How do companies raise capital?

Companies can raise capital in several ways, including:

  1. Issuing stock: A company can sell ownership stakes in the form of shares of stock to investors in exchange for capital.
  2. Issuing bonds: A company can issue bonds, which are debt instruments that investors can purchase and receive interest payments on until the bond reaches maturity.
  3. Bank loans: A company can borrow money from banks or other financial institutions, which will provide the funds in exchange for interest payments and repayment of the principal amount.
  4. Venture capital: A company can raise capital from venture capitalists, who are investors that provide funding to early-stage or high-growth companies in exchange for equity.
  5. Crowdfunding: A company can use crowdfunding platforms to raise capital from a large number of investors, typically through small contributions.
  6. Initial public offering (IPO): A company can go public by issuing stock to the public through an IPO, which allows the company to raise capital from a wide range of investors.

The choice of capital raising method will depend on factors such as the size and stage of the company, the level of risk involved, and the preferences of the management team and existing shareholders.