“According to research by Yellowstone Capital Investments LLC, after companies review their financing options, it's notable that startup companies - many of which are located in New York and the San Francisco area - are opting for debt financing as an effective route to inject capital into the business without ceding ownership shares.”
When a company is in need of capital, it can attain financing via equity, debt, or a combination of both. Debt financing is essentially borrowing money from a third party, also known as a lender, with the promise to return the amount of the loan, referred to as the principal, along with interest at a later date agreed upon ahead of time. Startup companies and smaller firms use debt financing as a way to leverage their operations and maintain ownership of their business, while also lowering taxes.
Debt financing works as follows. A firm or company sells fixed income products like bonds, bills or notes to third party investors to acquire the necessary capital the company is in need of to increase its business. When a company issues a bond, the investors that purchase the bond are either retail or institutional lenders, either of which can provide the company with debt financing. In return for lending the money, the lenders become creditors and are assured that the principal of the loan as well as the interest on the debt, will be repaid. In the eventuality that the company goes bankrupt before the debt is repaid then the lenders have a higher claim on any liquidated assets than do the company shareholders.
An advantage of debt financing is the accompanied tax deductions, as in most cases, the debt related interest payments are considered as business expenses. One con of debt financing includes the potential that an increase in the interest rates which will have an impact on the loan repayment and on the credit rating of the borrower. A company’s amount of debt can be estimated using a D/E ratio, the debt-to-equity ratio. It is a metric used to calculate the extent to which a company's capital is being financed via debt financing. It is usually considered preferable to have a low rather than a higher D/E ratio, but there are times when a higher ratio may be advantageous while certain industries will also tolerate a higher amount of debt than will others.
“Yellowstone Capital Investments LLC’s review of emerging trends in investment planning indicate that an increased demand for digital technology that bolsters privacy and security while also preventing fraud, will drive interesting changes in the industry in 2018.”
Investment planning can be defined on both an individual and on a corporate level. The first way relates to consulting services where in a financial consultant, advisor or money manager is hired to help a client manage their financial portfolio. The client’s financial portfolio contains all types of investments, accounts, insurance policies, alternative investments and more. As is typical when it comes to money, it is the financial consultant’s objective to grow the client’s portfolio by various means of investment planning.
In corporate finance, the term investment planning or management differs slightly. Here it relates to a complex process of overseeing, maintaining and maximizing all of a company’s diverse assets. By doing so and growing the overall assets, the investment planning team is thereby helping to increase the company’s overall value. Making an educated decision when it comes to investment planning is crucial on both the individual and corporate levels as the proficiency, or lack thereof, of investment planning can make the difference between success, mediocrity and failure.
“Yellowstone Capital Investments LLC’s maintains that when people review their investment options, they may instinctively prefer to opt for more “safe” choices, yet it is key to remember that each and every decision carries with it certain intrinsic implications, potential risk and limitations.”
Risk management, when it comes to finance, is the process of identifying, assessing and then either accepting or mitigating the inherent uncertainty that goes hand-in-hand with each and every investment. In more practical terms, the process of risk management is as follows. An investor, consultant or financial advisor evaluates an investment decision and tries to quantify the potential for losses (risk) that may accompany that decision. Then the investor or consultant decides whether or not to take action, and in the case of choosing to take action, the investor/consultant strategizes which move to make. The ultimate decision largely depends on both the short and long term financial goals of the investing party, the acceptable threshold of risk tolerance, as well as many other on the ground circumstances that are taken into consideration.
While people often prefer to opt for safety and avoid taking risks, risk management is essentially unavoidable as each and every decision carries with it certain intrinsic implications. There is an element of uncertainty that comes with every decision and even the decisions considered to be “safe” can turn out differently, although they typically carry less
So, too, in the financial world. Each investment carries with it an element of risk. For example, the purchase of both low risk bonds and high risk bonds carry risk, albeit different amounts. The potential for reward of each choice is also taken into the balance. Investors and investment consultants make use of different strategies such as investment diversification and portfolios in order to alleviate or optimally navigate investment risk.
U.S. venture firms invested $84 billion in more than 8,000 companies last year, according to research firm PitchBook with the figures comparable to the dot-com era. While this sounds all positive, a potential downside is that the number of exits fell for the third consecutive year, reaching the lowest point since 2011. The reason for this seems to be that because so many companies are staying private longer, they’re finding it harder to get their money out.
Natalie Massenet, founder of luxury e-commerce Net-a-Porter website, stepped down as the executive chairwoman in 2015. Now in 2018 she is returning to the business scene as a venture capitalist, as she is part founded of the Imaginary Ventures firm. The firm has thus far already raised an impressive $75 million in capital for its first fund. The firm is pursuing investing in startups from different industries.
Perhaps it’s surprising to some but 150 biotech startups call Jerusalem their home. Striving to build on this booming scene, Jerusalem officials are working to set up a $130-million venture capital fund focused this area. The budget would be allocated by the Funds from both Jerusalem's economic development agency, known as the Jerusalem Development Authority and from private investors.The new venture fund would commit to spending at least half of its capital on homegrown startups developing medical devices, pharmaceutical technology or others product in the field of life sciences. The city is also benefiting from a wider emphasis on biotech among investors: over the past six years, about 30 percent of total venture capital funding in Israel has gone to life sciences startups, according to the report.
The fresh new name of Microsoft’s venture capital arm has meaning behind the single letter and the numbers. “M” stands for the company name while the 12 stands for the 12 letters in the word entrepreneur. M12, has been around since 2016 has invested more than 50 investments in areas that are important to Microsoft’s. Cybersecurity, AI, industrial drones and 3D printing are all areas of focus.
Data provided by Invest Europe shows that total fundraising in 2017 into Europe-focused ventures reached a more than a decade record high of $110 billion. The number of private equity funds raising new capital also saw a 15% growth. Private equity investment in European companies increased 29% in 2017 to €71.7 billion. Buyout investment was also at a peak level since 2007 and increased 37%. This combined with other data seems to indicate that private capital markets are deepening as European economies continue to develop.
With its $15.3-billion sale to Intel last year, autonomous driving company Mobileye will probably retain its title of Jerusalem’s most successful start up company for a while now. But that doesn’t mean there aren’t other big players on the scene of the capital city. Some of the more established players include Nasdaq- and Tel Aviv-listed Intec Pharma Ltd., Gamida-Cell Ltd.and Medinol Ltd. It would be wise to keep your eye on these three companies as well as the hundreds of other startups that are popping up every day in Jerusalem.