed price |
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| type of underwrite. investment bank purchases all shares of the offering from the issuer at an agreed upon price and takes responsibility for resell to public |
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| type of underwrite. investment bank doesn't commit to purchase the share from the issuer |
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| over-allotment option granted to investment banks, they can sell up to an additional 15% of the offering to investors |
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| surviving entity in a merger |
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| firm being acquired into other firm |
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| two or more firms combine, with one firm acquiring the other, to form a single firm |
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| two or more firms combine and form a new firm separate from the previous firms |
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| ranges from as little as a marketing agreement to as much as a joint venture |
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| attempt to acquire a company is resisted by target |
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| acquiring firm may offer to buy shares directly from the shareholders regardless of mgmt. position |
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| group a outsiders try to gain control of a corporation by persuading existing shareholders to oust the current board of directors and elect a new board |
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| merger between two firms in the same line of business at the same level of production |
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| merger within the same industry, but at different levels of production |
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| merger of two companies that have unrelated lines of business |
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| easiest way to delay a merger by immediately filing a lawsuit against the bidding firm |
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Definition
| involve the divestiture of a business division via a distribution of the common stock of the subsidiary to the shareholders of the parent company in the form of a stock dividend |
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