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Posts Tagged ‘how to take your company public’

Structure your company should spearhead your capital raising initiative. Make sure that your corporate layout is conducive to creating and retaining investor and venture capitalist attention. You should have a solid and elite executive team composed of the best of the best that your industry has to offer and if you can’t attract those in the upper echelon of your business genre, you need to take an active approach to branding them as experts using on and offline PR campaigns labeling yourselves as industry experts who are innovating industry changing solutions. Create a stir, be controversial (but not offensive) and be ready to back up your stir with empirical evidence of your knowledge and success. You should have an advisory board and board of directors composed of industry specialists. Each individual should represent a forte that makes investors start to salivate when they are reading the bio section of your business plan. They should be able to contribute with contract negotiation, strong alliance introduction capabilities and more. When choosing professionals to fill the void of adviser and director positions you should think in terms of corporate ‘growth’ and ’stabilization’.

Next you want to make sure that your entity is prepared to receive debt and/or equity capital. You’ll need a solid business plan, don’t write it yourself, you’ll only hinder your ability to raise capital. Call a professional to write your strategic business plan. Next you’ll need a way to distribute equity or debt shares, a Private Placement Memorandum is the most common mechanism for helping companies raise capital quickly and easily while staying within the regulation guidelines of the SEC. Your PPM must be written by a professional to deliver the ultimate protection for your company while simultaneously spelling out the technical intricacies of your business to the investor.

Now that your company is structured properly, you have a business plan and a PPM, you are ready to start raising capital. Your first call should be to a corporate turnaround consultant with an arsenal of global funding contacts composed of all the necessary contacts such as: venture capital firms, private equity firms, angel investors, private investors, accredited investors, structured finance firms and so on. This turnaround consultant, if they are part of an established firm (always use a small boutique firm if you can find one, they are much more affective and one on one than the larger firms and tend to get the job done quicker without the headaches) they will have a service call and ‘Investor Finder’ service. They will reach into their gargantuan bag of contacts and give you so many funding options your head will spin, thus, making your fund raising efforts fast and painless.

Now that you achieved your first round of fund raising it’s time to get serious. Yes! It’s time to take your company public. Stay away from Pink Sheets and Reverse Mergers, you’ll only regret it. If you are a smaller business or a startup, your best bet is the OTCBB. Go back to your turnaround consultant and have them start putting you through the sec audit, sec registration, FINRA registration and Market Maker joint venture and S1 filing. They should be able to handle the entire ‘going public’ process for you and in 4 to 7 months, you’re public and trading.

Be sure to take advantage of the multitude of strategies to capitalize off of your securities. Remember there are many ways to capitalize off of your shares, selling shares through your market maker, continuously engaging in heavy PR to stabilize and enhance your stock price and another way that many entrepreneurs don’t consider as an option when raising capital, the almighty hedge lender will can lend your company money against your collateralized securities. Yes! Use your stock as security for financing. After you pay off the loan, line of credit or lease you get those shares back (be sure that your lawyer audits your contract with the lender to keep away from any convertible stock clauses). So now you are raising capital by selling stock as well as the ‘on demand’ loan or loc concept of security backed lending.

Congratulations! You’ve just completed ‘Real’ corporate finance 101! Now get out there, put your company together and start raising the capital you need.

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

So many companies dream of going public both as a growth and exit strategy but unfortunately few succeed with this process. The third party audit, sponsoring of the S1 and 211 by a market maker and SEC comments stage is just one of the obstacles involved with taking a company public. The attempt at going public and actually achieving a symbol are two entirely different things and if you are lucky enough to achieve a symbol there’s a completely separate area of expertise needed to keep your stock trading and to preserve a company’s longevity in the marketplace.

Here are some things you need to keep in mind when gearing up to take your company public. Forget everything that you’ve read and heard and pay attention to what you’re about to read because this is the straight forward, objective reality of the process. First, do not hire an attorney to take you public as they will take you on a long drawn out process to get as many billable hours as possible, instead, hire a consulting firm whose sole business model is to take companies public and take advantage of the relationships that they have with attorneys. This is the first rule: hire a consulting firm that offers a complete A to Z turn-key solution for taking a company through the process of going public, achieving a symbol and preserving the trade with a solid, ongoing post public investor relations strategy.

