{"id":59966,"date":"2023-11-22T10:22:29","date_gmt":"2023-11-22T01:22:29","guid":{"rendered":"https:\/\/monolith.law\/en\/?p=59966"},"modified":"2024-03-05T20:43:39","modified_gmt":"2024-03-05T11:43:39","slug":"method-of-raising-funds-for-stock-company","status":"publish","type":"post","link":"https:\/\/monolith.law\/en\/general-corporate\/method-of-raising-funds-for-stock-company","title":{"rendered":"What are the Methods of Fundraising for a Corporation? Comprehensive Explanation Including Methods Other than Third-Party Allotment of New Shares"},"content":{"rendered":"\n<p>When considering how corporations, such as startups, raise funds, it is often imagined that they receive investments from investors like venture capitalists (VCs) and issue their own shares. However, there are various methods for startups and similar companies to raise funds, not just through receiving investments and issuing shares. In this article, we will explain the methods of fundraising for corporations.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_53 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<span class=\"ez-toc-title-toggle\"><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/monolith.law\/en\/general-corporate\/method-of-raising-funds-for-stock-company\/#Possible_Methods_of_Fundraising\" title=\"Possible Methods of Fundraising\">Possible Methods of Fundraising<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/monolith.law\/en\/general-corporate\/method-of-raising-funds-for-stock-company\/#About_Asset_Finance\" title=\"About Asset Finance\">About Asset Finance<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/monolith.law\/en\/general-corporate\/method-of-raising-funds-for-stock-company\/#Advantages_of_Asset_Finance\" title=\"Advantages of Asset Finance\">Advantages of Asset Finance<\/a><ul class='ez-toc-list-level-4'><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/monolith.law\/en\/general-corporate\/method-of-raising-funds-for-stock-company\/#It_can_reduce_the_cost_of_fundraising\" title=\"It can reduce the cost of fundraising\">It can reduce the cost of fundraising<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/monolith.law\/en\/general-corporate\/method-of-raising-funds-for-stock-company\/#It_can_potentially_increase_the_value_of_the_company\" title=\"It can potentially increase the value of the company\">It can potentially increase the value of the company<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/monolith.law\/en\/general-corporate\/method-of-raising-funds-for-stock-company\/#Disadvantages_of_Asset_Finance\" title=\"Disadvantages of Asset Finance\">Disadvantages of Asset Finance<\/a><ul class='ez-toc-list-level-4'><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/monolith.law\/en\/general-corporate\/method-of-raising-funds-for-stock-company\/#It_cannot_be_done_if_there_are_no_assets_to_convert_into_cash\" title=\"It cannot be done if there are no assets to convert into cash\">It cannot be done if there are no assets to convert into cash<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/monolith.law\/en\/general-corporate\/method-of-raising-funds-for-stock-company\/#It_is_difficult_to_select_assets_to_convert_into_cash\" title=\"It is difficult to select assets to convert into cash\">It is difficult to select assets to convert into cash<\/a><\/li><\/ul><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/monolith.law\/en\/general-corporate\/method-of-raising-funds-for-stock-company\/#About_Debt_Finance\" title=\"About Debt Finance\">About Debt Finance<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/monolith.law\/en\/general-corporate\/method-of-raising-funds-for-stock-company\/#Advantages_of_Debt_Finance\" title=\"Advantages of Debt Finance\">Advantages of Debt Finance<\/a><ul class='ez-toc-list-level-4'><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/monolith.law\/en\/general-corporate\/method-of-raising-funds-for-stock-company\/#No_impact_on_management_rights_as_there_is_no_change_in_the_shareholding_ratio\" title=\"No impact on management rights as there is no change in the shareholding ratio\">No impact on management rights as there is no change in the shareholding ratio<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/monolith.law\/en\/general-corporate\/method-of-raising-funds-for-stock-company\/#Potential_for_credit_enhancement\" title=\"Potential for credit enhancement\">Potential for credit enhancement<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/monolith.law\/en\/general-corporate\/method-of-raising-funds-for-stock-company\/#Potential_for_tax_savings\" title=\"Potential for tax savings\">Potential for tax savings<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/monolith.law\/en\/general-corporate\/method-of-raising-funds-for-stock-company\/#Easier_to_raise_funds\" title=\"Easier to raise funds\">Easier to raise funds<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/monolith.law\/en\/general-corporate\/method-of-raising-funds-for-stock-company\/#Disadvantages_of_Debt_Finance\" title=\"Disadvantages of Debt Finance\">Disadvantages of Debt Finance<\/a><ul class='ez-toc-list-level-4'><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/monolith.law\/en\/general-corporate\/method-of-raising-funds-for-stock-company\/#Increases_liabilities_on_the_balance_sheet\" title=\"Increases liabilities on the balance sheet\">Increases liabilities on the balance sheet<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-17\" href=\"https:\/\/monolith.law\/en\/general-corporate\/method-of-raising-funds-for-stock-company\/#Need_to_make_repayments\" title=\"Need to make repayments\">Need to make