Overshopped

DEFINITION of 'Overshopped'

The perception that a firm's attempt to raise capital by selling equity or debt through a private or public offering is an act of desperation. When a company's management overshops a financing deal, it leaves investment banks, bridge financiers, lenders and private equity groups wondering why they should be the ones to take on the risk of financing a project that others have rejected.

BREAKING DOWN 'Overshopped'

The more rejections a company receives in trying to set up a financing deal, the closer it comes to being overshopped. Financiers closely scrutinize all financing deals, but overshopped deals receive extra scrutiny because more rejections imply a greater likelihood that the terms of the deal are flawed. Thus, financiers avoid overshopped deals. Even if there isn't anything wrong with a company that has been overshopped, repeated rejection tends to hurt the company's reputation. Overshopping can occur at various stages in the financing process and may involve parties that are not even capital financiers; the opinions of accountants, lawyers and insurance companies also count.

RELATED TERMS
  1. Bridge Financing

    In investment banking terms, it is a method of financing used ...
  2. Equity Financing

    The act of raising money for company activities by selling common ...
  3. Private Equity

    Private Equity is equity capital that is not quoted on a public ...
  4. Club Deal

    A private equity buyout or the assumption of a controlling interest ...
  5. Cost Of Capital

    The required return necessary to make a capital budgeting project, ...
  6. Debt Financing

    When a firm raises money for working capital or capital expenditures ...
Related Articles
  1. Markets

    What is Equity Financing?

    Companies that are short on cash may need financing to pay for short-term needs or long-term capital expenditures.
  2. Markets

    Is Equity Financing the Right Choice for Your Business?

    Discover the benefits and drawbacks of equity financing for a small business, and learn when equity financing should be used instead of debt financing.
  3. Investing

    Why Companies Stay Private

    Many private companies prefer to stay private and find alternate sources of capital. Find out what firms have to gain by eschewing the windfall from a flashy IPO.
  4. Investing

    What is Debt Financing?

    When a company needs to pay for something, it can pay with cash, or it may finance the purchase. Financing means that it gets the money from other businesses or sources, in return for obligations. ...
  5. Managing Wealth

    How To Invest In Private Companies

    It can be tough to invest in a company that doesn't trade on an exchange, but there are also several advantages.
  6. Professionals

    Financial Careers: Finance Employers

    By Brian Perry While there are many different types of entities that higher finance employees, this tutorial will primarily focus upon some of the most common types of institutions where finance ...
  7. ETFs & Mutual Funds

    Private Equity A Trendsetter For Stocks

    In this article, we'll show you how private equity sets the trend for stocks everywhere.
  8. Investing

    The Basics Of Financing A Business

    From debt financing to equity financing, there are numerous ways to fund a business startup. But which is the best?
  9. Investing

    A Primer On Private Equity

    Private equity investing is becoming more accessible for individual investors; find out how you can get involved.
  10. Managing Wealth

    How To Invest In Private Companies

    Owning a private firm means sharing more directly in the underlying firm’s profits.
RELATED FAQS
  1. 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 ... Read Answer >>
  2. What are the benefits for a company using equity financing vs. debt financing?

    Learn what some of the principal advantages are for a company that chooses to utilize equity financing in preference to debt ... Read Answer >>
  3. What steps are necessary for a business to secure equity financing?

    Understand the steps necessary for a small business to secure equity financing for working capital, financing expansion or ... Read Answer >>
  4. What are the benefits and shortfalls of the Herfindahl-Hirschman Index?

    Learn about the differences between equity and debt financing and how they impact financials. Find out how businesses determine ... Read Answer >>
  5. What are some advantages of raising capital through private placement?

    Understand how a business can raise capital through private placement and the benefits business owners receive through this ... Read Answer >>
  6. What are the different equity financing options available to companies in the United ...

    Learn what equity financing options are available to small, mid-sized and large companies within the United States and understand ... Read Answer >>
Hot Definitions
  1. Bond Ladder

    A portfolio of fixed-income securities in which each security has a significantly different maturity date. The purpose of ...
  2. Duration

    A measure of the sensitivity of the price (the value of principal) of a fixed-income investment to a change in interest rates. ...
  3. Dove

    An economic policy advisor who promotes monetary policies that involve the maintenance of low interest rates, believing that ...
  4. Cyclical Stock

    An equity security whose price is affected by ups and downs in the overall economy. Cyclical stocks typically relate to companies ...
  5. Front Running

    The unethical practice of a broker trading an equity based on information from the analyst department before his or her clients ...
  6. After-Hours Trading - AHT

    Trading after regular trading hours on the major exchanges. The increasing popularity of electronic communication networks ...
Trading Center