Small Business Finance
Abstract
The paper analyzes the problems of regulation of financial processes in small business. Investment issues have been described. The financial and managerial issues in IPO process were analyzed. The procedure of listing was identified. The prospectus of Tesserent Limited was analyzed. Signaling mechanisms were described. The main comparative components of the firm were classified.
Keywords: Tesserent Limited, IPO, Investments, Underwriter, Small Business.
Assignment 1
Question 1
Tesserent provides Internet Security-as-a-Service to a wide range of Australian and International customers, including different types of customers from different sectors, such as education sector, business sector and government sector (Tesserent Limited, 2015).
Tesserent has also appointed a number of International resellers (Channel Partners) that licence the MSSP Platform to deliver Security-as-a-Service to their own customers.Security-as-a-Service packages security services for a customer's computer infrastructure, including firewall, authentication, anti-virus, anti-malware/spyware, intrusion detection and security event management amongst other services.Tesserent provides Security-as-a-Service on the basis of a subscription fee, most commonly as monthly or annual fees. This is the traditional Internet security model in which conventional hardware is hold upfront and software is sold as a perpetual license with upfront costs (and ongoing support fees).
The subscription-based model delivers recurring revenues for Tesserent.
Question 2
Tesserent was a private limited company. The main purpose of original owners of the business was quite evident - to expand their business. It was possible only with additional investments. Therefore, the IPO allows the company to access to the capital of much larger number of investors and, as the result, raising capital in the company. It will significantly improve the financial reputation of the Tesserent. It also allows the company to strengthen its lobbying capacity, because influential financial institutions will be included as shareholders. Finally, it could enhance the image of the company as a partner and contractor working with national and international companies.
Therefore, Tesserent will focus on:
Expanding the number of Channel Partners in Australia and internationally;
Increasing the number of direct sales to organizations, in Australia and internationally, through increased sales and marketing;
Assessing acquisition opportunities;
Ongoing research and development.
Public company is now a more appropriate structure, because it helps to find new investments. The purpose of the Offer is to enable Tesserent to:
Repay existing debt facilities;
Provide sufficient general working capital to facilitate the growth of Tesserent;
Broaden the share register and provide liquidity in the Shares;
Fund increased sales and marketing activities to increase the number of Channel Partners and customers;
Support Tesserent's ongoing research and development programs to develop more efficient technologies and processes for monitoring and managing cyber-security;
Provide Tesserent with access to equity markets to assist in its growth objectives;
Fund the costs of the Offer.
Question 3
The issue is not underwritten. The issuers were likely to make this choice, because underwriter implements a number of necessary functions:1. Preparations for the placement:Analysis of the issuer, taking into account legal and regulatory capacity factors of issuance of corporate bonds;Formation of the documents that …
