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www.investing-performance.com
Real Purpose of
Corporate Finance
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Disclaimer
� Stock speculation is very risky
� Do not trade with more than you can afford to
lose.
� Seek professional investment advice.
� This is not investment advice.
� No warranties, you are on your own.
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Those of us in corporate
finance and venture capital
can easily forget what we are
there for.
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We can easily see that it does not
matter how the money is raised;
there must be a fair exchange for the
team, for the technology, and for the
money.
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The Real Goal
The real goal of corporate finance
is to see that the company
has more than enough money
to achieve its goals.
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Now that we say it,
we know it could not
be anything else.
What else could it be?
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In seeing this,
we know immediately
what venture capital is not.
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Real venture capital
does not deprive the company of funds
so it can be bought for a song later on,
taking the work of the team
for little or nothing.
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Venture capital is not
loading the entrepreneurial team
down with
straightjacket agreements.
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It is not setting a cheap value on the
company so you can make a huge gain
out of a share of the company that
should belong to the people that daily
contribute their sweat.
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True capital would not keep control of the company
to wrest control from those executives who know
best how to manage.
Capital is not there to know better than
management. Management, not capital, is on the
firing line and best knows how to achieve the
goals of the company.
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True corporate finance is seeing that the company
has more money than it needs.
True venture capital motivates and encourages the
team.
True venture capital values the team and acts
accordingly.
True venture capital is part of the team.
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Copyright ©John Lux 2011