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For those of you in a mad dash for funding you’ve obviously realized that banks and institutional lenders aren’t going to be parting with their cash anytime soon. The bailout money provided to them by our tax dollars was meant o jump-start the entrepreneurial community and spike job creation but this just as everything else our government does with the shake down capital it rapes from it’s citizens is nothing but smoke and mirrors.
Yes they are taking your money and placing our children in the greasy talon grip of indentured servitude without a choice and yes the banks were suppose to use this bailout money for our economy but the hand is quicker than the eye and here we are again, broke and left in economic limbo as once again the system and the government sucker punched hard working citizens, drug them into a dark alleyway and put the beat down on Joe Public. Who will come to your defense if the government that has an emergency IV hooked up to your bank account and wallet will do nothing but lie as reciprocation for destroying your company, taking your money and pummeling your children into submission as future economic lab rats.
There has been a lot of talk about Regulation d (regulation d 504, regulation d 505 and regulation d 506) also referred to as a Private Placement Memorandum which is a little used process of raising public capital via private placement with an SEC approved process for raising capital for private companies. In a typical economy investors will get involved and let their investment ride while the company restructures and pays out modest dividends prior to the payback of the Reg D payback.
Here is the problem with Regulation D, in these current economic conditions an investor is demanding a built in exit strategy with a time limit and the investment must be done in a strategic, solid manner. A prototypical, off the shelf PPM will have too many restrictions for an accredited investor to be able to sell their shares to a ready market which means the investor will need to hang onto those shares for 24+ months and just hope that the company doesn’t go broke during that period.
Here is an alternative. Use the regulation d rule 506 exemption as a pre public structure to raise just enough capital to get your company moving and use the additional proceeds to go public on the OTCBB (over the counter bulletin board). Place the pre public investor’s names on the s1 so that they can trade without restriction when the company is public just a few months later. There is you exit strategy and optimal capital raise. Make your fund raising efforts count, reg d is a great pre OTCBB structure which will provide the powerful exit strategy that will have investors banging your door down with interest.
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The ‘Spoke Wheel’ Approach To Taking Your Company Public.
A public corporation, just as a private company is composed of several contributing factors that dictate the outcome of its success. If you visualize your corporate entity as the ‘hub’ of the wheel and each spoke as a ‘contributing asset’ to the company you’ll find that the more spokes in the wheel, the more weight the wheel can carry as its strength rests on scores of unified connections working together, each with one simultaneous point of interest, the hub.
These hub connections can be anything that contributes to the overall success and perpetual, yet controlled, growth strategy of the company such as: a dozen strategic partnerships that act as growing distribution channels for your product or service, finance alliances that take care of your growth capital needs, multiple legal professionals that you can tap into for advise and corporate strategies, dozens of companies within your industry that focus on a different element of the industry but cooperate as a referral source for new business and on and on.
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Your goal, in creating a solid, strategically aligned pre public and post public corporation is to keep building spokes and bringing on partners and executives that can instantly contribute to adding more strategic alliances and growth enhancers to your ever evolving and emerging corporate wheel.
If you are a public company, partnerships that you should have heavily represented in your model should be securities attorneys, market makers and broker dealers, several publicists with different areas of media focus, viral publicists, investor relations facilitators and service providers etc. Don’t forget the political contacts and padding contacts. By ‘padding’ I mean contacts that may serve no active role other than having some big names affiliated with your company that can gain attention within and outside your specific industry genre.
Go Public With Your Company, call Princeton Corporate Solutions at 267-233-0183Take Your Company Public the easy way!
Our firm takes small companies and industry genre leaders public in the United States. We specialize in the OTCBB, A to Z facilitation as well as NASDAQ IR and strategies consulting. We work with global corporate entities from Greece to China, from South America to Europe. I say this not to boast or market myself but to give you some comfort that what you are about to read is based purely on experience and absolutely objective and if you are about to take your company public or trying to turn-around or restructure your public entity, this information will be of tremendous help to you.
