In this new world of Humpty Dumpty Finance, for the average entrepreneur, capitalizing a startup or early stage venture is extremely difficult, if not nearly impossible, and even funding for emerging growth companies is very challenging at best today.

The age-old broker-dealer model is dead (especially when it comes to "private" placements) and a whole new world of finance is about to emerge. in this post-credit crunch world

iCapVentures is leading the way domestically and internationally in creative solutions in this new world finance - through creative deal structuring and proven Investment Banking solutions, we have developed a new system of finance for small & medium enterprises (SME's) in the early stages of their development. Our unique and proprietary investment banking tools, structures and systems give your company the highest possible probability of achieving your capitalization goals.

In today's new finance marketplace their are no quick fixes or overnight solutions to raising capital, it takes time, a systematic process through phases, their are associated costs and expenses that must be covered, and you need a proven team to assist you through the maze of alternatives shepherding you through the process.

Our primary solution and process is described below and within the links provided.  Additionally, please be sure to review the Self-Directed IRA Investing presentation and the iVC Business Development & Funding Process PowerPoint linked on the Homepage.

Overview  The normal process of capitalization (depending on how much is required) involves several phases or steps to achieve the desired outcome within a realistic period of time.  Phase I, the Seed Round can be skipped if the company has the funds (typically $150K) to start with Phase II, otherwise, the costs of Phase II will be raised in Phase I.  This process is simply the best way to successfully capitalize your company or venture and maintain a controlling position in your common stock. 

Seed Round  iCap Ventures ("iCV") a California corporation, in accordance with its purpose as a Business Development Enterprise, incorporates various (CA) Holding Companies under its umbrella for the purpose of acquiring and funding synergistic companies and ventures ("SubCo" typically 3 SubCo's per Holding Company).  Companies become wholly-owned subsidiaries in an iCV Holding company through our Agreement And Plan Of Merger (for Federal income tax purposes, it is intended that the Merger shall qualify as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986), each has Spin-Off Rights. iCV’s strategy for its spin-off business, is to create value for its shareholders from the shares of the business distributed to its shareholders. Value is created for iCV shareholders by diversifying their investment in iCV.

Once vended or merged into an iCV holding company ("HoldCo), the company conducts a Private Placement Offering in the State of California under the CA 25102(n) exemption allowing HoldCo (under the self-issuer exemption) to publicly advertise and raise up to $5MM from California residents which are Qualified Purchasers ($250K Net-Worth and $100K annual income), as-well-as self-directed IRA investors, all through a proprietary and SEC compliant process which we have developed.  Capital is dropped down into each SubCo for its operations, and the HoldCo's SubCo's now have the capital to qualify and go-public on the Frankfurt Stock Exchange in our Phase II process.  In most cases SubCo's capitalization is completed in the Frankfurt round of funding, and they can then Spin-off, and we assist them in becoming an independently traded Frankfurt Exchange Public Company.

The Merger, or Vend-In Spin-Off is further explained below:

Vend-In Spin-Off (VICO) If your company or venture meets our requirements, and you qualify under our due diligence, we will place your company into a synergistic private holding company to raise your seed capital, and then the HoldCo will be merged into a publicly traded company as a wholly-owned subsidiary, with spin-off rights. The Public company (PubCo) will invest money into your company and raise capital into your company through foreign exchange public markets.  Your company then spins-off as an independently trading public company on the Frankfurt Stock Exchange.

Your privately held company (SubCo) vends or merges into a publicly traded company (who we currently have a relationship), as a wholly-owned subsidiary with Spin-Off rights. A Spin-Off is a form of corporate divestiture that results in the subsidiary becoming an independent company again. In a traditional spin-off, shares in the new entity are distributed to the parent corporation's shareholders of record on a Pro Rata basis.

This process allows the PubCo to raise capital into your entity under the Issuers Exemption. After your company is capitalized, it is spun off again as an independently trading Frankfurt Exchange company, with the shareholders of the PubCo retaining a certain percentage of stock in your company.

Our firm facilitates your Company in its successful capitalization by becoming a public company via a merger with spin-off rights. An alternative to conducting a limited public offering “LPO” in order to achieve a public shareholder base is to become a “spin-off” from an existing public company. Becoming a "spin-off" from an existing public company allows your Company to inherit a new shareholder base. All the shareholders of the parent company receive a pro-rata distribution of your Company’s securities out of the 10-20% that is registered with the Securities Exchange. This creates the opportunity to have our shareholders buy more stock in the open market. This will make it easier to raise capital into your company via subsequent private placements.

