Typically a new company starts trading on savings and bank borrowings taken out by the founders. After incorporation, shares are created with the founders owning most of the share capital. However, in most cases a company will need further cash injections to expand and this is where venture capitalists come in place. Venture capitalists buy shares in the company for which in return they get to own a piece of the company and have a say in the board. This primary injection of outside capital is referred to as a first stage investment. The first offering of shares is not usually the last and more shares may be created via rights issues and share placings to allow the company to raise further rounds of finance (which will come from other venture capital fund investors). If the company turns out to be successful it may ultimately decide to list in the market as an IPO.