repayments<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-18\" href=\"https:\/\/monolith.law\/en\/general-corporate\/method-of-raising-funds-for-stock-company\/#Need_to_pay_interest\" title=\"Need to pay interest\">Need to pay interest<\/a><\/li><\/ul><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-19\" href=\"https:\/\/monolith.law\/en\/general-corporate\/method-of-raising-funds-for-stock-company\/#About_Equity_Finance_%E3%82%A8%E3%82%AF%E3%82%A4%E3%83%86%E3%82%A3%E3%83%95%E3%82%A1%E3%82%A4%E3%83%8A%E3%83%B3%E3%82%B9\" title=\"About Equity Finance (\u30a8\u30af\u30a4\u30c6\u30a3\u30d5\u30a1\u30a4\u30ca\u30f3\u30b9)\">About Equity Finance (\u30a8\u30af\u30a4\u30c6\u30a3\u30d5\u30a1\u30a4\u30ca\u30f3\u30b9)<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-20\" href=\"https:\/\/monolith.law\/en\/general-corporate\/method-of-raising-funds-for-stock-company\/#Advantages_of_Equity_Finance\" title=\"Advantages of Equity Finance\">Advantages of Equity Finance<\/a><ul class='ez-toc-list-level-4'><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-21\" href=\"https:\/\/monolith.law\/en\/general-corporate\/method-of-raising-funds-for-stock-company\/#No_need_to_pay_interest\" title=\"No need to pay interest\">No need to pay interest<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-22\" href=\"https:\/\/monolith.law\/en\/general-corporate\/method-of-raising-funds-for-stock-company\/#No_need_for_repayment\" title=\"No need for repayment\">No need for repayment<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-23\" href=\"https:\/\/monolith.law\/en\/general-corporate\/method-of-raising-funds-for-stock-company\/#Increased_capital_can_strengthen_financial_structure\" title=\"Increased capital can strengthen financial structure\">Increased capital can strengthen financial structure<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-24\" href=\"https:\/\/monolith.law\/en\/general-corporate\/method-of-raising-funds-for-stock-company\/#Disadvantages_of_Equity_Finance\" title=\"Disadvantages of Equity Finance\">Disadvantages of Equity Finance<\/a><ul class='ez-toc-list-level-4'><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-25\" href=\"https:\/\/monolith.law\/en\/general-corporate\/method-of-raising-funds-for-stock-company\/#Impact_on_management_rights\" title=\"Impact on management rights\">Impact on management rights<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-26\" href=\"https:\/\/monolith.law\/en\/general-corporate\/method-of-raising-funds-for-stock-company\/#Potential_difficulty_in_raising_funds\" title=\"Potential difficulty in raising funds\">Potential difficulty in raising funds<\/a><\/li><\/ul><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-27\" href=\"https:\/\/monolith.law\/en\/general-corporate\/method-of-raising-funds-for-stock-company\/#Summary\" title=\"Summary\">Summary<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Possible_Methods_of_Fundraising\"><\/span>Possible Methods of Fundraising<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The following are the major methods of fundraising that can be considered:<\/p>\n\n\n\n<ul>\n<li> Fundraising by selling assets of a corporation, etc. (Asset Finance)<\/li>\n\n\n\n<li> Fundraising by borrowing money (Debt Finance)<\/li>\n\n\n\n<li> Fundraising by receiving investments from investors such as VCs (Equity Finance)<\/li>\n<\/ul>\n\n\n\n<p><a href=\"https:\/\/monolith.law\/blockchain\/newvirtualcurrency-by-sto\" target=\"_blank\" rel=\"noreferrer noopener\">https:\/\/monolith.law\/blockchain\/newvirtualcurrency-by-sto[ja]<\/a><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"About_Asset_Finance\"><\/span>About Asset Finance<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/monolith.law\/wp-content\/uploads\/2020\/01\/shutterstock_1220527444-1024x683.jpg\" alt=\"\" class=\"wp-image-6838\" \/><figcaption class=\"wp-element-caption\">What are the advantages and disadvantages of asset finance?<\/figcaption><\/figure>\n\n\n\n<p>Asset finance is a method of fundraising where corporations, such as venture companies, sell their assets. Assets that can be considered for sale in asset finance include real estate, securities, inventory, receivables from clients, machinery and equipment, vehicles, copyrights, and patent rights.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Advantages_of_Asset_Finance\"><\/span>Advantages of Asset Finance<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"It_can_reduce_the_cost_of_fundraising\"><\/span>It can reduce the cost of fundraising<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>One of the advantages of asset finance is that it can reduce the cost of fundraising. When selling assets, there is no significant cost involved in the sale, which can ultimately reduce the cost of fundraising.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"It_can_potentially_increase_the_value_of_the_company\"><\/span>It can potentially increase the value of the company<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>Another advantage of asset finance is that it can increase cash and deposits on the balance sheet by reducing the target assets. This can potentially increase the value of the company.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Disadvantages_of_Asset_Finance\"><\/span>Disadvantages of Asset Finance<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"It_cannot_be_done_if_there_are_no_assets_to_convert_into_cash\"><\/span>It cannot be done if there are no assets to convert into cash<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>One of the disadvantages of asset finance is that it cannot be done if there are no assets to convert into cash. Therefore, it can be a difficult method of fundraising for venture companies and others with few assets.