- Deriving from the word Finance, the definition of the word Financing is therefore the Act of finding solutions to carry out.
- By extension, the most common solution being money, it represents the Act of Provision of a Capital.
- Funding is mostly gathered with Investors by a Financial or a Trader in securities on behalf of a company called Issuer because it issues securities, sold to Investors through Brokers and Traders.
The Financing Principle
The principle of financing is to exchange a capital against information and an expectation of gain more or less certain.
Here are the reasons:
- To invest, the investor needs to know that the opportunity exists.
- It must be able to evaluate the gain / risk ratio.
- Familiarity creates trust, the illusion of information and the illusion of control.
Forms of Financing
There are two main forms of financing:
- The Credit, also called Debt.
- The Contribution (of Own Funds) also called Capital or Equity.
Criteria for Admission to Financing
In order for a company to be admitted as an Issuer by a Financial Community, it must meet the following criteria:
- Operate in a buoyant market.
- Be transparent.
- Do not be a One Man Show.
- To have a Competent Management, in Team.
- Have a unique character.
- Have a Competitive Advantage.
- Being international or at least present in the country of quotation, usually the United States.
Divulgación
Quien quiera un Capital debe proporcionar a cualquier Prospecto sin que éste lo requiera. Cualquier información material de tal naturaleza que le permita formarse una opinión exacta y completa o que pueda afectar su juicio como Inversionista.
PROVIDING FALSE INFORMATION, OMITTING REAL INFORMATION, FAVORABLE OR NOT DELAYS.
The Prospectus
The information is provided in the form of a Prospectus describing the Issue, more or less complete, which may have several designations:
El Prospectus or Disclosure Document son términos genéricos.
El Summary, Abstract or Executive Summary es un resumen que debe limitarse a determinar el interés del Prospecto de Inversión.
El PPM, Private Placement Memorandum or Private Offering Memorandum are terms designating a Prospectus describing a Private Issue.
El Preliminary Prospectus or Red Herring is a term designating a Provisional Prospectus (without Price or Issue Date) describing a Public Issue.
El Prospecto de Oferta Pública is a term designating a Prospectus describing a Public Offering.
