To begin, we want to address “those that find you money.”  We know many of you have already been through the painful exercise of having retained “money finders” who have taken significant fees up front and have produced no results whatsoever for you.  See Section II A in Who is A “Broker” – anyone who fits into these categories, must be licensed by the NASD in order to be involved in your funding process and take a fee for doing so.  They all tell you their system, process or way is legal, compliant, blessed by legal council, etc. and that they can introduce you to the money (and take a fee for doing so) bottom-line…unlicensed “Money Finders” are illegal and they don’t work.  Only two entities can raise capital for you, those who are licensed by the NASD, such as Broker Dealers, Registered Financial Advisors, etc. or the issuer themselves under the Issuer's Exemption (Section II[D]5) or Associated Persons of an Issuer (Rule 3a4-1 Point 240.3a4-1 4(ii)A,B&C also applies), period…end of discussion.

In order to be highly successful in raising capital, it takes a process, time and a certain amount of seed capital.  There are many minefields that need to be navigated that involve securities regulation, legalities, deal structures, & know how to be successful in attracting investors.

When a perspective issuer is contemplating a capital raise, some of the following questions usually arise: 

1)   How much capital should I raise?
      2)   Of that amount, how much should be raised in equity and how much in debt?
      3)   What structure is the most beneficial structure for us & the investors?
      4)   Is my company the type of company in which investors will be attracted?
      5)   Is my company in an emerging growth space that will excite investors?
      6)   What are the exit strategies that motivate investors?
      7)   Is my company attractive enough to go public and trade on a viable U.S. exchange?
      8)   Is my company strong enough to attract a large buyer or institutional investor?
      9)   Who will sell the offering to the investors & how will I find them?
    10)   What about SEC compliance; who should draft the documents for my offering; who will sell it?

Since most companies really need seed capital equity initially, we will discuss this process more thoroughly.

THE SEC

The SEC regulates the capital raising process with an iron fist.  There are serious consequences for an issuer (your company) if the process is not properly followed.  We are told all of the time, that’s not the way my brother-in-law raised his capital, and my attorney said it was ok to do it this way.  “They” whoever they are, are most likely ill informed and if not a securities attorney, don’t know all the regulations.

For instance, the SEC (as stated above) only allows issuers to raise money one of two ways.

      1) They must raise money directly themselves (Issuer's Exemption)…Or
      2) They must contract with a broker dealer to have the broker dealer raise money for them.

THE PROBLEM

Most issuers are uneducated & uninformed on the process of raising money themselves directly, or they do not know how to structure their offering and/or find those badly needed investors, nor are those issuers strong enough or sophisticated enough to attract a broker dealer to raise money for them.  Statistically, a start-up, early-stage or small seasoned company only has a 1.5% chance of attracting a broker dealer to issue their securities.  If they are in the lucky 1.5% the cost is likely $50K to $100K up front, 10% of the capital raised and 10% of their common stock, and they will likely lose control of their company to investors.

OUR SUGGESTED PROCESS

1) We facilitate a capital raise with our clients under the Issuer's Exemption which allows them to take advantage of legally compliant ways to promote the offering to accredited investors. We shepherd our client’s through the entire capital raising process and unlock the mystery of capitalizing a company or venture. 

2) We shepherd the client through this exemption and our Wall Street Solutions for Main Street Companies™ process, to position the company to be able to attract a registered broker dealers or market makers who can then raise additional capital under a separate secondary offering & take the company public. 

We suggest this process because it clearly allows issuers to obtain seed investors who will allow them to obtain the best terms that will minimize their dilution.  This procedure will enable the issuer to obtain friendly capital and with proper capitalization, the issuer will gain a widely held shareholder base.  With this shareholder base, the issuer is now properly positioned to attract a broker dealer or marker makers who will then finish the capitalization in the public markets, which will support the deal because those investors brought in will be trading the issuers stock and add significant liquidity.  We believe in order for an issuer to take their deal forward, they need (Phase I) to be involved in selling their own deal with confidence, and if they can’t or are unwilling to do so, they simply don’t believe in their deal and investors wont take them seriously.

