article thumbnail

Capital Raise Blog Series - Vol 9 - Types of Capital (Senior Debt & Mezzanine Capital)

RKJ Partners

Capital is generally grouped into three main classifications: Senior Debt, Mezzanine Capital and Equity Capital. Most entrepreneurs are very familiar with senior debt offered by traditional banks. Senior debt is first in seniority and is often secured by collateral in the form of a lien.

Debt 40
article thumbnail

Building a Solid Foundation: Essential Steps for Paper LBO Practice

OfficeHours

Balancing debt and equity components are crucial to minimizing the cost of capital while maintaining financial flexibility. In general, this focus on cash flow will enable timely debt servicing and can allow the acquired company to bounce back stronger than ever before being taken public or spun off to another private equity firm.

Insiders

Sign Up for our Newsletter

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

article thumbnail

Top 3 Growth Financing Options for Software Companies

Software Equity Group

There are several resources for growth capital: debt from a lender or financial institution, minority equity financing, or majority equity financing through a control transaction. Growth debt, also called venture debt, most often comes as a principal loan accompanied by an interest payment.

Finance 52
article thumbnail

What is the Accounting Equation? Explaining Assets = Liabilities + Equity

Peak Frameworks

Liabilities represent the obligations a company has to outside parties, such as debts, loans, and accounts payable. Examples include accounts payable, short-term debt, and accrued expenses. Examples include long-term debt, deferred tax liabilities, and pension obligations. For example, Apple Inc. reported total assets of $338.16

article thumbnail

Is Private Equity Right for You?

OfficeHours

Once improved, the exit can then take place, usually in the form of another sale or an Initial Public Offering (IPO), both of which are usually under the advice of an investment bank. During the hold period, the private equity firm can improve operations, management structure, and financial strategies to optimize the business.

article thumbnail

How do Banks Make Money? Explanation, Examples

Peak Frameworks

When Facebook went public in 2012, it needed an investment bank to handle the Initial Public Offering (IPO). Provisioning for Bad Debts: Banks use sophisticated models to predict the amount of loan defaults they might experience in a given period.

Bank 52
article thumbnail

How Merchant Banks Help Businesses Grow and Succeed

Razorpay

Underwriting Services Merchant banks also provide underwriting services for initial public offerings (IPOs), private placements, follow-on public offerings (FPOs) and rights issues. This service helps companies to raise the required funds from the public.

Bank 52