I see companies rise and fall before and after the ‘going public’ process. Some companies have great ideas and constantly struggle, some are hardly worth their weight in pocket fuzz but thrive and to understand why we must step back and look at a public and pre public concept as you would a globe that you can set on a desk and spin slowly over and over again. Stand on the desk and kneel on the ground, stand on your hands if you have to and the point of this exercise is to look at your public entity from every imaginable angle searching for any and all chinks in the armor.
Think past the basics of going public. Any informed CEO, COO or CFO of a pre or post public entity will comprehend the basics: you’ll have a first round seed capital raise, you’ll need a solid board of directors and solid executives with an appealing pedigree, your company needs a viable and yes, ‘recession proof’ product or service. You need a solid pre public corporate publicity strategy to make your company stand out like a blinding beacon with strategies that wrap around the corporation as well as each executive to increase the market awareness of their existence in the industry power structure and of course you’ll need solid and massive post public investor relations to stabilize and grow that stock price.
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Now here is something that you may not have taken into consideration but is a necessity to filling in the gaps of your corporate profile as well as strengthening those invisible inferiorities in the corporate armor. Political power structure contacts are a must. Yes, political in every sense of the word. I mean you need strong contacts in your operating country’s political electoral system of influence to gain access to those ‘no bid’ contracts. It’s a mandatory evil that separates the men from the boys. Get to know lobbyists, congressmen, political attorneys, senators and most importantly get on a first name basis with the direct executive assistants for each of these players as they are the ones that will make the introductions.
Your face needs to be seen in the papers and journals alongside of these power players. Your name needs to be mentioned in cigar filled rooms where these individuals congregate. Don’t think for a second that hard work, blood sweat and tears will get your company to the next level; it’s all about connections and the public conception of you and your company.
Simultaneously you need to take into consideration the social political conception of your company. Truth be told, celebrities and corporations get involved with charities and socially conscientious callings such as Poverty Awareness, Haiti Financial Assistance, African Relief and like strategies not necessarily because they have a spiritual awakening and want to make the world a better place.
These companies are piggybacking off of the free press and the social idea that free money to charity somehow justifies the means in which they earned it. Free handout charity affiliation has a way of wiping the slate clean and telling the public that if they buy your product or use your service they are, in some strange way, making the world a better place and instantly something that was once considered a guilty pleasure (such as a $5 coffee and $8 scone from Starbucks) is now a socially responsible action because .02 cents per $20 net profit intake goes to pay for coffee beans that grow in a third world country that is trying to ‘get by’ and grow organic, whatever.
Going public is one thing, staying public is something entirely different, staying public and profitable is almost unheard of. Increase your chances of success by looking at all the angles!
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Why Are You Writing A Private Placement Memorandum (PPM) To Raise Capital? I feel like I have to put this out there as a corporate strategies consultant with a firm that is completely submerged in the industry of authoring business plans, private placement memorandums (regulation d rule 504, 505 and 506), facilitating direct public offerings to our database of investors and taking companies public on the OTCBB.
When I get calls about private placement memorandums it is typically one of two scenarios: 1. They want to raise capital and they are shopping around for the cheapest PPM author they can find. 2. They have made the mistake of using the cheapest PPM author they could find and now they can’t find an investor that will fund their 70 page stack of toilet paper.
It never ceases to amaze me when companies are trying to convince investors that they are ready for that next step in their corporate evolution, yet they are being penny wise and dollar foolish with the most technical document their company has ever had done. And why do people put the cart before the horse? I mean, why do people write the private placement memo before they know who their audience is? As a rule of thumb you should write for your audience.
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A ppm that is being written for venture capital firms will demonstrate and cater to more of an equity control and technical audience whereas a ppm that is being written for angel investors, private investors and small private equity firms who want to be in and out of a transaction will typically want to buy low and sell high and will typically want to invest in companies that are going public in as short of a time as possible.
The investors in pre public companies and other ‘angel’ type investors have a minimal bankroll of $1m or less (usually) so they have to be in and out of a transaction fast, thus the need for a ’selling shareholder offering’. This is a mandatory prerequisite for a company that wants to raise capital from angels and go public. With a selling shareholder offering you are setting up a scenario that ever investor dreams of.
