What is the difference between a funding round and a capital increase?

Antwort

In a funding round, a company raises capital from external investors. This can be done either by issuing a convertible loan or by directly issuing new shares. A joint-stock company (AG) has a share capital defined in its articles of association, divided into a certain number of shares with a nominal value also set in the articles – for example, CHF 100,000 of share capital divided into 1,000,000 registered shares with a nominal value of CHF 0.10 each. When the company issues new shares to investors – whether through the conversion of existing loans or through direct cash contributions – it must create these shares as part of a capital increase. This process involves several formal steps: resolutions by the general meeting and the board of directors, amendments to the articles of association, various board confirmations, public notarisation, and registration with the commercial register. A capital increase does not necessarily result from new investor funds; it can also be carried out using the company’s own resources. In short: every funding round eventually leads to a capital increase – but not every capital increase constitutes a funding round.