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"It_is_difficult_to_select_assets_to_convert_into_cash\"><\/span>It is difficult to select assets to convert into cash<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>Furthermore, there is a risk of selling assets that should not be sold in the pursuit of fundraising. Therefore, when conducting asset finance, it is necessary to carefully consider whether there are assets to sell and whether those assets should indeed be sold.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"About_Debt_Finance\"><\/span>About Debt Finance<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Debt finance refers to the process of raising funds through liabilities, such as borrowing from banks or issuing corporate bonds. Syndicated loans and private placement bond issuance are also examples of debt finance.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Advantages_of_Debt_Finance\"><\/span>Advantages of Debt Finance<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>The following points can be considered as the advantages of debt finance.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"No_impact_on_management_rights_as_there_is_no_change_in_the_shareholding_ratio\"><\/span>No impact on management rights as there is no change in the shareholding ratio<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>In equity finance, which will be explained later, the issuance of shares and other actions can lead to changes in the shareholding ratio, which can affect management rights. On the other hand, in debt finance, funds are raised through liabilities, so there is no change in the shareholding ratio and no impact on management rights. This is an advantage of debt finance as it allows the management team to operate freely without being affected by fundraising.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Potential_for_credit_enhancement\"><\/span>Potential for credit enhancement<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>Since debt finance involves raising funds through liabilities, the corporation naturally has to repay the debt. If the corporation has been making solid repayments on the debt incurred through debt finance, it can lead to credit enhancement, indicating that the corporation is reliable in making repayments. As a result, it may be easier to pass the screening process when receiving large loans from financial institutions, which is a benefit for the corporation.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Potential_for_tax_savings\"><\/span>Potential for tax savings<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>In debt finance, it is common to pay interest to the fund provider. The interest paid during debt finance can be treated as an expense for accounting purposes, which can potentially reduce taxes. Considering only the tax aspect, this can be seen as a benefit for the corporation.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Easier_to_raise_funds\"><\/span>Easier to raise funds<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>From the perspective of the fund provider, they can consider the amount of funds to provide based on the corporation&#8217;s credit, making it possible to raise funds without taking on significant risk. Because the risk to the fund provider is small, it is easier for them to make the decision to provide funds, making it easier for the corporation to find fund providers. Therefore, it is easier to raise funds in debt finance, which is an advantage of this method.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Disadvantages_of_Debt_Finance\"><\/span>Disadvantages of Debt Finance<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Increases_liabilities_on_the_balance_sheet\"><\/span>Increases liabilities on the balance sheet<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>As explained above, while debt finance can potentially provide tax savings, it also increases liabilities on the balance sheet. Corporations generally have some level of debt, but if the proportion of debt becomes too high, it can make the company appear to be performing poorly from a numerical perspective. Therefore, the increase in liabilities on the balance sheet due to debt finance can be seen as a disadvantage.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Need_to_make_repayments\"><\/span>Need to make repayments<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>In equity finance, which will be explained later, the corporation receives funds as an investment, not a loan. Therefore, while there may be dividends and distribution of residual assets in the event of liquidation, there is no need to repay the funds received. In contrast, debt finance is a loan, not an investment, so the funds received must be repaid. This is a disadvantage for the corporation.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Need_to_pay_interest\"><\/span>Need to pay interest<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>It is common to pay interest on the debt incurred through debt finance. Therefore, you need to pay more money than the funds raised by the amount of interest. The need to pay this interest is a disadvantage for the corporation.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"About_Equity_Finance_%E3%82%A8%E3%82%AF%E3%82%A4%E3%83%86%E3%82%A3%E3%83%95%E3%82%A1%E3%82%A4%E3%83%8A%E3%83%B3%E3%82%B9\"><\/span>About Equity Finance (\u30a8\u30af\u30a4\u30c6\u30a3\u30d5\u30a1\u30a4\u30ca\u30f3\u30b9)<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/monolith.law\/wp-content\/uploads\/2020\/01\/shutterstock_313380698-1024x683.jpg\" alt=\"\" class=\"wp-image-6839\" \/><figcaption class=\"wp-element-caption\">The following explains about Equity Finance.