HOW WE CAN HELP YOU

There are 2 phases clients must go through.

First Phase

Our Self-Funding Capitalization System™ Included in our Self-Funding Capitalization System™ are 12 essentials that enable an issuer to raise capital quickly, inexpensively, and in compliance with federal and state securities regulations. It is what every entrepreneur needs to successfully execute a capital raise - Click the link above for detailed components. 

Second Phase

When enough capital is raised into the company, we will now position the issuer to engage a registered broker dealer we can designate to the process.  It may be a broker dealer our firm will own or an affiliated broker through our wholesale relationships.  Whichever broker dealer we will designate to take the issuer deal forward, keep in mind that we will then drive our own investors (that have been captured through our own advertising) to that broker dealer to raise another significant round of financing for our clients deal.  We will also place the offering into our own NetFund™ A Private Accredited Investor Network which streamlines the investment opportunity review process through our exclusive and secure virtual deal space.  Our collaboration network automates & simplifies our select opportunities for accredited investors.  In addition, we can assist in arranging unsecured revolving bank lines who will tandem the equity that is brought into issuers company.

The principals in our firm also have years of experience of taking companies public.  In certain cases, our firm may already have ownership of a publicly traded vehicle of which we will use to merge with your company allowing your company now to trade quickly, all with broker dealer sponsorship.

Regardless of how we are able to take a client company public (with broker dealer sponsorship), they will now have their company positioned to attract the larger institutional investors on their terms, not the investor.  This was made possible because the issuer seeded their company properly in the beginning with a widely held shareholder base.  It is this shareholder base & proper capital structure that enables the issuer to gain leverage in the public markets.

We can also recommend the experts who will keep you in compliance with the SEC and Sarbanes Oxley (SOX).  The costs are not as bad as one may think if you have the right team in place.

BENEFITS OF TRADING AS A PUBLIC COMPANY (Going Public Process)

While there are additional costs & disclosure that will be realized, the benefits clearly outweigh the costs:

      1)   Access to substantial capital via institutional & retail investors who otherwise would never had invested
      2)   Ability to still control a company even after capital is raised on terms you set
      3)   Ability to acquire additional companies with stock & realized earnings
      4)   Ability to attract key management & employees

A CONCEPT TO CONSIDER

The average PE multiple (Price Earnings) of public companies trading today is 17.  Assume one raises enough capital to generate $2 million in earnings - 17 times $2 million earnings equals a company trading at $34 million valuation.

If one can control 70% of a company trading at $34 million ($2 million earnings), their position would be worth $23.8 million not including their ability to obtain salary, bonuses, travel expenses and loans.

IN CLOSING

We can implement phase 1 and phase 2 and successfully take clients through the whole process.

Most of our competitors charge significant up-front fees for a similar process and deliverables (Compare Typical Competitor Pricing Here).

Our Phase I Self-Funding Capitalization System™ process is progressive and we only charge for deliverables and marketing costs as incurred.

Once the issuer is funded to a certain level, we will now be able to take them all the way through the phase 2 level, possibly through our own broker dealer (for select deals).

Most competitors will not be able to implement the Phase 1 & Phase 2 process at the cost & flexibility we offer.  Our experience in both seeding companies and taking those companies public with our unique proprietary financial products will surpass any competitors in the financial services marketplace, if you can even find them.

We also have the ability to arrange unsecured credit lines & bridge financing in order for clients to go through the process with us, if needed, and we will be happy to explain to you what is required.

Note:  For select clients, we can facilitate a relationship with a Wall St. Law firm for Structured Financing.  See details the link herein for domestic and international syndicated and structured finance for projects requiring $10MM to $2B.  We have well-developed and proven methods for organizing and structuring capital financing loans, including structured collateral instruments and insurance bonds from investors, cooperating banks and international financial institutions, for procurement of full capital funds with favorable terms and rates.


Contact:            Jim Nash  -  email: jrnash@InvestmentBankingSolutions.com