In addition to arranging a public spin-off for your company, our firm and our strategic partners will assist you with filing all the appropriate requirements to independently trade on the Frankfurt, where applicable, and finish your registration statement making your Company publicly traded. Our firm will also negotiate and has in place the market makers to list and trade your Company’s stock.

The registered spin-off offers many advantages:

● The private company may structure the new public company to meet its particular needs, such as amount and classes of stock, warrants, etc. A merger requires that the private company accept the structure of the existing company or change it by shareholder vote, including outside shareholders
● Typically only a small percentage of the private company's shares are distributed as a spin-off. This serves to preserve the corporate ownership of the existing shareholders for future financial transactions
● The spin-off prepares the stock market for a secondary public offering later on, which typically occurs at a cost more desirable than an IPO
● Principals and shareholders of the private company can include their securities in the registration statement for the stock dividend distribution. This can allow them to then sell their securities in the public market, subject to the volume limitations of the Rules of the public exchange.
● If the private company is a U.S. company, it may not want to become public on an American exchange and have to deal with the high cost and regulations of SOX, as it would in a merger into a U.S. shell. A stock dividend distribution (registered spin-off) with a foreign exchange company is a solution to that problem. 
● A domestic company may also prefer a stock dividend distribution to a merger with a public company if it wants "custom features" which it does not find in a shell, e.g., two classes of stock owned by shareholders of the private company and/or warrants.

Requirements prior to entering into a registered spin-off are the following:

● A private company will require approval of the majority of its shareholders for a merger into a public corporation.
● Once a company is taken public through a registered spin-off the financial markets hold the following future prospects in the capital markets for the newly public corporation:

      ► The market value of a public company is often substantially higher than a private company with the same structure
          in the same industry
      ► Capital is easier to raise for public companies because the stock has market value and can be traded
      ► The public corporation may be used for special purposes.
      ► The public trading price of the public company's securities serves as a benchmark for the offer price of a subsequent
          public or private securities offering
      ► Acquisitions can be made with stock since publicly traded stock is viewed as currency for mergers and acquisitions
      ► Form S-8 type of stock can be issued and can be used to remit compensation to employees & consultants.

For additional information, see What are Spin-Offs and Spin-Off Articles.

Frankfurt Public Round  The HoldCo will be acquired by our strategic alliance partner Maverix Ventures or one of their publicly traded companies (PubCo) on the Frankfurt Stock Exchange and the completion of the capitalization of each SubCo with be through the public sale of securities on the Frankfurt.  Thereafter, SubCo's may Spin-Off and our affiliate will assist them in compliance with all of the requirements to be an independently traded public company on the Frankfurt.  PubCo shareholders will retain 10% to 20% of the Common Stock Shares in SubCo.

Why The Frankfurt Stock Exchange?  Going Public on the Frankfurt Stock Exchange is one of the best alternatives for a small company to become public in today’s marketplace.  Please review the benefits and our process at Maverix Frankfurt Listing White Paper, and our Going Public Frankfurt Strategies & Timeline.

Follow-on Capitalization  If a SubCo needs further capitalization beyond what is raised on the Frankfurt, we can dually list you on other exchanges such as London's Plus or LSE.  Multiple listings will enable SubCo (now an independent PubCo) to continue to grow as its capital needs dictate.

After SubCo stabilizes, it becomes attractive for a number of other capitalization solutions, such as PIPE funds & other programs like our Compensating Balance Structured Collateral Finance program, further described below.

Interest Only Structured Collateral Loan  Our Compensating Balance & Structured Collateral Finance  program is an established system of structured financing using traditional banking mechanisms as its fundamental components. The result is a stable structure that produces a 100% monetary instrument collateral for international and domestic project financing.  The primary function of the structure is to procure an institutional compensating balance depositor and a major international bank to make a loan in a like amount as the deposit, charging interest only, because a portion of the loan funds acquire insured collateral instruments which guarantee the re-payment of the principal in a fixed term certain. The result of the structure is that the borrower receives a net amount of capital that it needs to implement its project at a cost much lower than a traditional loan.

Review the iVC Business Development & Funding Process PowerPoint linked on the Homepage to fully understand how we typically use our finance solutions to structure a two to three phase capitalization process for seasoned companies and select new ventures.