Understanding Valuation/Price in Venture Capital- Pre-Money vs Post-Money Valuation

A seemingly intuitive and simple concept but is often a subject of confusion and error. Here’s an attempt to simplify the understanding- Explanation Assume Tom and Harry decide to start a company to sell chocolates. They decide to contribute 5 chocolates each. Therefore, the share of ownership in the company between Tom and Harry is […]

Debt vs Equity Financing

Any company that aims to raise money has two options to do so- either sell a part of the ownership and receive money or borrow money and repay the same with interest. The scope of this article is limited to the perspective of venture capital financing and early-stage companies Equity Financing When money is raised […]

Instruments of Investment- Equity vs Debt

Debt and equity financing are two ways that companies raise finance. We have discussed the difference between the two types of funding and the pros and cons thereto. We know that companies raise finance in via these two routes, but how exactly does the money come in through these routes into the company? Money comes […]