#2 Startup Funding

Startup Funding

In previous article , we understood about how we can raise funds for startup

But this time we will not go to investors to raise funds

This time we will go to public. We call this as IPO-Initial Public Offer

where our investors are “public”

Here the story is same,evaluation is worth 100Cr,you want investment worth 10Cr at 10% stake

For this you go to public. To reach public,there is an organization SEBI

You tell SEBI that you want to make your company public listed

Now the funds that you want worth 10Cr is now divided into 10Lk shares and value of each share is worth Rs 100

If someone buys 1 share he has to pay Rs100 and he will get that much value of the company

Let’s see this from consumer’s end. He bought one share of us worth 100Rs

You must have heard about demand-supply. If supply is constant and demand increases then prices also increase

Its converse is also true. If demand falls, and supply remains constant,then prices fall

It is also possible that if demand and supply rises,then prices remain constant

So now, the share you bought of the company was worth 100Rs

But due to demand let’s assume its value increases,as their business model is good and everyone thinks that their company will grow

There is an increment of 20% in their demand

where the share was of 100Rs is now worth 120Rs

So what some people will do,they will buy worth 100 and sell it worth 120 there and then

If it happens on the same day,we call this as Intra Day Trading

And if he retains it for some time,then it is Long Term

Now that you have purchased share worth 100Rs,you are now a member of that company too

because you have a part of the company

Company’s profit will be shared with you or not?

If company’s Board of Directors want to share their shares with shareholders,then you can get something

So that money which you get is known as Dividend

And company call this as Dividend Payout

If company wants to share its 10% share with shareholders then they will get values as per the percent of shares they have

Let’s assume you are getting dividend worth Rs10 at the end of year

So the share you purchased worth 100 is now worth Rs.130 at the year end

So here you are getting 30% return. Your return of investement here is 30%

You get 30% profit if you sell your share after aan year,we call this as Trading

You now must have understood that atrading is of 2 types:Intra Day and Long Term

In news the market you see is stock market. Basically there are 2 types of stock market : NSE and BSE

Here many kinds of instruments are traded like debt,commodity,shares,foreign exchange which we call as forex

And to stop or buy these there are other ways which we call options,futures and there are many other similar things

In upcoming videos we will understand about how can we do trading in share market and get successful

Let me tell you most important thing about share market-it is not a gambling

Gambling is where you have a probability that one person will win and the other will lose

It is where there is a specific probability of your winning or losing

Trading is a secret,which if you understand properly,then chances are there that you will get successful only

You will find many places where you will get high returns,50-60%

Chances are there that you can get into that much loss too

So you have to play safe game worth 15-20%

I will recommend you to trade on equity i.e shares

as you are part of the company and if you understand properly,then chances are there that you will not get into loss

The big investors in our country are build dup on shares, like Warren Buffet

So first of all choose a category in which sector you want to trade

BSE has 5000 and NSE has 1600 companies so you can do trading with these much companies

If you select a sector about which you have knowledge then chances are there that you will get successful early

Like I told you about demand-ssupply gap,you have to understand that which is possible only if you have knowledge about that sector

And to gain knowledge about that sector you have to gain experience of that sector

So you select sector acc to your background like if you have done B.TECH in computer science,then select a computer company

If you are from finance background,select finance comany or from any othet sector then you select acc to that

Every individual has its specific forte,and one more thing, make your shares diversified

Don’t invest it in a single place

Like you have a blind trust in company and you invest all over there,but risk factor is that if that company makes loss,then you will also make loss

If you will invest money in diversified manner,then your chances of getting successful will increase very high

I will also tell you about how to analyse about whether a company’s share will rise or fall

or is it safe or not

Invest in your sector and apply these techniques which will help you in making a bigger person

Bank gives us 6% on savings account or if we make FD then 10%,but in share market generally you get a minimum of 15%

Now you will say it has risk too. There is no risk,it is 0% if you have knowledge then

Wanna learn about stock market , I had written a detailed book , on stock trading