Things that need to understand if want to Finance
Important Note
- There is a very important concept in fundraising
- If you do not understand it, it can be risky during fundraising
- The risk is even higher for investors
What is Fundraising
- Fundraising is when a company brings in capital to grow and expand the business
- In return, investors receive shares and become new shareholders
- Key Difference (Very Important)
- Fundraising is not the same as share transfer
- Share Transfer:
- Existing shareholders sell their shares to cash out
- The beneficiary is the shareholder, not the company
- Fundraising (Issuing New Shares):
- The company receives new capital
- The beneficiary is the company, not the shareholders
Core Concept
- Fundraising involves share dilution
- Not share transfer