Abstract This paper provides a brief history of the venture capital business in the U.S., showing how it has been associated with technological enterprise from the very beginning. The writer explains how venture capital funding works by procuring financing through finding investors who are seeking to invest money in non-stock ventures that are more risky but have a much higher potential reward yield. Since venture capitalists review venture requests on a case-by-case basis, the presentation of the request is the most essential consideration in venture capital acquisition. Keeping the presentation simple and to the point is key to obtaining venture capital.
From the Paper "As far as companies backed by venture capitalists, the first modern venture capital startup is thought to have been Fairchild Conductor in 1959, supported by Ventrock Associates. Before World War II, venture capital endeavors were considered to be the domain of wealthy families and wealthy business interests. A significant precursor to the venture capital it industry was the 1958 Business Investment Act, which enabled the government's Small Business Association to provide financing resources and guidance for small businesses looking to start up, thereby giving the American everyman the opportunity to start their own business, regardless of social or economic class. In effect, this gave rise to the modern American ideal of the small business owner."
Abstract As in any business, capitalfinancing in the health care field, is very important. Without proper financial planning, budgeting and working capital, a company is headed for financial ruin. This paper shows that obtaining capital can be done in various ways and should be well planned and executed. If properly planned, a business has a good chance of survival. Without planning, bankruptcy could be the result.
From the Paper "St. Vincent's Catholic Medical Centers, a New York healthcare provider, announced that it would file Chapter 11 bankruptcy protection after losing its working capital loan. St. Vincent's defaulted on $30 million of its pre-petition loan committed by HFG (Healthcare Finance Group), which had agreed to provide a total of $100 million, in DIP (Debtor-in-Possession) financing. DIP financing is used in bankruptcy so that while the bankruptcy is being processed the business will have working capital for the duration. In many cases, DIP financing is considered attractive because it is done only under order of the Bankruptcy Court and allows the company to execute a Plan of Reorganization (POR)."
Abstract This paper considers the different means available to hospitals for financingcapital construction projects. The focus is on mortgages and bond issues. The paper touches on the general outlines of these methods of financing and discusses the characteristics of success funding arte in an effort to define the way hospitals can increase their likelihood of successfully raising funds.
From the Paper "The financing of hospital construction projects has become an important public health issue in the past several decades. As the population has burgeoned through an influx of immigrants and a newly-expanding birth rate, and as the large "baby boom" population moves through middle age into retirement years, the demand for services that hospitals provide has grown. Concurrently, the sources of financing for hospital construction have shifted from public and philanthropic contributions to incursion of long-term debt (Washington State Department of Health, n.d.)."
Abstract This paper examines how choosing which financing vehicle is best for a company is very important and how equity and debt financing are financial mechanisms by which a firm can raise financial capital. It looks at how the characteristics of each of these two groups depend on three variables: investors' claims on future cash flow, their right to participate in company decisions and their claims on company assets in liquidation. The paper examines the benefits and disadvantages of both.
Outline
Introduction
Characteristics of Equity Financing Advantages of Equity Financing Disadvantages of Equity Financing Characteristics of Debt Financing Advantages of Debt Financing Disadvantages of Debt Financing Contrast Between Equity and Debt Financing The Capital Structure Decision
The Irrelevance Proposition
Conclusion
References
Appendix
From the Paper "Equity financing is the act of raising money for company activities by selling common or preferred stock to individual or institutional investors. In return for the money paid, shareholders receive ownership interests in the corporation. Equity (or common stock) offers residual claims. On a balance sheet, equity equals total assets less all liabilities. Equity financing is generally recommended for a business that's experiencing very high growth with high investment risk. The major sources of equity financing include individuals starting the business, friends and family, angel investors, venture capitalists, and public equity markets. Equity can take several forms including preferred stock, common stock, limited partnership interest, and project equity."
Abstract This paper discusses that professional venture capital firms are closely held corporations or private partnerships funded by public and private pension funds, endowment funds, corporations, wealthy individuals and foreign investors; they invest venture capital in both start-ups and established companies, thereby, leveling out their risks and ensuring a net positive return. The author points out an attractive feature of VC is that it provides the opportunity for investors to aim for very high returns, which no other financial instrument can provide. The paper relates that, while the debate continues as to whether VC really is the driver for industrial development, it is widely accepted that VC is a key tool in furthering three major economic objectives, namely, transfer, widen industrial base, and assistance in setting up of new businesses.
Table of Contents
Introduction
Definition of Venture Capital Legal Status of VC Firms
Evolution of Venture Capital in the U.S.
Venture Capital Trends in the U.S.
