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Posts Tagged ‘private placement memos’

Over The Counter Bulletin Board – Taking Your Company Public: How To Get The Power You Need Fast!

10 Apr

Growing your company sales by adding promotional and sales agents and increasing your marketing exposure is an obvious way to beef up revenues but few companies consider the virtually instantaneous power of strategic alliances. Creating strategic partnerships with ‘would be’ rivals and companies that cater to your business genre can help you rapidly take possession of your market.

If you are a printer, team up with brochure designers, ink and paper distributors, advertising firms and print solution resellers. If you are a solar panel technology company then team up with corporations who have government grants for research and development and other alternative energy groups such as wind energy turbine technology firms, Department of Energy contractors etc. By teaming up with other companies and combining resources. You can stimulate growth in every area of your business. Look at each individual product and service you offer.

Now think of other companies who you can team up with to share resources. Make sure you create win/win opportunities for everyone involved as this is the only way to truly take advantage of this type of partnership. Don’t look at this concept as leaching off of other company’s resources, to the contrary, carefully researched and structured alliances will transform the here and now as well as future business of all parties involved. Strategic alliances will also enhance your appeal as an ‘invest-able’ business to venture capital firms and angel investors.

Think about it. You have a carefully constructed and managed corporate infrastructure. You’ve taken the steps to make sure that each of your ‘C’ level executives has been promoted as the ‘who’s who’ in the industry to speed up investor due diligence and increase customer confidence. You’ve carefully selected a board of directors that will effectively and actively guide you through the turbulent industry environment with their proven track record of success. And you’ve even initiated and solidified powerful partnerships that enhance your business concept and strengthen the longevity of your company.

You are now ready for expansion, investors, venture capital firms, taking your company public, attracting a professional CEO or CFO and practically anything your company is setting out to do.

For Strategic Alliances or Investor Finder Services, call Princeton Corporate Solutions at 267-233-0183Take Your Company Public the easy way!

 
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Over The Counter Bulletin Board – Take Your Business Public: Here Is The Process

03 Apr

Becoming a publicly traded company is an exciting and rewarding experience. The following sets forth the method, steps, fees and estimated timetable to go public on the OTC Bulletin Board (OTCBB) ‘from scratch’, or through a self-filing and discusses the 1934 Exchange Act responsibilities after a company’s registration statement has gone effective (after the company has become publicly traded):

Prior to filing the registration statement, a company that wishes to go public must first obtain an audit of the Company’s financial statements for the past two fiscal years. For most companies, the financial audit can be completed in about a month and costs typically range between $5,000 and $25,000, depending on the complexity of the company financials.

A public company will also need shareholders. To that end, if additional shareholders are needed, the company going public will need to complete a self-underwritten Regulation D, Rule 506 offering in which the company sells shares of its stock to investors for real consideration. This is not a difficult task, so long as you have a properly prepared private placement memorandum (PPM) and you follow the relatively simple rules of Rule 506. The price per share and number of shares offered can be determined by the Company, but most registered broker-dealers that will eventually submit a Form 211 for an OTC Bulletin Board quotation prefer to have a minimum of 400,000 shares distributed among the investors.

In addition to the minimum number of shareholders requirement, a company must have free-trading shares, called the ‘float’, in order to go public. Upon completion of the private offering and the financial audit for the prior two fiscal years, an S-1 Registration Statement must be filed with the Securities and Exchange Commission (”SEC”) to register the shares sold in the private placement, thus creating the free trading shares. The completion of the S-1 process with the SEC will make the Company a 1934 Exchange Act reporting company, which is required in order to obtain a quotation on the OTC Bulletin Board. The SEC will review the S-1 and provide comments within 30 days from the filing date. Comments from the SEC typically relate to the terms of the offering, the Company’s business and its financial statements. It usually takes between 2 to 3 months for the SEC to approve a registration statement on Form S-1 and for the S-1 to become effective. However, the actual amount of time will depend on the level of review and number of comments given by the SEC and the corresponding response time by the Company in filing its amendments.

