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Research and Sources

The ability to make good business decisions requires accurate, current information. At SVG we understand that making sound investments requires the most comprehensive investment information available which is why we strive to provide our client with the tools necessary to make informed investment decisions.

We have provided some foundational terminology and web links that will allow our clients to expand their knowledge.

Investment Terms

Capital Venture Broker - a type of broker that assists individual and institutional investors to locate Initial Public Offerings (IPOs) and expanding businesses, find suitable investment opportunities.

Venture Capitalist - a venture capitalist is a private investor or investment firm, who makes venture investments or private equity, in a business venture, providing capital for start-up or expansion. Venture capitalists typically look for a higher rate of return and are conversely willing accept a higher rate of financial risk. Private equity investors who provide venture capital to promising business ventures typically invest where at least 25 percent annual returns within one to five years are feasible, and often demand 50 percent or more ownership to exercise control over the investee firm to offset the high risk. Often they also provide management and industry expertise and business connections with other firms and venture capitalist. Their objective usually is to bring the business to its initial public offering (IPO) stages so that they can sell their shareholdings to the public at high profit, and get out.

Venture Capital (also known as VC or Venture) - is a fund raising technique that uses private equity capital, for either early stage, high-potential, startup companies or the expansion of existing businesses. Venture capital typically comes from institutional investors and/or high net worth individuals. Both institutional investors and high net worth investors may invest in the same business. If this occurs then the total investment is aggregated.

Capital Market - is a market for securities (debt or equity), where, where business enterprises companies and governments can raise long-term funds. It is defined as a market in which money is provided for periods longer than a year[1], as the raising of short-term funds takes place on other markets (e.g., the money market). The capital market includes the stock market (equity securities) and the bond market (debt). Financial regulators, such as the UK's Financial Services Authority (FSA) or the U.S. Securities and Exchange Commission (SEC), oversee the capital markets in their designated jurisdictions to ensure that investors are protected against fraud, among other duties.

Private Equity - Equity capital that is not quoted on a public exchange. Private equity consists of investors and funds that make investments directly into private companies or conduct buyouts of public companies that result in a delisting of public equity. Capital for private equity is raised from retail and institutional investors, and can be used to fund new technologies, expand working capital within an owned company, make acquisitions, or to strengthen a balance sheet.

Private Money Investment - is a great source of startup capital for new businesses. Start-up businesses seeking private investors have received a great deal of financial aid and expert assistance. Private investors invest in all venture ideas- entertainment, contracting, construction, real estate, brokerage, catering, pet supplies, craft stores, appliance repair, retail, greeting cards, photography, consulting, beauty salon/products, interior design, online businesses and others.

Institutional Investors - are organizations which pool large sums of money and invest those sums in companies. They include banks, insurance companies, retirement or pension funds, hedge funds and mutual funds. Their role in the economy is to act as highly specialized investors on behalf of others. For instance, an ordinary person will have a pension from his employer. The employer gives that person's pension contributions to a fund. The fund will buy shares in a company, or some other financial product. Funds are useful because they will hold a broad portfolio of investments in many companies. This spreads risk, so if one company fails, it will be only a small part of the whole fund's investment. Institutional investors will have a lot of influence in the management of corporations because they will be entitled to exercise the voting rights in a company. They can engage in active role in corporate governance.

Angels Investor - An angel investor or angel (also known as a business angel or informal investor) is an affluent individual who provides capital for a business start-up, usually in exchange for convertible debt or ownership equity. A small but increasing number of angel investors organize themselves into angel groups or angel networks to share research and pool their investment capital.

Mezzanine Financing - A hybrid of debt and equity financing that is is typically used to finance the expansion of existing companies. Mezzanine financing is basically debt capital that gives the lender the rights to convert to an ownership or equity interest in the company if the loan is not paid back in time and in full. It is generally subordinated to debt provided by senior lenders such as banks and venture capital companies. Since mezzanine financing is usually provided to the borrower very quickly with little due diligence on the part of the lender and little or no collateral on the part of the borrower, this type of financing is aggressively priced with the lender seeking a return in the 20-30% range.

Online Resources

Bloomberg - http://www.bloomberg.com/
Barrons - http://online.barrons.com/
Market Watch - http://www.marketwatch.com/
Global Investor - http://www.globalinvestor.com/
Reuters - http://www.reuters.com/
Smart Money - http://www.smartmoney.com/
US Securities & Exchange Commission - http://www.sec.gov/edgar.shtml
Wall Street Journal - http://online.wsj.com/public/page/news-financial-markets-stock.html
New York Stock Exchange - http://www.nyse.com/
National Association of Securities and Dealers Automated Quotation (NASDAQ) - http://www.nasdaq.com/
London Stock Exchange - http://www.londonstockexchange.com/
Tokyo Stock Exchange - http://www.tse.or.jp/english
Toronto Stock Exchange - http://www.tmx.com/
Investopedia - http://www.investopedia.com/