Venture Capital in the Europe
United Kingdom
Canada
Australia
China
Impact of Venture CapitalFinancing on Economic Performance
Successful VC Backed Companies
Conclusion
From the Paper "As the firm expands, it may need more capital, which is provided by second round finance. When the firm reaches breakeven point or has already started making small profits, it will need funding for expansion of the business. This critical requirement in met by expansion capital, which drives the firm to maximize profits. Management buy out is the finance granted to the firm's management and investors to acquire an existing product line or business. As opposed to this is the Management buy-ins where funds are provided to managers outside the firm to buy into the firm with the support of venture capital investors. Finally, mezzanine financing is supplied to the firm to enable it to complete a trade sale or go in for public floatation of the firm's shares."
Abstract This paper explains an organized and well-planned capital market guarantees that investments are safe and with limited risks; however, the presence of the money market, the market from which banks borrow or lend finances to each other, cannot be ignored. The author points out that securitization and credit derivatives have resulted in the ability to spread credit risks across different sectors of the financial system. The paper relates that the health of the global financial system is an issue of major concern to the U.S.A. and to the entire world; therefore, several multinational organizations, such as the World Bank and the International Monetary Fund (IMF), assist countries that are faced with financial problems and developmental requirements.
From the Paper "Robust capitalization and strong earnings is a must for any country if there were to be a line of defense against losses; when the capital of a country is strong, then these losses can be countered with ease. If there were indeed loss of any kind, or a negative incident of some sort, then capitalization would help restore the loss of confidence in the customers and the counter parties who would at first attempt to pull out of the institution. Therefore, it is evident that capital is capable of insuring the financial institutions against the system of "runs", both traditional and on franchise value. The traditional run is one in which the issues at stake are those of short term funding, and short term liquidity, whereas for the franchise run the issues that are brought into play are those of the gradual withdrawal of customers from the financial institution on account of the loss of confidence suffered as a result of the losses that the institution has been through."
Abstract This report attempts provides insight into Dana Corporation's capital structure. The paper focuses on identifying the company's book value, market value, and the levered value. The report then demonstrates, through a quantitative analysis, what a twenty percent increase in assets will do for Dana Corporation, and assumptions are made to recommend an optimal capital structure mix. The analysis incorporates an estimation of Dana Corp's cost of capital, price per share, and the overall market value of the firm.
From the Paper "The relationship of the stockholder's equity to total liabilities has been shown to be the most significant indicator of a company's solvency because it provides the ratio of capital provided by the stockholders as compared to capital provided through creditors. The information obtained through the analysis in this report provides answers to the ever important question of whether or not a company should issue stock or carry debt. Unsophisticated investors often wonder why a company would purposely carry debt and one excellent motivation derived from the Modigliani-Miller (M&M) model demonstrates that debt can and often is used as a shield against taxes. If a company like Dana decides, therefore, to carry debt, the tax shield would be used to lower overall costs. The next idea then is for a company like Dana to obtain an ideal or optimal mix between debt and equity."
A comparison of the style and focus of Steven K. Vogel's article, "The Crisis of German and Japanese Capitalism" and Gary Teeple's article, "The Global Economy and the Decline of Social Reform."
Abstract This paper discusses and compares Steven K. Vogel's article, "The Crisis of German and Japanese Capitalism" and Gary Teeple's article, "The Global Economy and the Decline of Social Reform." It describes the different style and focus of each article, as well as their similarities, especially in their main focus on modern day economic globalization and the current state of capitalism.
From the Paper "The thousands of Canadians who recently had to line up to get passports to cross the world's longest "friendly border" and enter the territory of our nearest neighbour most likely did not feel as if they were at the end of the era of the nation-state. Similarly, Canadian/Syrian national Maher Arar, who was allegedly deported to Syria via Jordan by the US government in 2002, there to be detained and tortured for a year, most likely did not feel as if he was living in the era of the end of the nation-state (Amnesty International, 2003). A year of being tortured in the name of national rivalries and animosities between two different nation states would cause most people to believe quite strongly that the nation state was alive and well. On the other hand, Teeple's analysis goes to the macro economic forces that operate below the surface, and it might be possible to simultaneously believe in the end of the nation-state in relation to economics, while allowing that deeply held animosities between nation states could continue to cause incidents such as Arar's ordeal, as well as calamities such as 9/11."
This paper reviews the article "Japanese Industrial Finance at the Close of the 19th Century: Trade Credit and Financial Intermediation" by Y. Miwa and M. Ramseyer.