Shortly after filing the S-1 registration statement with the SEC, a market maker must be ‘engaged’ to file a Form 211 application with FINRA for the purposes of obtaining a quotation of its common shares on the OTC Bulletin Board. It is important to note that market makers cannot receive compensation for making a market in a stock, thus typically you must have connections to accomplish this. The timetable for approval of the Form 211 process is approximately 3 weeks to 5 weeks. However, the Form 211 will not be approved until the S-1 is approved by the SEC since the approval of the S-1 provides the “free trading” shares necessary to obtain the OTC Bulletin Board quotation.

The completion of the entire process to become a public company typically takes approximately 3 to 4 months from completion of the private offering and financial audit, however, the actual time could vary based on the factors discussed herein. If done right, with planning, hard work, the proper foresight, and a good firm guiding you through the process, going public is a truly exciting and rewarding experience.

Want To Go Public With Your Company, call Princeton Corporate Solutions at 267-233-0183Take Your Company Public the easy way!

 
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Taking Your Company Public

30 Mar

If you own or run a company that is trying to raise capital in the current economic conditions you’ve undoubtedly been challenged by the limited funds available. Investors are more difficult to find and the individuals that are actually willing to part with their cash are even tougher to find. You’ve talked to friends, family members, your cpa and your attorney but trying to get them to invest is like drawing blood from a stone, it’s just not happening.

There is an easier way. Most broker dealers and market makers have an emergency number in their Rolodex that reads “Investor Finder”, these specialist consultants are brought in when there is nowhere else to turn for cash. A true Investor Finder has 1,000’s of investor contacts that they can call on to get funding for their clients and are constantly using online viral strategies to attract more investors to their database.

An investor finder usually is not a licensed securities broker/agent or attorney; instead they are traditionally consultants that are active in the investment banking facilitation aspect of the industry. Being that they are not licensed they do not accept equity payments or percentages; instead they work on a flat fee basis.

A good consultant in this genre can bring in 30 to 70 real investors per day and it’s up to the client to sell the opportunity from there. A typical lead from an investor finder will be an investor or investment firm that is responding to the consultant’s opportunity introduction email or snail mail mailing, they have read about the opportunity and they respond one of two ways, either they are calling into a phone room to be screened and qualified or they are contacting the client directly.

Many times the investor doesn’t know that they are part of the “finder’s” database but do recall signing up to receive investment opportunity updates, so either way the investor is solid and active. If you are trying to raise capital and need real results quickly and can’t afford to waste time begging for cash, you need to seek out a qualified Investor Finder consultant and make your fund-raising efforts fast and easy.

Investor Finder Services, call Princeton Corporate Solutions at 267-233-0183Take Your Company Public the easy way!

 
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Taking Your Company Public: The Anatomy of The Perfect Business Plan

22 Mar

With legions of halfwit, template loving business plan wannabe writers polluting the web it’s no mystery that companies are having a tough time getting funding. It use to be that when a company was ready to get down to business for serious expansion they would call a consultant that would help them bring all the pieces together in a strategic fashion and then this consultant would take their extended industry knowledge in combination with the unique concepts of the client’s business and he would author a business plan.

This business plan would include everything that the venture capital firms, angel investors, private investors and institutional lenders would need in order to make a quick, no nonsense decision about whether to fund the company and how much equity they would get in return.

Today with the cancerous cloud of predatory consultants seeking out startup business prey to suck dry that businesses are too broke and exhausted to move forward with a solid consultant after they have been through the costly obstacle course and fun house of mirrors set up by wannabe consultants who reel in their prey with a few big words and industry terms and at the end of the day, they are going to put your business plan together with some cracked template software that spits out overly generalized business plans that receive laughs and snickers before being tossed in the trash by investors and venture capital firms.

