The Capital Market as a Source of Financing

What the capital market means for a company

The capital market is where companies raise medium- and long-term money from investors — individuals, companies, or institutional investors — by issuing securities. For you as an entrepreneur, it means access to a wider circle of funders than a single bank or a single investor.

The two main instruments are shares and corporate bonds. Both can be offered either to the general public or to a limited group of investors. The process is regulated, and in the Republic of Moldova the market is supervised by the National Commission for Financial Markets (CNPF); always check the specific requirements in the legislation in force and with a licensed advisor.

Shares or bonds? Public offering or private placement?

In a public offering, securities are offered to a large number of investors on the basis of an offering document (prospectus) approved under the applicable rules. In a private placement, the offer is addressed to a limited circle of investors, usually with lighter documentation requirements but also with access to fewer funders.

• Advantages: larger amounts than from a single funder, longer terms, visibility and credibility, diversified sources of financing.
• Requirements: the right legal form (issuing shares requires a joint-stock company), clear and usually audited financial statements, periodic reporting, and costs for advisors, auditors, and intermediaries.
• Responsibilities: accurate and timely disclosure to investors for the entire life of the instrument.

What a bond issue looks like in numbers

When the time is right

1. You have a convincing financial track recordSeveral years of documented revenue and, ideally, profits help investors assess the risk.
2. You have a clear plan for using the moneyExpansion, equipment, refinancing — investors want to know exactly where the money goes and what results it will deliver.
3. The amount you need justifies the costsAn issue involves audit, advisory, and intermediary costs; for small amounts, a loan may be more efficient.
4. You are ready for transparencyPeriodic reporting and open communication with investors become part of the company's routine.