Corporate Finance For Dummies, 2nd Edition

Chapter 3

Pitching Your Story for Money

IN THIS CHAPTER

Finding money for your business

Borrowing funds

Selling equity to raise cash

One of the first, and most challenging, goals for a corporation is to acquire things of value, starting with cash. Using that cash, the company then purchases other things such as equipment, supplies, and so on. This chapter explores the different ways that corporations raise money, who the magical money-fairies are, and how to present your story to them in a way that pleases them.

Raising Capital

Everything that makes up a corporation and everything a corporation owns, including the building, equipment, office supplies, brand value, research, land, trademarks, and everything else, are considered assets. Believe it or not, when you start a corporation, that company’s assets aren’t just included in a Welcome Letter; you have to go out and acquire them. Generally speaking, you start off with cash, which you then use to purchase other assets. For most new companies, this cash consists of a combination of the following:

• The owner’s own money: This money is considered equity because the owner can still claim full possession over it.
• Small loans, such ...