The share market, IPO, What are the basic concepts behind all these? What are an angel investor and a venture capitalist? I will tell you about all these things.

The person who has not heard of these things for the first time will understand it and can go online without hearing of these things.First time you will understand and can invest money in the share market online without anyone's help.

How to invest in a Share Market?

Assume you have a pani puri conner and you have such a formula for making Pani Puri which is liked by many people. Now, within an hour of setting up your stand, all of your pani puri are sold.

You went home with your profit. One day you thought if the people like it so much. By starting a business, I should strive to create as many as I can and provide seats for more people so that I can make more money, but the shop will need money to pay for all of these things.

If you have money then you can invest and if you don't have it then you have to take a loan from your friends and family.

What you did is you took a loan and invested it and when your business started running smoothly you paid back the amount. 

But after this too people aren't stopping they are liking your product more than ever. Now that folks seem to be enjoying it so much. Then why not start selling in the whole of the city? Profit will be much good. 

Now you will need very much money because you have to buy shops in the city and employ people and your friends aren't able to arrange this much money.

You have one option you go to a bank for the money. The first thing is that you may or may not get a loan from the bank and the second thing is if you get a loan then you've to pay 12 to 13% of interest and your EMIs will also start from the next month itself and it takes time to build up a business. 

The EMI of the bank will be on your head when you are thinking of implementing the plan in the city and this may also happen that instead of increasing the profit you end up decreasing it. There is a further choice on the market in this situation, and that is an angel investor.

What is an Angel Investor?

Engine investor gives you money to do business. You are not required to repay the money that these angel investors offer you.

However, they will accept stock in your company in exchange for the cash, which denotes a partnership in your company.

Assume you made a deal that you will get 1 crore Rs for a 10% partnership so then whatever you'll earn you have to give 10% of that to an angel investor Angel investors don't need to work with you but they'll invest money and will take 10% from your profit by just sitting at home. 

Now you have made your name in the city and people like your product very much. You then suggested that we broaden its application to new states, which will need more funding. And this much money will be out of the angel investor's hand. The venture capitalist can assist you in this situation.

What is Venture Capitalists?

Venture capitalists are a certain kind of business whose job it is to locate start-ups and enterprises, provide them with financial support, and purchase their stock.

Venture capitalists have the capability of investing a big amount. Now you'll claim that your product is doing well and that you, too, have a terrific concept.

Where can we locate these venture capitalists and angel investors? You have to make a search and hire a good financial advisor or investment banker. They will elevate you and create a really strong file for you. You will receive the funding if your company has the capacity.

These venture capitalists and angel investors don't just provide money. Your revenue details get checked thoroughly and you have to give a proper presentation. Let's say you gave an angel investor money in exchange for 10% of the company. 

Took money from venture capitalists by giving 10% shares and after this too your product is not stopping, people are demanding more and more. Now you are thinking of taking it to an international level and opening up branches all over the city. 

Neither investors nor venture capitalists will have access to the money required for this. In this situation, you will have to sell your shares for cash to become public. Whenever a company goes public to raise money for the first time is called IPO.

what is an IPO?

IPO stands for Initial Public Offering. A business with the words "public limited" in its name has obtained funds from the general public in return for shares, and you can purchase those shares on the open market.

You started the Pani Puri business alone but your product had the capability and all the people are earning from it. You granted them a partnership, and now they are all making money.

Because of this, your product in the company should have greater power than money. The IPO that you bring doesn't mean that you'll go to people and announce to a loudspeaker there's a process for IPO.

First, you've to hire an underwriter or an investment banker He will review your company profile, how much fund is needed, and how many shares you'll give After that, he will check eligibility, etc. Many more items are checked, such as the need that your daily turnover be greater than 10 lakhs.

You must register after examining these items, and SEBI will then approve your submission. Your IPO won't take place without SEBI's authorization. You must then apply to a stock market.

You must determine the price for the shares you are considering offering for public sale. It is entirely up to you whether you are launching an IPO. What percentage would you like to fix the share price at?  But you shouldn't fix it very high because if people aren't taking it, 90 % of them aren't taking your shares then your IPO will not move forward.

It costs 6 to 7 crores to launch IPO marketing and other fees will go all waste. Additionally, it damages the company's reputation, which is why you must maintain your share price so that people would subscribe to your shares.

That's why companies bring IPOs in such times. When the market is up and the purchasing power of the people is high sometimes companies launch 1 lakh shares in IPO the buyers are 5 lacks, The public receives the IPO in this instance via a lottery method.

 After raising money from IPO the company gets to work and starts making its profit after that whether the share market will go up or down or the share of that company will fluctuate. There is no connection to the firm at all. If it wanted to be in the share market again then it had to do it through IPO. When a company brings an IPO for the second time it's called FPO.

Now you'll say that we have seen in movies and news that when a company shares fluctuate, the owners start panicking the company gets affected but not directly it gets affected indirectly. The price of the company's shares reflects the overall reputation of the company when it will take money from the market for any work, the current rate is a type of a base for any company. The second thing is if a company takes a loan from the bank.

Then it posts its shares with the bank as collateral. Assume you've deposited 1000 Rs shares in the bank then according to that the bank will give you 600 to 650 Rs a loan. If the share price drops for whatever reason at this time, the bank will request additional shares from the firm. Because of this, when the share price drops, business owners fear. 

There's one more thing when the company brings IPO again which is called FPO At that time, it will not be able to fix the rates of the shares. The rates in effect at the time will serve as the foundation for FPO. The firm, as you can see, raises money through an IPO and begins working, but the public that purchased IPO shares is waiting for the company to make money so they may benefit from it.

But there is one more way if you fail to buy shares at the time of IPO, the people who've bought the shares at the time of IPO, you can bargain and buy the shares from them. The place where all this bargaining happens is called the stock exchange.