Businesses in the Oil & Gas sector face many unique challenges that other businesses don't face. One of these challenges is finding investors who will listen to and be interested in the company's growth potential. Unfortunately, many venture capitalists shy away from new oil & gas companies simply because they haven't shown enough growth in the past. Fortunately, there are some proven methods for helping new companies find and secure growth capital. We've identified five of our top recommendations below. If you're an investor looking for growth capital for your oil & gas company, use these tips to help you secure the funding you need.
Growth funds are made up primarily of penny stocks or newer oil & gas companies with strong balance sheets. Growth stocks tend to pay high dividends or almost no dividends at all, so neither income nor growth funds are typically offered to penny stock holders. Investors in this industry tend to be highly focused on generating high income from capital gains and do not like to take a loss on their investments. Because growth companies are increasing at a rapid rate and therefore typically need to reinvest their earned profits to further enhance the overall revenue generating potential of their organization, it's best for investors to seek growth-oriented capital funds instead of angel-investor funds for their initial growth investment.
Value Investing is a unique type of investing that involves searching for "growth" stocks that are priced below their real book value. This is different than "value" investing, which traditionally seeks to obtain high returns by investing in low-priced stocks. With value investing, the primary goal is to obtain good market price, regardless of what the company does financially. By focusing on growth stocks, value investors can obtain good profit from their investment without unnecessarily worrying about whether the company will eventually go public or experience any profit. If you are interested in pursuing value investing, our 5 top growth stocks for value investors is a great place to start.
Blue Chip Stocks: These are some of the safest growth-oriented investments around. Blue chip stocks are companies that have a history of growth, with solid management teams, a history of dividends, and a solid product that are not affected by changing consumer demand. Blue chip companies generally issue dividends each year, which makes them appealing to investors who are looking for a return on their investment. Blue chip growth stocks are typically held by institutional investors, so you will have to invest in a fund that is registered with the U.S. Securities and Exchange Commission (SEC). Funds that are registered with the SEC are regulated by strict investment requirements.
Value Investing: Value Investing differs from Growth investing in that growth stocks are usually already very well established companies that are valued below their book value. They do not typically issue dividends, so managing your investment could prove to be difficult if you don't have access to growth funds. However, value stocks can be a great way to invest for the long term, as their gains are usually not tied to the stock price, but instead to the overall value of the company. Value stocks will generally appeal to more aggressive investors.
The final category of investment is growth-oriented funds. Growth income funds are a good place to start if you are new to growth investing. These types of funds typically offer growth-oriented investments that are concentrated on the S&P 500 or mutual funds that are members of the Russell index. Most growth funds offer both growth and value investing options.
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