ShmoopTube

00:00

finance 101 a la shmoop. unit one company formation, structure and

00:10

inception. unit intro. this finance course begins with a gossip rag. whether your [finance unit outlined]

00:17

tastes skew more toward TMZ or Weekly World News, you know for a newly started

00:24

company, you know with salacious gossip like who owns what? who did what to whom?

00:29

what's the legal structure of ownership? well if we invest a hundred bucks and

00:34

the company does well what does that money turn into in ten years? a butterfly?

00:38

or hopefully a whole lot more than 100 bucks. but the most important element to

00:42

take away from this juicy unit is that companies are people. not just the

00:48

products they sell. okay so maybe companies don't slip and fall on icy

00:51

sidewalks and maybe they aren't eligible to win the voice, so they're not exactly [company slips on sidewalk]

00:57

like people. but the best companies serve products that are a direct reflection of

01:01

the people who founded and run them. well in this unit we'll focus on a prime

01:06

fictitious ish example the sauce company. as you'll discover the seemingly

01:12

innocent and tiny decisions the founders make in the formation of the sauce

01:17

company will have enormous wealth impact on them a few years later. you'll become

01:21

aware of these nuances in unit one so you know not to lose money in your own

01:26

financial future. we're talking about the methods in which companies get financed [wheel of fortune spins]

01:30

and use their financing partners to play both offense and defense in the

01:35

corporate games they play. private investors public investors equity debt

01:40

lines of credit preferred stock IPOs secondary offerings yeah well these are

01:46

all terms you'll digest and speak fluently soon, but for now well we'll

01:51

stick with the wild gossip. what are we doing here company's free

01:55

much like paintball and fleeting stuff oh yeah but that investment banker

02:00

nowhere suit IPO what a fan is felons public finally Amazon every a mature [summary listed]

02:08

companies not it's not you. ok by the end of this unit you should be

02:15

able to: identify the options you have when you form a company identify a range

02:20

of financing alternatives in building a company. understand what investment banks

02:25

and bankers do all day for a living. understand the special process of

02:29

fundraising called an IPO or initial public offering, and finally recognize

02:35

the need for reward to investors when there's risk. [objectives listed]

Full Transcript