Capital Raising

Capital raisingCapital raising is one of the most important tasks when you are starting a new venture. Tough as it may sound, raising capital can be an easy achievement if you are strategic in your route.

Primary market-

Many companies take the help of primary market for capital raising. Primary market can be defined as the one where a security gets issued first. When a company wants to issue the securities for raising long term or short term capital, the firm forays into primary market as issuer. By issuing the securities, the companies can divide significant capital outlays in smaller units. The securities cover varied forms like bonds, shares, warrants, debt securities etc.

Secondary market

Secondary market is also useful for capital raising. The primary difference between primary and secondary capital market is that – in case of the former you enter as issuer while you are a trader in the second. Secondary market offers an excellent platform for any company to raise capital by trading the securities. The trading here takes place amidst different investors.

Private participation

Private participation is another way for capital raising. You have to pitch your business to minimum 50 prospective investors, go through 20 second meetings, gain interests from ten till you finally achieve 3-4 term sheets. You can start with known and friendly investors for participation but do not hesitate to network with those whom you do not know. You have to be really inspiring in your pitch, without being too pushy. A persuasive pitch will not only motivate your targeted investors for participating actively in your venture but can even convince them to percolate your idea to fellow investors- assuring further private participation in your field.

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