Study Questions
1. What is meant by the following, and why are these important: cover your equity; angels; venture capital; valuation; due diligence; IPO; mezzanine; SBIC; private placement; Regulation D; Rules 504,505, and 506; and ESOP?
2. What does one look for in an investor, and why?
3. How can the founders prepare for the due diligence and evaluation process?
4. Describe the venture capital investing process and its implications for fund-raising.
5. Most venture capitalists say: There is too much money chasing too few deals. Why is this so? When does this happen? Why and when will it reoccur?
6. What other sources of capital are available and how are these accessed?
7. Explain the capital markets food chain and its implications for entrepreneurs and investors.