What is evergreen funding?

By Chizoba Morah AAA
A:

Evergreen funding is a term used to describe the incremental addition of money into a business. Before a business is started or a new product is introduced to market, the business owner or the investment bank that represents the business owner will approach venture capitalists and other investors for financing.

Usually, these investors or venture capitalists will provide the company with capital in one lump sum payment. At this point, the company will invest the capital in short-term securities in order to yield interest.

It is customary to make arrangements to receive venture capital funds upfront. With evergreen funding, however, investors supply the capital in incremental payments throughout the development phase of the company or product. Thus, the company receives money from its investors as the need for funds arises, and alike the evergreen tree, is never without the "green" the company needs to survive.

For more on this topic, read The Frosty, Festive World of Investing.

This question was answered by Chizoba Morah.

RELATED FAQS

  1. How many times has Warren Buffett been married?

    Warren Buffett has been married twice in his life, but the circumstances surrounding the marriages were anything but conventional.
  2. What is needed to be a successful entrepreneur?

    Discover how successful entrepreneurs succeed through passion, motivation and accepting failure. Learn about the qualities ...
  3. What are some ways of financing an acquisition?

    Learn about how business acquisitions are financed, from using private equity funds to receiving huge acquisition loans from ...
  4. Why is versatility in a company's core competencies fundamental in its success?

    Learn how versatility in a company’s core competencies allows the company to use them to its advantage, including providing ...
RELATED TERMS
  1. Donation-based Crowd Funding

    Donation-based crowdfunding is a way to source money for a project ...
  2. Lloyds Organizations

    An insurance syndicate that bases its organizational structure ...
  3. Provisional Patent Application

    A short-term means of protecting an invention that requires less ...
  4. Franchise disclosure document

    A Franchise Disclosure Document (FDD) is a legal document presented ...
  5. Michael Bloomberg

    Michael Bloomberg is one of the wealthiest persons in the world ...
  6. Mark Zuckerberg

    Self-taught computer programmer and self-made multi-billionaire ...

You May Also Like

Related Articles
  1. Entrepreneurship

    Go To College Or Become An Entrepreneur?

  2. Entrepreneurship

    How to Make Money with YouTube

  3. Investing

    What kinds of private equity investments ...

  4. Entrepreneurship

    Square vs. Stripe

  5. Entrepreneurship

    How To Start A Successful App Business

Trading Center