Financing Statement

  

See: Financial Statement. And then note that financing usually means that the company raising dough is doing it in one of two ways. Either they are selling ownership stakes in them, or they are borrowing money in the form of debt, such that they then have an obligatoin to pay back that loan...or else. And that "or else" thing usually means that they lose ownership of the company if they don't.

The financing statement covers the myriad legal and financial risks in making all this magic happen.

Related or Semi-related Video

Finance: What is a Bubble?5 Views

00:00

Finance allah shmoop what is ah bubble All right well

00:06

this is a bubble See what happened there got bigger

00:10

and bigger and bigger And then it popped and here's

00:13

the stock market from about nineteen Ninety two until about

00:16

two thousand It got bigger and bigger and bigger And

00:19

then it popped And yet was a bubble not just

00:22

a big fat bull market It was a crazy ludicrous

00:25

tulip mania Kind of time like start ups with almost

00:29

no revenues trading and billions of dollars Yep And tulip

00:33

mania That was a really thing One tulip sold for

00:36

forty grand go figure wasn't like if you ate it

00:39

you lived forever So yeah it was a bubble So

00:42

what caused the ninety nine bubble Well greed and it

00:45

wasn't good At least for some The internet had come

00:48

along It was a new thing consumers by the millions

00:51

could download in the privacy of their homes Art films

00:56

Yeah That's what we'll call them art films by the

00:58

terabyte money was flowing from silicon valley investors into startups

01:02

at record pace hoping to take advantage of this new

01:05

amazing internet thing and the valuations of companies got higher

01:08

And higher and higher Nasdaq went up some four hundred

01:12

percent in just half a dozen years and the blessed

01:14

cos traded at one hundred times trailing revenue not earnings

01:18

but revenue So if you think about the idea that

01:21

if you invest a dollar and you want to get

01:22

more than that back and that dollar comes from profits

01:26

of companies than one hundred times revenues cos we're probably

01:29

something like five hundred times earnings or more So for

01:32

one hundred dollars oven investment you've got like a dollar

01:35

of revenues in twenty cents of potential earnings Like maybe

01:39

a a decade later maybe yeah that's a bubble and

01:43

it burst At least you don't have that danger with

01:46

actual tulips or bitcoins Yeah they take bitcoins when you

01:50

buy tulips Would be kind of a good marriage there

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