These are the most common types of deals made in investment banking:
1. IPO (Initial Public Offering): This is when a company sells its shares to the public for the first time. When a company “goes public” through an IPO, it raises money from investors who buy its shares on a stock exchange like the New York Stock Exchange or NASDAQ. The investment bank helps the company prepare for the IPO by providing financial advice, underwriting the shares, and assisting with the regulatory process.
2. M&A (Merger and Acquisition): This is when one company buys another company, or when two companies merge to become one. An investment bank can help a company looking to buy another company by providing financial advice and helping to structure the deal. The investment bank may also provide financing for the deal by raising money from investors or by lending money to the acquiring company.
3. Debt Financing: This is when a company borrows money from investors instead of selling shares. The investment bank helps the company issue bonds or other types of debt securities to investors. The investment bank may also help the company negotiate the terms of the debt, such as the interest rate and maturity date.
4. Equity Financing: This is when a company sells shares to investors to raise money. Unlike debt financing, which requires the company to pay back the money it borrows, equity financing does not have to be repaid. The investment bank helps the company prepare for the equity offering by providing financial advice, underwriting the shares, and assisting with the regulatory process.
5. Restructuring: This is when a company is in financial distress and needs to make significant changes to its operations or finances in order to survive. The investment bank helps the company by providing financial advice, negotiating with creditors or investors, and assisting with the restructuring process.