1. Ch. 15: Raising Capital Only pages 419-33 Venture Capital
Selling Securities to the Public
Underwriting
IPO Underpricing
Issuing Debt
Shelf Registration

2. Venture Capital First-stage, second-stage, mezzanine Participation
Expense
Evaluation techniques
relate to capital budgeting
Exit

3. Selling Securities to the Public
Board of Directors approves
Securities and Exchange Commission registration
Waiting period
Preliminary prospectus (red herring)
Effective date, price, final prospectus
Initial public offering (IPO)
Seasoned equity offering (SEO, secondary or follow-on offering)

4. Underwriting Firm commitment underwriting Best efforts underwriting
Underwriter’s buy price, offer price, spread
Underwriter’s noncash compensation
Aftermarket
Green Shoe provision (overallotment)
Lockup agreements

5. IPO Underpricing
Costs
1990s, 1999
Participation
Explanations

6. Issuing Debt Shelf Registration
Process for issuing public debt is similar to stock
But more than 50% of debt is issued privately
SEC permits registration of securities in advance and sale during a two-year period
Shelf Registration