You are giving them the ability to buy deeply discounted stock and 3 or 4 months later, when the company goes public, they can sell their stock into the market at an offering price that is typically 4 or 5 times what they originally purchased the shares at and the company is happy because the investor created a bridge for the company to go public and then created a public float.
Now, after reading this, you will see why writing a PPM before you know who your audience is and before you’ve contracted with a consulting firm is a critical mistake. Find a consulting firm that is well rounded as a capital raising facilitator and have them help you set a goal as an end result and then build your strategy from there.
For Corporate Consulting or Invest Seed Capital In Pre-IPO Companies, call Princeton Corporate Solutions at 267-233-0183Take Your Company Public the easy way!
I consult in the turnaround sector with public companies on the Pinks, OTCBB, London Exchange, Frankfurt Exchange and every exchange in-between and everyone seems to have the same issue: there stock isn’t trading at the price they desire and they are dying to find a way to fix the problems that are hindering their trade. It usually comes down to a few basic elements. Use each of these elements with caution as this industry is full of predatory organizations and consultants and can be dangerous to amateurs. If you’re a newbie, that’s ok. Do what you can but know when you are in over your head and turn the remaining process over to people that swim with sharks for a living.
Public company structuring and turnaround strategies typically center around the elements of: corporate publicity, individual executive publicity, lack of an experienced publicist, lack of strategic alliances and lack of the proper promotion that is conducive to getting stock investors to pull the trigger.
Corporate publicity can be broken down into the immediate and ongoing use of: press releases, viral marketing video and article submission, corporate blogs, investor relations, market maker or broker dealer that is affective and of course the almighty strategic alliances that build hype and build power behind your brand.
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Another major component that most companies are lacking is ‘Individual Executive Publicity’ by use of press release, viral market: video uploads with interviews and how to type material, article submission and personal blogs that center around the particular industry genre issues. It is important to make each executive stand out like a beacon in the industry and to press the reality or create the reality that your executive staff is composed of the who’s who of your industry.
Next you’ll need a corporate publicist with a focus on getting your CEO, CFO and/or corporate executives on TV and radio panel discussions as industry authority as well as newspaper and magazine articles and interviews about your company and its executives.
Don’t forget the importance of ‘Strategic Partnerships’. Announce new partnerships with multiple press releases, photo ops and articles. Pick strategic partners that have name recognition or are about to be in the public eye to piggy back off of the publicity they are receiving.
If you are an OTCBB or Pink Sheets company email campaigns to stock Investors are a quick way to get a nice bump in exposure and stock price but too many of these campaigns done the wrong way can hurt your company so be careful. Your investor relations consultant should have you listed on multiple stock alert services that run ongoing back to back. And the last but not least, the old fashion snail mail ‘Direct mail to stock investors’ can be the added bang to your stock price rising and stabilizing.
Turning around a company can and expensive proposition today but can increase your company’s value exponentially if done by an experienced professional. It’s a process that’s worth it to companies with an eye toward longevity.
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Business Owners: Build A Corporate Structure That Investors Love! Ok, you’ve decided to go after investment capital but you’re not sure where to start. Here are the basics that you should pay close attention to before putting your company in front of investors.
First and foremost you need to perform an industry analysis that answers the questions pertaining to where you are in the industry and who are your competitors. It doesn’t matter what product or service you offer. You could be selling underwater sock fitting kits and there is a competitor and industry leader somewhere in the world. Don’t be so naive in thinking that there is no competition or that you are at the pinnacle of your industry. Show your audience that you’ve done your research and that you’ve identified the players in your market.
Next get your executive team together and it better be the who’s who in your industry. If you can’t attract the upper echelon of your industry genre then you need to do some serious PR on behalf of your individual executive team to show the public what they are made of. Brand them as the up and coming powerhouse executives in the industry. Publish their articles and knowledge on industry blogs and article submission sites. When a funding source initiates general due diligence you need to shine like a lighthouse in the fog. Each and every executive team member needs to have an image that screams power, success and investor security.
