Capital is the lifeblood of a business. It is true that to make money you have to spend some - and to spend it you have to have it. Without capital you can't buy the equipment you need, purchase or lease the equipment you need or hire the people necessary to help you. Capital underwrites innovation and the take up of new technology and the development of new ideas.
Equity capital is the money, time and other assets that the owners contribute to the business. Generally the originators of the business put in what they can, they borrow against personal assets and work very hard to build the business up over a long period of time by reinvesting profits as they go. The idea of bringing others into the business to provide a stronger asset backing (more money) is foreign to most. A large percentage of companies are set up under the advice of accountants and Solicitors to save tax and protect assets but the issue of share ownership and share management is rarely discussed. The use of share issues and share management (equity capital) is a significant business strategy for growth that is understood and used by the big listed companies.
Equity capital is not repayable; it demands no provision of security (other than issued shares) and bears no interest. In essence, a business can print its own currency by issuing and marketing shares. In one sense you can even think of it as being another product line that you create and sell. Early stage funding is "relationship" based and generally comes from family, friends, relatives or clients and/or suppliers wishing to firm up their relationship with the issuing company. RailWest Management is especially adept at the process of fund raising, utilizing modern communication initiatives (surveys, email, telephone lists) to attract potential investors to public meetings, organized and conducted by RWM for the purpose of raising the capital required to start the short line acquisition process as well as derive maximum funding from the various levels of government.
Last Updated on Monday, 15 November 2010 09:20