Next, when you’ve decided on a consulting firm evaluate their team, don’t ask for references to call to research their track record, better yet, ask for symbols of previous clients and links to the Edgar database to check out current deals in the comments stage. The proof is in the empirical track record, not potentially fraudulent phone references that are easily engineered and BS.

Now look at their team. Make sure that the consulting group has a solid legal team, market makers, investor relations team, auditing group and someone well versed in the comments stage response as this can be one of the major hang-ups in achieving your symbol in a timely manner. Also, most important, they absolutely MUST have a solid group of investors to fund the process for equity and to sell their shares into the marketplace post public to create a market for your stock as well as a network of market makers familiar with your deal to piggyback off of the sponsoring market maker’s 211.

About one month away from symbol achievement you’ll want to meet with your consultants to get a solid IR strategy together for a big offering dbut. You will want to set up a strategy for 30 day IR intensives every other month with general corporate publicity strategies in between. I suggest changing your IR firm each quarter to keep it fresh and open up your trade to a new network of investors.

One special note to consider is that when you are raising your initial round of capital from seed investors, the fastest way to do this is to have a fist full of contracts and purchase orders in hand to strengthen your position and publicize this reality with an arsenal of press releases. Its 100 times easier to raise capital if you are showing seed investors a handful of ’soon to be’ cash than to solicit them empty handed.

Obviously there are a multitude of other issues that you need to take into consideration when going public so find a consulting firm that can help you make it happen. Don’t try to venture out into these waters on your own as you’ll be diving into shark infested waters and you’ll almost certainly fail.

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!

Whether you’re trying to raise debt or equity capital there are still certain unwritten rules that apply that cater to the mentality of today’s investor and funding community. Certainly there are scores of private placement memorandum and business plan chop shops that wouldn’t know how to properly consult with your company or write a fundable document even if they wanted to but they will gladly take your money to throw together a template and try to pass it off as custom work.

The issue is this, it’s not necessarily the consultant, though these fly-by-nights shoulder a large portion of the blame, but the client usually doesn’t even have the proper structure in place to attract a funding source even if they had the most incredible PPM and business ever to hit the venture capital marketplace. Here is a simple (very basic) way to evaluate your company to find out if you are properly structured to attract capital. Have a corporate meeting and ask yourselves the following questions: What type of corporate structure do you have and why did you choose that particular structure? Break down your executive infrastructure, where do your individual executives stand in your industry, do the unthinkable, Google everyone’s names; are the people running your company real industry players? Are all the basic positions accounted for (president, CFO, controller etc)? Next, look at your advisory board and board of directors. If by some miraculous act of God you actually have these two groups represented in your company, how did you qualify them? Sorry but if you have an attorney on your board because he’s, um…well, an attorney, that’s not good enough.

You need an industry specific legal guru who not only spells out the intricacies of your business genre’s regulation but they must also be actively qualifying potential strategic partnerships as alliances for your company. He should be reaching into his client base and actively picking companies that could enhance your company in distribution or in any other way that will have a profitable outcome for all involved. Each of the members must be serving a similar purpose.

Next, on what criteria are you basing your share price or loan amount? If you don’t have a clear cut ‘use of proceeds’ model, you need one. This and many, many other questions need to be asked before you are actually ready to raise capital and in all reality, until your corporate structure is in place you shouldn’t even attempt to write a business plan or a private placement memorandum. If you are serious about setting up your company to attract investors you need a turnaround consultant, you can’t do this on your own. There is an entire industry that centers around structuring companies for their first and ongoing capital raise.

Before you blackball your company by prematurely attempting to raise capital, the critical concepts you need to keep in mind are (precisely in this order): corporate structure, infrastructure, advisory board, board of directors, use of proceeds, business plan, private placement memorandum, investor finder, funding. Look at each aspect listed here as its own item, break it down and analyze every minute aspect of each element and look at everything objectively and eventually your company will evolve into a structure that is fundable and stabilized for years to come.

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