SB15 - Raising Capital

call option

A right is basically a _ _

existing

A rights offering grants _ shareholders the right to buy new shares

1

A stock typically goes ex rights _ trading day(s) before the holder-of-record date.

debt, overvalued

After a new equity issue, a firms stock price may drop because firm has too much _ management believes firm is _

unseasoned new issue

An IPO is also known as an _ _ _

firm commitment

An investment bank that underwrites a security issue by buying securities under the offering price and accepting the risk is using the _ _ method and purchases entire issue

internet

Crowdfunding typically uses the _ to raise small amounts of capital from large number of people

avoided

Dilution of the ownership of existing shareholders can be _ with a rights offering.

new shares

Funds raised divided by subscription price is the number of _ _

excess demand

Green shoe provision is used to cover _ _ and oversubscriptions

underwriter

If a cash offer is a public offer, a _ is usually involved, also is an investment firm that acts as intermediate between company and public

direct

In a _ listing, a firm arranges for its stock to be listed on an exchange without marketing and other help from underwriter

nothing, sold, subscribe

In a rights offering, when an existing stockholder is notified that they have been given one right for each share owned they can Do _ and let the rights expire Order all rights to be _ _ to the full member of entitled shares

ICO

Many startups are now choosing to raise funds through a _

more

Market dilution is _ important than book dilution

privately issued

Most debt is _ _

40

Quiet period ends _ days after IPO

issued

Rights are _ by the firm, not a call option

dribble

Shelf registration allows firms to issue new equity through the _ method

alternate

Standby underwriting arrangement with rights offering gives the firm an _ avenue of sale to ensure success of rights offering

partial adjustment

The _ _ phenomenon refers to the fact that most firms may raise IPO offer prices, but do not move the price high enough

flotation

The _ costs are costs associated with new issue

winners

The _ curse describes how average investors in IPO receive full allocation of new shares because those in the know avoided the issue

lockup

The _ period is the tine where an agreement in underwriting prohibits insider shares being sold immediately following IPO

public

The large payoff for a venture capital firm typically comes when the company is either sold to another company or goes _

old, new

The number of rights needed to buy one share is found by dividing the _ shares by the _ shares

underpricing, number

There are pronounced cycles in the degree of IPO _ and the _ of IPOs

board approval

To issue a security to the public, management must obtain _ _

standby

Underwriter can purchase unsubscribed shares through _ underwriting

public

Venture capitalist makes big payoff when successful startup goes _

growth prospects, life cycle, size

Whether a frim obtains capital by debt or equity financing depends on The firms _ _ the firms _ _ stage The _ of the firm

highest

With the competitive offer method of selecting a syndicate, the issuing firm offers its securities to the _ bidding underwriter.

personal contacts, limited

_ _ are important in gaining access to VC market and access to venture capital market is _

privileged subscription

_ _ is another name for a rights offering

gross spread

_ _ is the difference between the price the issuer receives and the offering price

green shoe

_ _ provision is a contract provision that gives the underwriter the option to purchase additional shares from issuer at the offering price

financial strength, exit, style

_ _, strategy, and _ are important considerations when choosing between venture capitalists

initial coin offering

_ __ is initial sale of token on digital currency platform

underpricing

_ helps new shareholders earn a higher return on the shares they buy

dilution

_ is loss in existing shareholders value

crowdfunding

_ is the practice of raising small amounts of capital from a large number of people

aftermarket

_ is the time period after a new issue is initially sold to the public

cheaper

competitive underwriting is typically _ than a negotiated one

below

subscription price must be _ the market price of the stock in a rights offer