What is a securities offering?
A securities offering can sometimes be known as a funding or investment round and it is where businesses attempt to raise money to fund operations or expansion of their enterprise.
Where have you heard about a securities offering?
You most likely have heard about this in reference to an initial public offering (IPO), or when your financial advisor mentions a forthcoming bonds issue.
What you need to know about a securities offering.
Companies will offer bonds or stock in order to raise fund to drive growth in the business. Sometimes companies offer this investment opportunity due to liquidity issues, but investors should be aware of the risk of these types of investments.
Components of a securities offering include a prospectus, a securities filing with authorities, financial projections, statements and details of how funds will be used, and underwriters or brokers to help facilitate the transaction.
There are various types of funding rounds include seed rounds, angel rounds, venture rounds and mezzanine rounds. The main difference between them being the nature of investors, the size of investment and the stage of the company.
Rounds may also be public offerings for public companies, which are widely advertised, or private offerings made by private companies, which have strict limtis on the type and number of potential investors.