Apr 18, 2016
- Complete the sentences below. Use the key words if necessary.
- Raising capital
key words
Alex Rodriguez works for a venture capital company:
‘As you know, new business, called , are all that aren’t allowed to sell stocks or shares to the general public. They have to find other ways of raising capital. Some very small companies are able to operate on money their — the people who start the company — have previously saved, but larger companies need to get capital from somewhere else. As everybody knows, banks are usually . This means they are unwilling to lend to new companies where there’s a danger that they won’t get their money back. But there are firms like ours that specialize in finding : funds for new enterprises.
Some venture capital or risk capital companies use their own funds to lend money to companies, but most of them raise capital from other financial institutions. Some rich people, who banks call , and who we call or , also invest in start-ups. Although new companies present a high level of risk, they also have the potential for rapid growth — and consequently high profits — if the new business is successful. Because of this profit potential, institutions like pension funds and insurance companies are increasingly investing in new companies, particularly hi-tech ones.’
Note: Venture capital is also called or .
Return on capital
key words
‘Venture capitalists like ourselves expect — people with an idea to start a new company — to provide us with a .
Because of the high level of risk involved, investors in start-ups usually expect a higher than average — the amount of money the investment pays — on their capital. If they can’t get a quick return in cash, they can buy the new company’s shares. If the company is successful and later becomes a , which means it is listed on a stock exchange, the venture capitalists will be able to sell their shares then, at a profit. This will be their .
Venture capitalists generally invest in the early stages of a new company. Some companies need further capital to expand before they join a stock exchange. This is often called , and usually consists of — bonds than can later be converted to shares — or that receive a fixed dividend. Investors providing money at this stage have a lower risk of loss than earlier investors like us, but also less chance of making a big profit.’
- Raising capital
- British English or American English?
- preference shares
- British English
- American English
- preferred stock
- American English
- British English
- preference shares
- Complete the sentences with correct words.
- A firm listed on a stock exchange is a . . . .
- public company
- private company
- Individuals who lend money to new companies are sometimes called . . . .
- founders
- angels
- Banks that are risk- . . . usually don’t want to finance new companies.
- loving
- averse
- The amount of money made from an investment is its rate of . . . .
- purchase
- return
- New businesses often gave to get finance from . . . companies.
- risk control
- risk capital
- The people who start companies are . . . .
- founders
- angels
- People who have ideas for setting up new businesses are . . . .
- entrepreneurs
- impresarios
- . . . capital firms specialize in financing new companies.
- Venture
- Gamble
- Many banks don’t want to . . . money to new businesses.
- borrow
- lend
- People who want to borrow money to start a company write a business . . . .
- plan
- proposal
- Money invested in a company just before it joins a stock exchange is sometimes called . . . financing.
- mezzanine
- deficit
- A new company is often called a . . . .
- entrant
- start-up
- A firm listed on a stock exchange is a . . . .
- Match the two parts of the sentences.
- Banks are usually reluctant . . .
- and so are potentially profitable.
- to lend money to new companies.
- to get their money back after a few years.
- before a company joins a stock exchange.
- a higher than average return on their money.
- from specialized venture capital firms.
- Start-ups often get money . . .
- to lend money to new companies.
- a higher than average return on their money.
- from specialized venture capital firms.
- and so are potentially profitable.
- before a company joins a stock exchange.
- to get their money back after a few years.
- New companies can grow rapidly . . .
- to get their money back after a few years.
- a higher than average return on their money.
- to lend money to new companies.
- from specialized venture capital firms.
- before a company joins a stock exchange.
- and so are potentially profitable.
- Risk capitalists usually expect . . .
- a higher than average return on their money.
- from specialized venture capital firms.
- and so are potentially profitable.
- before a company joins a stock exchange.
- to lend money to new companies.
- to get their money back after a few years.
- Venture capitalists need an exit strategy — a way . . .
- a higher than average return on their money.
- and so are potentially profitable.
- from specialized venture capital firms.
- to get their money back after a few years.
- before a company joins a stock exchange.
- to lend money to new companies.
- Mezzanine financing is a second round of financing . . .
- before a company joins a stock exchange.
- from specialized venture capital firms.
- and so are potentially profitable.
- a higher than average return on their money.
- to lend money to new companies.
- to get their money back after a few years.
- Banks are usually reluctant . . .
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