For my maiden post I would like to work through some thoughts on the financial markets from 30,000 feet.
Financial markets consist of capital markets and money markets. The latter refers to short term debt a company takes on for generally less than one year (deposits, collateral loans, etc). Commercial and central banks are involved in these transactions. While capital markets consist of any long term debt or financing a company takes on to prepare for an M&A process, expanding into a new market, etc.
While money markets are limited to commercial and central banks, many types of capital markets exist that I would like to expand on.
There are five main channels that private companies naturally progress through to receive capital and grow.
1. Angel Investors: Angels are individuals who provide seed money to companies at their earliest stages. This is the first funding that takes place and also has the most risk.
2. Venture Capital: Shortly after receiving some seed money a company could typically raise money from an interested VC firm.
To Be Continued Tomorrow... I will be posting everyday so stay tuned.
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