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The next thing you need to do is take a serious look at your board of directors. Who is on your board, what is their compensation and is there someone that is a better fit for formulating strategies and alliances than those who are currently populating your director staff.
One of the main reasons that investors turn down companies for funding is because they lack the backup of industry players in connection to strategic alliances. You need to identify and contractually reach out to companies that will enhance your overall business strategy. Your minimum goal should be 10 solid, aged companies that have already branded their names in the marketplace and are willing to add you to their mix of advertising and ongoing strategy and they will expect the same from you. Show investors that it’s not just you treading water in the industrial whirlpool and that you’ve built a life preserver of alliances.
Now you are ready to write a business plan and private placement memorandum that takes all the essential elements above and puts them in two well authored and to the point documents that will make an interesting and informative read for investors who have a track record of investment in your particular industry. If you’ve written your own business plan, toss it. If investors are going to take you seriously you need a professionally written business plan that touches on all the triggers that investors are currently looking for.
Next, it’s best to use the Regulation D, Private Placement Memorandum as the vehicle for staying within SEC guidelines for raising capital and you should use a Direct Public Offering as the process for raising the actual capital. Reaching out to friends, family, industrial counterparts and alliances should be the first place you go for funding. If you are lucky the consultant you hire to assist you with the above processes will have a solid database of investors to assist you in your initial, first round raise via DPO.
Last but not least you should consider, even though it’s not a mandatory requirement for a PPM or DPO, getting an independent audit done on your company to demonstrate an objective analysis of your financial reality so that investors can find their comfort level quicker without a prolonged comments stage.
There you have it. These are the basics to what it takes to achieve equity investment in this current market. Get out there and raise some money!
Foreign, Indian and Chinese Companies, Take Your Company Public, call Princeton Corporate Solutions at 267-233-0183Take Your Company Public the easy way!
As a global corporate strategies firm we are beginning to get many inquiries from foreign corporations that wish to take advantage of the rapid growth capabilities of trading stock in the US. Getting set up with a consulting firm that specializes in fund-raising mechanisms such as private placement memorandum, direct public offering and/or taking one’s company public on the OTCBB can help a foreign entity obtain virtually instant gratification of raising large amounts of capital in an expedient manner.
Chinese companies typically have similar questions and concerns when they contact us such as: How long does it take to go public? What are my options for raising capital with a US structure? Do I need to have an American corporation? How much equity should I give up to the public? Can I merge my Chinese company with my American company to strengthen the American corporation’s asset value? And How do we sell the stock to the public once we have a symbol and are ready to trade?
How long does it take to go public? To go public on the OTCBB you need to have a solid business plan and corporate structure, usually a pre-public round is done with a Private Placement Memorandum to offer discounted stock in return for equity seed capital that will fund the ‘go public process’. This process can take a few weeks to a few months, it all depends on the deal and what you’re offering the investors at this stage. Next you’ll want to do your third-party audit and your S1, after your audit is done and your S1 is filed you’ll enter into the ‘comments’ stage where the SEC is going back and forth with you or your lawyer or your consultant (whoever is helping you go public). The comments stage can be anywhere from a couple weeks to a few months, the more unorganized the company, the longer the audit and comments stage will take to complete. The average for an organized company with the audit and S1 prep done simultaneously is around 4 to 6+ months (the more unorganized the company the longer it takes).
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What are my options for raising capital with a US structure? Raising capital in the US happens quicker than in other countries because of the vast wealth in North America and its position in the global market place. Invest-able deals are all in the eye of the investor. The challenge is getting in front of investors with a track record of investing in your particular industry genre.
Do I need to have an American corporation? Yes, to go public in the United States, you need to have an American corporation. This doesn’t necessarily mean that it has to become your primary corporation. You can use one corporation as your operational entity and one as a subsidiary but to strengthen and stabilize your share price you’ll need to eventually show growth and assets in your US entity.
