The role of securities markets is to bring investors together with businesses looking for f financing....

The role of securities markets is to bring investors together with businesses looking for f financing. Explain the 4 step process of raising money in the securities market.

Expert Solution

The role of securities market is to provide financing which is very important inherent part of business. Obtaining of finance is four step process which involves-

1. Screening- this process investors screen the risk associated with investment and potential limits associated with investment

2. Socialization- team who met with the company will share the knowledge with the prospective investors and then they go on socializing through various meetings to dive deep into the opportunities related to Investments.

3. Diligence- the deal team then moves on to sharing their experience with other partners and partnership teams.

4. Decision making- decision making is done by the venture capitalist after assessment of various opportunities and threats related to the company and assessment of the growth and survival aspect of the company in different economic scenario. Decision is made regarding how much the venture capitalist is willing to invest into the firm and the term for which he wants to invest.

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