Abstract The paper discusses Japan's economic development at the turn of the 19th century with respect to an article published by Miwa and Ramseyer entitled, "Japanese Industrial Finance at the Close of the 19th Century: Trade Credit and Financial Intermediation." The paper is of the opinion that the article is useful and largely successful at supporting the authors' points. The paper points out, however, that the article is prefaced with an over abundance of historical data that is, at best, only partially relevant from a historical perspective.
From the Paper "This article discusses several issues relevant to the Japanese economic experience during the late 19th century as it relates to financial revolutions that anticipate rapid economic growth. The observation is made that Japan did experience such a financial upheaval but that it was not artificially inspired but rather the natural by-product of private investor demands for greater financial infrastructures. Additionally, the authors observe that while securities existed in tandem with traditional bank credit structures, trade credit was largely relied upon in order to raise capital for ongoing industrial expansion."
Tags: economic, growth, bank, credit, capital, expansion, silk, industry
Abstract This paper offers a personal discussion on obtaining a degree and a career in finance. It explores the career options, the pitfalls and the areas in which specific tasks are performed in the industry.
From the Paper "I am currently working on my AA degree. Once I have received my AA degree, I plan to transfer immediately to a four year college to earn a bachelor's degree in finance. I have already done research on finance as a major to make certain that I have taken both the required and the recommended classes as a part of my AA degree program. I learned that the School of Business at the college I want to attend is currently impacted ..."
Tags:finance, accounting, career, finance major, job options, controller, treasurer, college degree, earning potential, career path, CFO, Vice President of Finance
Abstract This paper explains campaign financing and the federal and state levels of campaigning funds. The paper discusses the finance reform laws that prohibit "soft money" and place restrictions on contributions. The paper relates that if the current trend continues, eventually congressional financing will be so regulated that even an ordinary citizen will be able to run for a seat in congress.
From the Paper "It is said "Campaign financing in Congress has become so scandalous that is gives the wealthy in Congress inordinate influence, while ordinary citizens are virtually excluded from a meaningful role." It is true that Congress relies heavily on finances in order to maintain/achieve incumbency, however there are many financial restriction regarding campaign finances. Finance reform laws now prohibit the use of "soft money" (money obtain outside the restrictions of federal law). This soft money restriction came about with the passage of the Shay's- Meehan Campaign Finance Reform Law. However, there are restrictions on individual contributions, as established in the out come of the Buckley v. Valeo case. These restrictions have limited the effect of campaign spending on voters, and created little negative impact (aside from a lack of money) on the Congress as a whole."
Abstract This work is a detailed analysis of the automobile financing schemes for Chrysler. It lists all the various controlled and uncontrolled variables as well as explains the demands for automobile financing. Among those are prices and special deals, money spent on advertising, average income of consumers, consumer taste and the expectation of services at Chrysler Financial.
From the Paper "With the slowing of the economy, Chrysler is forced to give incentives such as special interest rates, factory rebates, and free equipment group upgrades to maintain sales levels that stay competitive. During the time of economic slowdown, there is less money flowing in and out of consumer's hands, which means fewer business transactions taking place. This has an impact of all aspects of the economy, including car sales. In order to entice people to purchase cars during periods such as these, it is necessary to offer lowered rates and added incentives to interest the would-be buyer. This buyer power gives the consumer a financial advantage, thus leading to more demand for vehicles."
Abstract The paper looks at the 1994 "The New World of Microenterprise Finance", which discusses the issue of building healthy financial institutions for the poor throughout the developing world. It examines each article and analyzes the various strategies suggested to finance these microbusinesses. The innovative ideas presented are discussed.
From the Paper " The New World of Microenterprise Finance, edited by Maria Otero and Elisabeth Rhyne, is a collection of critical articles on the subject of microenterprise development, with a particular focus on various strategies to finance these microbusinesses in a range of contexts throughout the developing world. Beginning with a general description and analysis of the microenterprise concept in theory and practice, this review will proceed to examine in critical detail the range of contributions in this collection."
Abstract This paper reviews the requirements for health care finance and accounting. The paper describes the financial environment within which healthcare financial administrators perform their functions, such as accounting, financial planning, budgeting and financial control. The paper also examines the effect of growth of the managed care sector.
Tags: Accounting, health care, managed care, finance
Abstract This paper looks at sources of money for financing a film. It touches on pre-sale agreements, independent film distributors and investors. The paper examines SEC Regulations, non-profit organizations and personal debt. Taxation is also discussed.
From the Paper "Studio filmmaking is an insider's game, and not many independent filmmakers can play, or they choose not to play. Studios are in the business of producing hits. The filmmaker loses a lot of creative control in this method. That's why these alternative methods of raising funds are needed. As difficult and complex as they may seem, they have worked to produce funds for many filmmakers, and allowed them to keep most of the creative control."