If you want a real business plan, call a consultant that is completely submerged in the venture capital industry and has experience with plugging businesses into the capital machine. An consultant will first give you a consultation so he can assist in any corporate structuring or turnaround issues that need attention before the business plan is together. After the company’s structure is complete with executives, solid management, strategic partners, advisory board and board of directors, there is still one more thing to do before the business plan. You must decide what mechanism you’re going to use to raise capital. Are you seeking debt or equity investment or both, how much equity you will give away for the amount of cash you’re seeking. How many shares does your corporation currently have and so on. You’ll most likely need to put together a private placement or consider taking your company public on the otcbb. After all this is done then it’s time to write the business plan.

Don’t shoot yourself in the foot, don’t write the business plan yourself, when you’ve found a consultant, here are the topics that should be covered in the business plan (this knowledge will help you audit their work before you even hire them). The table of contents should read, at a minimum, like this: executive summary with objectives, keys to success and strategic advantages; Market, Market: Growth and Development Analysis with Industry Analysis and Location Based Services; Current company position with Company overview and vision, key successes to date, technical achievements and commercial position, include info about your technology platform. Talk about your management team, product and services offering, competition, market entry/ Five Forces Analysis, barriers to market entry, comparable business model, target market needs, target market characteristics, market demand drivers, PEST analysis, SWOT analysis, marketing implementation and strategy overview and tactical components, process development map, financial model and projections.

There you have it, the process to follow before the business plan is written and the concepts to be covered in the business plan so that you get the attention you need from investors and the money you deserve for your business.

For Corporate Consulting or Investor Finder Services, call Princeton Corporate Solutions at 267-233-0183Take Your Company Public the easy way!

 
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Private Placement Memorandums and OTCBB: You Can Easily Go Public With Your Company

21 Mar

Are you a business owner raising capital with a Regulation D Rule exemption (504, 505 or 506) also referred to as a Private Placement Memorandum, PPM or Offering Memorandum? If you are using this mechanism to raise capital then you’ll, no doubt, have to have a solid comprehension of the most distinct and important part of the Private Placement Memorandum referred to as the ‘Offering Circular’.

When your consultant or attorney is asking you for details on everything from business location to management, from dividends to risk details, you need to make sure that this information is complete and accurate. You’ll need to audit the documents after they are completed. A solid Offering Circular has kept countless companies from being sued by investors that didn’t get the investment return they were anticipating.

While the business plan is meant to grab the initial attention of the investor or funding source, the Offering Memorandum is meant to spell out the down and dirty details of the venture so that you are protected from lawsuits down the road, while simultaneously exposing the various ins and outs of your venture to give a ‘reality check’ to the investor before they hand over the cash.

The offering circular needs to be powerful yet very compact without the redundancies of using space to say the same things over and over again to pull the investors attention from the negative to the potential profit margins or management’s impressive pedigree. With all this said, yes it’s true the offering circular is one of the parts of a PPM spells out the technical aspects of the enterprise with a focus on inherent risk of investing but this can be done in a balanced way to also demonstrate the positive aspects of your venture by giving solid descriptions of your management team and, in place, distribution centers and contracts in place ready for capitalization.

When authoring the offering circular demonstrate the risks with a well balanced demonstration of the system in place to overcome these risks and dominate your market niche.

Go Public With Your Company, call Princeton Corporate Solutions at 267-233-0183Take Your Company Public the easy way!

 
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Take Your Company Public OTCBB: A Must Read Before You Do Anything!

20 Mar

Take Your Company Public: A Must Read Before You Do Anything! As a consultant in the business of structuring companies, setting up strategic alliances for clients, writing business plans and PPM’s and taking companies public on the OTCBB, I must admit I’ve seen my share of scams and swindling of uninformed clients. One sad issue that permeates the industry is clients who believe that their only option is to give up substantial equity while paying hefty fees to consultants who take your company public.

Here is the reality. When you are investigating the industry to find a consulting firm to work with to facilitate your ‘go public’ process, the first thing you need to do is make sure you are hiring a ‘turn-key’ solutions consulting group; meaning they need to offer everything soup to nuts in house because the second your consultant outsources anything, accountability is lost.

Next, on the issue of paying fees and also giving up equity, it should be either or, not both. If a company tells you that they want you to pay them in both upfront fees and in equity, you should laugh and walk away. In actuality the best deals for the client are those that are simply fee based, not equity based.