How much equity should I give up to the public? This is a decision that will be made with your attorney and Board of Directors and the decision is based off of your company’s industry position, the value of empirical assets like equipment, contracts, patents, current foreign based share holders etc.
Can I merge my Chinese company with my American company to strengthen the American corporation’s asset value? Yes absolutely. This is the most popular technique to show current and future shareholders that your company will be a long term public player. The more asset ’skin’ you are able to put in the game in the beginning the better for the longevity of your enterprise.
How do we sell the stock to the public once we have a symbol and are ready to trade? During your ‘going public’ process you’ll be attached to a market maker. The market maker, your consultant and your publicist (if you don’t have one your consultant will find one for you) will work together at all fronts to help you leverage your new public entity. Your publicist will have authors in newspapers and magazines do write-ups on your company as they help you label yourself globally as a new industry powerhouse, each of your executive team members will also have their own publicity strategies going as well so that your publicist can place them on expert TV and radio panels as industry experts which brings website visitation, new distribution opportunities, personal and corporate branding and investor confidence which is all conducive to an increase in your share price. All of this will bring call volume into your market maker while they are selling your stock to new contacts as well as calling on their established database of investors. The process is typically audited quarterly by your consultant to find dead weight or weaknesses and tighten everything up.
Using the public fundraising strategies based in the US is a wise decision to grow your business. Finding the right consultant is crucial. The right consultant can make or break your efforts to go public in the United States.
Go Public With Your Company, call Princeton Corporate Solutions at 267-233-0183Take Your Company Public the easy way!
For many professionals, entrepreneurs and business owners the current reality of their intercompany and inter industry promotion and prominence is a far cry from where they originally envisioned themselves to be. What is the factor that thrusts some people and companies forward in the professional sense and why are some straggling behind like desperate, obsolete room size computers in a hand held PC world?
Its actually quite simple and it all comes down to a decision… a decision to step up and dominate in a no holds barred, bare knuckle fight to the finish. You need to understand and be comfortable with the reality that not everyone will make it. Most of your colleagues and professional friends are not psychologically or professionally built to last, meaning, they are not willing to do ‘whatever it takes’ to get to that next level.
Here is how it’s done: First, decide on what you want, who you want to be and where you want to go in your career. Second, surround yourself with people that have the above characteristics your are seeking to acquire. Chances are, most of these characteristics will be spread out over several different people as opposed to one or two professional who demonstrate your future self so find 10+ people to become well associated with and begin to pattern them. Don’t just pattern the outward and obvious characteristics but absorb the aura of their overall presents (calm, cool, collect and maybe even arrogant and rude at times).
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What are their hobbies and extracurricular interests as these interests are a contributing factor to who they have become. Next, make a decision! Make a decision to overcome any obstacles that stand in your way. Dump friends and associates who are not supportive as they will only hold you back. You should quickly sever ties with any and all counterproductive individuals and interests that keep you from achieving your goal. Next, every morning as you’re getting dressed, brushing your teeth you should also be putting on your psychological garb as well. Slip into the mindset of that person you want to be.
Put blinders on your eyes so there are no distractions. What you will find is that opportunities will seem to fall into your lap because you are willingly submerging yourself into a subculture that has worked for all of those around you who are living the dream that you will soon be part of.
As for domination, you will find that stepping into this new code of conduct and professional character you will begin to steamroll forward, yes some people will be crushed under the wheel of your progress but this is a natural part of evolution. Use the element of arrogance, not in an artificial way that is used by insecure people but in a form of self promotion. Begin to state your opinion on industry specific blogs.
Put out industry niche information videos on viral media sites. Bring internet surfers to your blogs and videos with social and news bookmarking links scattered all over the web. Brand yourself as the ‘god’ of your industry. Your opinion matters and after others see you opinions and concepts enough they will begin to see these ideas as the norm. They will feel that up until now they have been misinformed and uninformed and you are the person on the cutting edge of your industry. As you build momentum, whatever you do, do not stop! As you build traction of growing your own personal ‘brand’ and ’subculture’ within the industry, this should only influence you to take it one step further with articles submitted to global, high PR article directories and press releases through various channels. This is just the beginning but you are on your way to absolute, industry domination!
