Most of the existing and existing companies in the world are based on investment capital. The enterprise needs money both at its foundation and for further growth and development. How does investment work?
Instructions
Step 1
An investor is a person or organization that provides their funds to another organization, hoping to receive a portion of the profit in the future. If the investment occurs when the company is founded (at the startup stage), the investor receives a share in the company.
Step 2
The most developed investment business is in the United States. California's Silicon Valley is rich in investors and young firms alike. Distinguish between start-up (venture), equity, finishing investments. Usually, when venture investments are made abroad, the share of the investor is small and amounts to 20 percent of the entire company. In subsequent rounds of investment, the share of the owner of the company is more and more diluted, and the investor's share increases.
Step 3
In Russia, the investment market for venture capital (funds to help young entrepreneurs) is just beginning to emerge, situations are known when venture capitalists receive 80-90% of a young company. Although this promises great benefits, many startup founders, having received such investments, lose motivation - after all, their business is almost completely under the control of the investor.
Step 4
Joint-stock companies receive investments by placing their securities on the stock exchange. On the free market, such securities can be bought by any individual or company, hoping to receive monetary benefits and participate in the management of the company. Any shareholder has the right to know about the policy of the company, its income, expenses and profits.
Step 5
The holder of the largest number of shares is called the controlling shareholder. He can make key financial decisions, including downsizing the company and declaring it bankrupt.
Step 6
Often joint stock companies pay dividends to holders of securities - this is a portion of the company's profits, divided for each investor. The frequency of dividend payments and their amount are determined by the board of directors of the company.
Step 7
We can conclude that investments are important for companies, as they provide the funds needed to buy equipment and pay salaries to employees. But you have to pay for everything: in this case, entrepreneurs who have taken on investment responsibility lose their freedom in resolving strategic issues and deprive themselves of part of their profits.
