www.investing-performance.com Real Purpose of Corporate Finance

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Those of us in corporate finance and venture capital can easily forget what we are there for.

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.

The Real Goal The real goal of corporate finance is to see that the company has more than enough money to achieve its goals.

Now that we say it, we know it could not be anything else. What else could it be?

In seeing this, we know immediately what venture capital is not.

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.

Venture capital is not loading the entrepreneurial team down with straightjacket agreements.

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.

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.

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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