It’s better to pay 100k in a few easy installments than to pay millions in stock that will only be liquidated after the IPO which will completely obliterate your stock price and almost certainly ruin your company’s chances of success. It baffles me to see the scenarios that uninformed company owners accept. Currently there is a company that is promoting all over Google Adwords that they will take your company public for $25k and after a month of talking to the company, when you finally agree to use them they break the bad news that they are not going to charge you $25k or anything even close to that, they are, in fact, going to charge you $125k upfront, plus $10k to $20k for your initial SEC audit and on top of all of that they are going to take 30% of your company! It’s shocking but this group of consultants, because of their extensive advertising, has no problem bringing in clients and turning the tables on them at the last minute and sadly, because the client is uninformed, they accept the contract and pay the fees.

If you are going to give up any amount of equity in exchange for the process of going public, it should be with a licensed broker dealer and there should be zero out of pocket expenses from you. Your broker dealer should pay for the SEC audit, S-1 filing, SEC approval, FINRA approval, Symbol achievement and ongoing investor relations to keep your stock price solid. Unless your broker dealer is doing all of this, you need to find a new, full service broker.

Keep in mind, each consulting firm you talk to will give you a million reasons as to why their fee structure and process is the best but here are some comparable facts so that you can make the right decision on how to proceed. First of all, if you get an emotional consultant that acts like he is excited about your project and ‘can’t wait to get started’ this is bogus and you should walk away. The best consultants keep clients at arm’s length and never get emotional because it clouds the process and makes them ineffective. Besides, if they are acting so excited about your company it’s probably because they are trying to convince you of their legitimacy that won’t stand on its own merit.

Next you want to make sure that you are getting a quote on your specific company type which includes at a minimum: corporate structuring, strategic alliance facilitation, board of directors evaluation, business plan authoring built for IPO, investor finder service, SEC audit (the should be able to give you a general idea of the cost of the audit and have a company that you can use as most consultants don’t employ an auditor on staff), S-1 filing, SEC approval, FINRA approval, symbol achievement, market maker or broker dealer relationship/contract setup and investor relations for long term success.

For Corporate Consulting or Investor Finder Services, call Princeton Corporate Solutions at 267-233-0183Take Your Company Public the easy way!

 
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Take Your Business Public and Raise the Capital Your Need

20 Mar

In these gloomy times businesses are looking outside the box for a localized injection of economic stimulus. Banks are hording their bags of government bailout money while the small business owner is forced to fend for themselves. Nothing but doom and gloom seem to infest all aspects of present and near future financial forecasts.

There is, however, a fiscal niche being carved out as we speak by wealthy, aggressive and eager angel investors. Angel investors, private investors, micro ticket investment partnerships and other alternative financing groups are spearheading a global rally to buy into promising mid-size companies from all industry genres. The elements of a viable company prime for investment are solid and realistic growth potential, talented ‘who’s who’ executive staff with the right educational and professional pedigrees, minimal debt, a solid business plan laying out every minute intricacy that could affect growth, financial return and the exit strategy.

Another important element that is often overlooked but is a mandatory prerequisite for the SEC regulated exchange of cash for equity is a Private Placement Memorandum. A Private Placement Memorandum takes advantage of three powerful Regulation D Rule exemptions (Rule 504, Rule 505 and Rule 506) these are technical documents that spill the beans to the potential investor. In a PPM all the financial and industry risks are put on the table as well as stock prices, a breakdown of fund raising benchmarks and what the money will be used for etc.

A Private Placement Memorandum can be costly if you hire a law firm to custom author the package for you but there are consulting firms that will do this for as little as $5000.

If you are serious about raising funds for your company you need to add a Private Placement Memorandum to your list of necessary documents to hand off to the investors in order to get the cash you need in an expedient manner.

Want to find out more about Private Placement Memorandums, then visit Princeton Corporate Solutions site on how to choose the best Offering Memorandum for your needs.

 
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Posted in Finance