<\/figcaption><\/figure>\n\n\n\n<p>Equity finance refers to a corporation issuing new shares and allocating them to investors such as venture capitalists (VCs) to raise funds. The main methods of equity finance include public offerings, allotment of new shares to existing shareholders, allotment of new shares to third parties, and issuance of convertible bond-type new share options.<\/p>\n\n\n\n<p><a href=\"https:\/\/monolith.law\/corporate\/investment-contract-shares-provision\" target=\"_blank\" rel=\"noreferrer noopener\">https:\/\/monolith.law\/corporate\/investment-contract-shares-provision[ja]<\/a><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Advantages_of_Equity_Finance\"><\/span>Advantages of Equity Finance<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"No_need_to_pay_interest\"><\/span>No need to pay interest<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>In the case of equity finance, since it is not a loan, there is no need to pay interest. If interest payments are involved, it could potentially be an expensive way for a corporation to raise funds. Therefore, the absence of interest payments can be considered an advantage of equity finance.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"No_need_for_repayment\"><\/span>No need for repayment<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>With equity finance, since it is not a loan, there is no need to repay the funds raised. The fact that there is no need to repay the funds allows the corporation to retain assets, which can be considered an advantage of equity finance.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Increased_capital_can_strengthen_financial_structure\"><\/span>Increased capital can strengthen financial structure<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>In the case of debt finance, as explained above, liabilities increase on the balance sheet. In the case of equity finance, the funds raised become the corporation&#8217;s capital, which can strengthen the financial structure and make the company appear successful. This can earn trust from business partners and financial institutions. Therefore, strengthening the financial structure can be considered an advantage of equity finance.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Disadvantages_of_Equity_Finance\"><\/span>Disadvantages of Equity Finance<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Impact_on_management_rights\"><\/span>Impact on management rights<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>In the case of equity finance, it is necessary to issue shares to investors such as VCs. This changes the ownership ratio and can affect management rights. This can be considered a disadvantage of equity finance.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Potential_difficulty_in_raising_funds\"><\/span>Potential difficulty in raising funds<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>In the case of raising funds through equity finance, the provider of the funds is not lending money but providing it as an investment. This requires consideration of the risks involved in the investment, which may make the provider hesitant to provide funds easily. As a result, it may become difficult for the recipient to raise funds, which can be considered a disadvantage of equity finance.<\/p>\n\n\n\n<p><a href=\"https:\/\/monolith.law\/corporate\/investment-contract-and-shareholder-agreement\" target=\"_blank\" rel=\"noreferrer noopener\">https:\/\/monolith.law\/corporate\/investment-contract-and-shareholder-agreement[ja]<\/a><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Summary\"><\/span>Summary<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>We have explained the methods of fundraising for a corporation. For a corporation, cash flow is a very important issue. Therefore, it is important to appropriately select and carry out the fundraising methods introduced in this article. Each fundraising method has its own merits and demerits, so it is important to fully understand the merits and demerits of each method. If you are a corporate manager who is anxious about fundraising methods, please consult with a professional such as a lawyer.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>When considering how corporations, such as startups, raise funds, it is often imagined that they receive investments from investors like venture capitalists (VCs) and issue their own shares. However,  [&hellip;]<\/p>\n","protected":false},"author":32,"featured_media":61285,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[18],"tags":[24,28],"acf":[],"_links":{"self":[{"href":"https:\/\/monolith.law\/en\/wp-json\/wp\/v2\/posts\/59966"}],"collection":[{"href":"https:\/\/monolith.law\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/monolith.law\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/monolith.law\/en\/wp-json\/wp\/v2\/users\/32"}],"replies":[{"embeddable":true,"href":"https:\/\/monolith.law\/en\/wp-json\/wp\/v2\/comments?post=59966"}],"version-history":[{"count":2,"href":"https:\/\/monolith.law\/en\/wp-json\/wp\/v2\/posts\/59966\/revisions"}],"predecessor-version":[{"id":61287,"href":"https:\/\/monolith.law\/en\/wp-json\/wp\/v2\/posts\/59966\/revisions\/61287"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/monolith.law\/en\/wp-json\/wp\/v2\/media\/61285"}],"wp:attachment":[{"href":"https:\/\/monolith.law\/en\/wp-json\/wp\/v2\/media?parent=59966"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/monolith.law\/en\/wp-json\/wp\/v2\/categories?post=59966"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/monolith.law\/en\/wp-json\/wp\/v2\/tags?post=59966"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}