When we are into corporate finance or venture capital, we usually forget that the real purpose of corporate finance is to make sure that the company is receiving more than the needed money for achieving its business goals. Corporate finance basically deals with the financial decisions a business owner makes and its primary goal is to maximize the corporate value, and manage the financial risks of the company at the same time.
It is corporate finance which helps in deciding how the business should increase and manage its capital, how much profit should be returned back to the shareholders as dividends, what investments should be done by the firm and whether it should merge or acquire another firm or not.
Corporate finance or venture capital does not deprive the firm of its funds, taking the team work for nothing or very little. Corporate finance does not burden the company with straight-jacket agreements and does not set cheap value to the company. In this way, people can make huge gains out of its shares which belong to people who work hard with the company.
True capital does not aim at controlling the company as executives of the company are better suited for the job. They know how to manage the company in the best possible manner. It is the management of the company, which knows how to fulfill the goals of the company and therefore, the undertaking should not be given to corporate finance.
The purpose of corporate finance is to see that the firm is receiving more money than required, and it also encourages and motivates the team. Corporate finance values the team and performs accordingly and all in all, this is an integral part of any corporate team.
Corporate finance is much more than just capital, as it is a support which is beyond the boundaries of financial support. It is a part of the corporate team which fights its way through the battles of the business. Now that it is clear that only true corporate finance is eligible to share the rewards of the team.
When a firm is financed adequately, then the business owners and the team will not be deprived from supporting themselves and also their families. They will be well rewarded for the work they do and because they are paid high, they can lead a higher standard of living. Therefore, it would be wise to say that the real purpose of corporate finance is to check that the company is receiving enough money for achieving its goals.