A Journey from the Formation of the Company to the IPO: The meaning of COMPANY FORMATION is to make a company, and today we are going to talk about how a company is formed, how a company collects capital to do business, and COMPANY FORMATION for the stock market investor. And how important it is to understand business.
STOCK MARKET BUSINESS
Stock market investment is considered a risky investment because the money invested in stock market investment is used to run the business of the company whose shares we buy,
And there is no guarantee that there will always be profit in any business, and this is the reason why, investing money in the stock market, there is no guarantee that we will make a profit.
In such a situation, before stock market investment, all of us should have good knowledge about how a business starts, how a company is formed, how a business works, and how a company arranges capital to grow its business. must know somehow,
Only then we can understand the reason and process behind the business done by a company and the work done by it, and can take advantage of better and more profitable investments in the stock market,
If someone does not know how a business starts and how it works, then he will probably never understand what the stock market is and how it works.
Common man, Business, and Stock Market
Most of us, either do jobs or do small businesses, in such a situation, most of us do not know much about how such big businesses are, and this becomes the biggest reason. Because of this most of the people around us are away from the stock market, and they do not invest in the stock market,
But one question always comes to the mind of all of us, how did a single person like – Tata, Birla, or Ambani people make such a big company, and how do they become the owner of such a big company?
When we understand very well, how a company is formed, and how it does its business, where it gets capital from, then we will find the stock market completely a business, and also the ups and downs of the stock market. begin to understand.
Also Check: What Is Mutual Fund?
How a company is formed – COMPANY FORMATION
That’s why our topic today is – Start of a Business and Company Formation, and in this post, we will know how an idea becomes a business, then as the business progresses, then How to fulfill your capital requirement, how a small business becomes so big that it receives money from people in the form of capital by selling shares in the stock market to do its business.
This topic can be a bit long, and it will be known in two parts…
Believe me, before stock market investment, it is very important to understand the requirement of capital and its fulfillment in different stages of the business from the beginning of the business.
Friends, today we are going to talk in answer to this question, how do people make such a big company, and today we will know how a company is formed with a small business idea, and where the company got the money for its business. What measures does the company take to increase it’s capital and business,
TYPICAL BUSINESS START-UP AND FUNDING
Let’s first talk about the different stages of moving forward from the very beginning of a typical business, our focus will be on how a business tries to get FUND as capital from the beginning to IPO…
- Business Idea and Complete Business Plan
- Raising the capital required for the business – The person who created the business idea, his own capital – Promoter Capital Fund
- Borrowing money from friends for business capital – Angel Investor
- Taking money from Venture Capitalist, also known as VC in short, to further expand the business.
- Funding from First Series of VC – Series A Funding
- Funding from VC’s second series – Series B funding
- To use the reserve fund taken out of the profit earned by the company for capital,
- Funding was given by the bank for capital expenditure – DEBT FUNDING
- Private Equity Fund – Large private investors, shareholders, who make private investments in an emerging company,
- Finally taking money from the PUBLIC as capital by IPO from the stock market,
In the next post, we will continue our talk about the beginning of BUSINESS and COMPANY FORMATION, in the next part, we will thoroughly understand the different ways of getting capital from the beginning of a business till its listing in the stock market.