Initial Public Offering (IPO),when a company sold its shares to the public to raise capital
e.g. Air Asia SDN BHD
becomes AIR ASIA BHD in 200?
E.G. IPO RICH-RICH COMPANY SDN BHD (SOFTWARE DEVELOPER)
Paid up capital RM 50,000
Revenue year 1 RM 40,000
Contract 5 years ,RM 5million
Need capital, What to do?
BANK LOAN IPO OR
Long term liability
Can keep own company
Get big fast
Equity shared by people
Public know what's your
RICH-RICH COMPANY BHD (SOFTWARE DEVELOPER)
How to start a company?
3 ways to star a company in Malaysia
1. Enterprise -local authority -cheap-risky
2. Sdn Bhd- bit expensive RM2500-secured-profesional
3. BHD-big huge company-big boys.
Types of Funding
Venture Capital- VC/Venture Capital comes in & finance firm in early stage of company formation by asking for share in the company & sits on its board & gives management advice-seek cash after company becomes IPO, e.g. NETSCAPE,AMAZON.COM e.c.t.
Drawbacks of this method- the VC had control over you- usually 51% of the company