Underpricing a new offering versus overpricing it


Theme 1:

Q1. Why do you believe that venture capital funding increased as much as it did during the 90s? What would you attribute to these types of gains?

Q2. If you were a business owner, what would you see as the costs and benefits to using VC funding as opposed to equity or debt issues? Relative to the previous methods that we have studied, why would VC funding be preferred over the other types?

Theme 2:

Q1. What are the consequences of underpricing a new offering vs. overpricing it? Which side of the fence would you desire to err on?

Q2. What criteria would you use to decide to go IPO as opposed to using VC funding, taking on new loans, or issuing debt (bonds)? What criteria would you use with your firm to determine which funding mechanism to use?

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Finance Basics: Underpricing a new offering versus overpricing it
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