Investment Banking is a business that provides services to companies to help them raise money and manage their finances. So what does this actually mean? Let’s break it down.
Investment Banking, or IB as the industry calls it, is a service that helps companies grow by bringing in needed cash. Traditionally, Investment Bankers would go out to find new investors for a company and then negotiate with them on the return they would get for providing funding. These days Investment Banks take less of an active role in raising capital because there are so many ways for firms to do so on their own – but they still play an important role in helping clients grow their businesses by lending expertise and advice from across many fields like capital markets, mergers and acquisitions, and corporate finance.
Helping Companies Grow
Investment Banks, like Chardan Capital, are also known for helping companies grow by using their expertise in capital markets to manage a company’s cash flow. They help clients to issue bonds, stocks or other forms of securities that can be traded publicly on exchanges like the New York Stock Exchange. By doing so, they help companies to raise more capital by issuing new shares, offering another chance to increase the value of the company for investors and management alike.
In short, IB is about helping companies grow, raising capital, and managing the financial aspects of a company’s existence.
The most well known thing that Investment Banks do is raise capital for clients – which is a lot more than just selling shares in a company to an investor. Investment Banking is a long term, strategic process, and that means the IBs have to find investors with an interest in the company’s industry who can value its future success. In addition to raising capital, Investment Banks work on making sure the company is prepared for and accepts new investment. This includes ensuring that appropriate contracts are put into place regarding both the raising of capital and potential exit strategies – essentially, providing advice on what it takes to be a public company.
Mergers & Acquisitions
Another important task is advising companies on mergers and acquisitions, sometimes from a financial perspective and sometimes from a corporate strategy one. The deal teams will work with the client to determine the best way for them to gain access to new technologies or customers or markets, taking into account each company’s own strengths and weaknesses as well as their corporate culture.
The third major role of an Investment Bank is corporate finance. This involves helping a company raise money in the most efficient way possible for a client. It can also be used for clients looking to improve their financial standing, like raising cash by issuing bonds or providing a bridge loan to cover shortfalls in capital flow until financing can be obtained elsewhere.
Investment Banking is a business that helps companies grow by raising capital as well as advising on mergers and acquisitions.