HOW COMPANIES RAISE CAPITAL

	SOURCE	AMOUNT OF TIME CAPITAL IS AVAILABLE	COST TO COMPANY	AMOUNT OF CAPITAL AVAILABLE
Venture capital	Sophisticated investors	Varies, but tends to be short term	Gives up a share of equity/control	Pool of money from investors willing to take risks on a new business
Reinvestment	Company’s own resources	Limited to profit cycle	Lost profits	Profits that could be earned
Bank loans	Commercial bank	Tends to be short term	Pays interest	Bank’s evaluation of company’s ability to pay
Bonds	Public	Tends to be long term	Pays interest	Company’s ability to offer competitive interest rate
Stocks	Public	Permanent	No direct cost unless dividend is declared	Supply and demand