As start ups turn into full running companies and mature into the full size corporation there is never an end of the search for capital. Corporations continue to be concerned with needs for short term as well as long term capital to keep business operating day to day and years to come. Corporations have available capital through bank loans, private venture capitalist and when those resources are exhausted a corporation can turn to the public market and sale stocks, bonds and other securities. (SIFMA, 2006)
Corporations raise short term capital similarly to a start up or smaller company, by seeking loans through commercial banks and venture capitalists (VC) or angel groups. Short term is generally considered to be less than a year and often referenced as working capital which is capital to support the daily business and growth. VC's expect a higher return and quickly through either a sale or IPO while investors are seeking to invest in a company with a higher return long term.
Companies aim to grow, expand and excel and with the aid of long term investors providing long term capital, with a higher return the investor will reinvest more into the company, leading to additional capital.
A much larger stage in their life is a company's Initial Public Offering (IPO). By pursuing their IPO a company is now searching for long term capital. Raising money for the IPO is an aggressive effort on behalf of the CEO and CFO spiking interest from investment bankers. Chris Molten of Peet's coffee stated in the article Making the Most of the IPO Road Show that he raised $18 million so that the company was debt free and pitched 63 presentations in a 3 week time frame prior to going public. (Barker, 2002) Companies can drastically increase their...