1. Module IV

2. Project Financing
It
is the long term
financing
of
infrastructure
&
industrial projects
based upon the
projected cash flows
and
not
on
promoters balance
sheet.

3. ASSIGNMENT

4. Sources of personal finance
1.
2.
3.
Personal funds
involves both financial resources & sweet equity
Sweet equity: represents the value of the time &
effort that a founder puts into a firm.
Friends & family: loan or investment , involves
gifts, forgone or delayed payment, or reduced
or free rent
Bootstrapping: finding ways to avoid the need for
external financing, through thriftiness, costcutting. Obtaining grants, or any other means

5. Examples of Bootstrapping Method
1.
2.
3.
4.
5.
6.
7.
Buy used instead of new equipment
Coordinate purchases with other
businesses
Lease equipment instead of buying
Obtain payments in advance from
customers
Minimize personal expenses
Avoid unnecessary expenses, such as
lavish office space or furniture
Buy items cheaply (from online auctions
like eBay than at full price stores)

6. Debt funding or
equity
financing???

7. Equity Financing
Means exchanging partial .
ownership in a firm, usually
in the form of stock, for
funding
Liquidity event: which is an
occurrence that converts
some or all of a company’s
stock into cash.
Events: go public, find a
buyer, merge with another

8. Sources of Equity Financing
Angel
investors
Private placements
Venture capitalist
Initial public
offerings

9. Angel Investor
Are individuals
who invest their
personal capital
directly in start
ups

10. Private placements
The sale of securities to
a relatively small number
of select investors as a
way of raising capital.
Investors involved in
private placements are
usually large banks,
mutual funds, insurance
companies and pension
funds.

11. Venture Capital
.
Is money that is invested by venture
capital firms in start-ups and small
businesses with exceptional potential.
Several emerging centers of innovation:
Biotech
Wireless
IT
Semiconductor
Pharmaceutical.

12. Initial Public Offerings
referred
to simply as an "offering" or "flotation",
is when a company (called the issuer) issues
common stock or shares to the public for the
first time.
Often issued by smaller, younger companies
seeking capital to expand, but can also be done
by large privately owned companies looking to
become publicly traded.

13. Other Sources of Finance
Seed
Funding
Venture Capital
Mezzanine Financing
Angel Investor
Factoring
Bank Loan
Bridge Financing
Crowd Funding

14. Seed Funding
Investment made very early in the
life if a business to fund the
development of a prototype and
feasibility analysis.

15. Mezzanine Financing
Investment made to a firm to
provide for further expansion or to
bridge its financing needs before a
buyout.

16. Factoring
means provide finance by discounting
the bills or invoices of its customers

17. Bridge Financing
To maintain liquidity while waiting
for an anticipated and reasonably
expected inflow of cash.

18. Crowd Funding
Describes
the
collective
cooperation, attention and trust by
people who network and pool their
money and other resources
together, usually via the internet.
internet

19. Types of Projects
Green Field
Project (33
percent)
2. Brown Field
Project (25
percent)
1.