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Where Are All The Good Investor Finder Services? Companies raising capital whether trying to get a loan, raise equity capital with a private placement memorandum or go public on the Pink Sheets, OTCBB or any other platform has no doubt been told to find a good investor finder. Sure there are multitudes of membership databases like ‘Angel Funding Project’, one of the industry’s largest and many others but where are the ‘investor finders’ that everyone’s CPA and CFO are talking about?
I’ll tell you where, they’ve discovered how valuable their portfolio of active investors actually is and they’ve teamed up with consultants that take companies public and they provide the 40 initial investors needed to qualify for a public offering and they also help supply the capital that the consultants need in order to facilitate the ‘going public’ process. They have gone from making $2,000 here and $10,000 there, to making $100,000 here and $500,000 there by getting involved in the ultra lucrative world of pre-IPO finance and technical facilitation.
They are going from the headaches of trying to get investors interested in placing money with a goofball who doesn’t think he needs a business plan or PPM to raise capital to getting the red carpet rolled out for them at every term by investment bankers, global broker dealers and companies that desperately want to go public but are working with minimal liquidity.
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Quality investor finders are becoming more and more valuable as the economy declines in some regions and remains stagnant in others. Good investor finders no longer sell their services, instead clients and strategic partners must sell them on why they should break open their contact base on their behalf. As the global economy changes, new opportunities are popping up everywhere. Investor finders are being heavily lobbied by Chinese and Indian companies who want to merge their foreign corporation with a public American entity.
Any solid consulting firm can take a company public but few have the contacts to be truly considered full service. If you are interested in taking your company public and have a solid business model, find an IR consultant and sell them on your corporate strategy and if they take you on you’ll be raising capital with lightning speed.
Indian and Chinese Companies, Take Your Company Public, call Princeton Corporate Solutions at 267-233-0183Take Your Company Public the easy way!
Those who are able to achieve higher yields on their investments typically don’t have a broker and don’t listen to the advice of a financial planner. After all, if either of them knew what they were talking about they wouldn’t be hustling others into allowing them to learn the trade game off of other people’s money.
The reality is the few that have gained a comprehension for seeking out and getting involved with trades that open the floodgates to massive profits use their own money and operate as part of a small, tight knit group. The members of this ‘group’ always have their feelers out like tentacles sucking up and analyzing potential transactions, immediately looking for strategic elements and immediately dumping 99% as they don’t meet the criteria.
Two major components that professional investors who use their own money and are able to consistently pick winning transactions are companies that are in merger and/or acquisition mode and companies that are seeking seed capital specifically to go public.
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Let’s focus on the latter. Companies seeking seed capital to go public are often financially viable companies with modest liquidity but are taking on seed investors so that they can meet the SEC minimum criteria of having 40 investors on the books to qualify for going public. Investors that are able to, literally, make millions per transaction have a way of getting into these opportunities by connecting with consultants who take companies public.
If you are able to get involved with these consulting firms and if you have some capital to designate as a seed investor, you can literally be placed in 4,5 or even 6+ pre IPO investments per year. When you are one of the 40 investors in a pre public OTCBB corporation you are usually investing seed capital at a fraction of the future public price by way of DPO (Direct Public Offering). The difference between what you pay for the seed stock and what the company charges per share when public is the profit.
It isn’t at all out of the ordinary to buy seed stock at 50 cents and have that stock gain in value of $1.00 to $1.50 when the company goes public and yes, you just made 50 cents to $1.00 net profit on each share. The great thing is you can often invest as a seed investor with as little as $5,000 to $10,000. If you have more capital you can spread it out over multiple pre-IPO opportunities. Seek out the pre- public companies and make a fortune!
For Corporate Consulting or Invest Seed Capital In Pre-IPO Companies, call Princeton Corporate Solutions at 267-233-0183Take Your Company Public the easy way!
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