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Fundraising

Companies seeking project financing, monetizing assets, capital leveraging or other types of funding, must avoid a statistical 2-3 years and $1.0 Million in wasted time and expense pursuing ineffective “opportunities” without verification, and losing legitimate offers for lack of proper strategy or preparation. The only way to reliably achieve successful funding results is to secure direct support and expert assistance of private investment bankers, who know the inner workings of all banking instruments and financial transactions. Advisory backing of a banking institution is the most powerful way to take advantage of all possible opportunities, for best and fastest results at greatly reduced effort and cost. 

If Exists: Add to Company Value up to:
Sound Idea (basic value) $1/2 million
Prototype (reducing  technology risk) $1/2 million
Quality Management Team(reducing execution risk) $1/2 million
Strategic relationships (reducing market risk) $1/2 million
Product Rollout or Sales(reducing production risk) $1/2 million

Note that these numbers are maximums that can be “earned” to form a valuation, allowing for a pre-revenue valuation of up to $2 million (or a post rollout value of up to $2.5 million), but certainly also allowing the investor to put much lower values into each test, resulting in valuations well below that amount.
Create content for updates

Even when you feel that there’s nothing to update, remember that backers are interested in details of your startup that you might take for granted. This includes (but isn’t limited to):

Funding milestones. When you’ve reached a significant percentage of your total funding goal, let your backers know, and thank them for their support!
Example: “We’re halfway to our funding goal! Thanks to all of our backers for your continued support, and don’t forget to keep spreading the word!”

Expressed investor interest. If one or more investors have expressed interest in your startup, don’t hesitate to let your backers know! This will encourage backers by letting them know that others have serious interest and faith in your startup.
Example: “Exciting news – we’re currently in talks with an investor thanks to all of the traction we’ve gained through our funding campaign! Thank you, and stay tuned for developments!”

Supplier developments. Have you negotiated a lower price or better materials for your startup? Show off your startup’s developments through an update!
Example: “Great news! We’ve been able to locate a manufacturer for a much lower pricing point – so we can make more great products with the pledges that have so generously been provided! Thanks!”

Product/service changes. If you’re considering or experiencing a pivot, be sure to give your audience a heads up.
Example: “Friends, family, backers, and fans: we have decided to take our startup in an exciting new direction! Rather than building a car that runs on water, we’ve decided to build a car that runs on hydrogen only. Check back for more updates on this development!”

Media coverage. Fundable startups are often the recipients of awesome media coverage. Let your backers know that your startup is newsworthy!
Example: “We were just featured in TechCrunch! You can read the article here (insert link).”

Social sharing extends your updates’ lifespan

When you update your profile, most of the people who will notice are those who are already following or backing your startup. Most update views will come soon after the updates are posted; the traffic will then trickle off and the update is considered spent. However, when you share your updates on social media platforms (and encourage your network to do the same), the content is spread farther and has a chance to live longer. That means more page views for you!

WHAT IS A “REG S” FOREIGN DIRECT OFFERING AND HOW CAN IT HELP RAISE CAPITAL FOR MY BUSINESS?

The Regulation S Offering (Reg. S) is an exemption designed by the SEC for companies seeking to raise capital from investors located OUTSIDE of the United States.

CAN I SOLICIT CAPITAL FROM NON-U.S. INVESTORS THROUGH GENERAL ADVERTISING AND GENERAL SOLICITATION?

YES. Unlike the restrictions imposed by Regulation D, a U.S. company or any person acting on its behalf seeking to raise capital utilizing Regulation S exemption MAY:

• Use any form of non-US “general solicitation” or “general advertising”
• Use foreign investor direct mailing lists
• Pay non-U.S. finders fees
• Place tombstone ads in foreign magazines and newspapers

Our FOREIGN STOCK OFFERING SOLUTION includes:

• Preparing a Foreign Private Placement Memorandum
• Preparing a Foreign Subscription Agreement with all Reg S disclaimers
• Preparing an Foreign Offering Circular
• Purchaser Qualifying Questionnaire prepared for non-U.S. investors
• Financial Spreadsheet
• Tracking Spreadsheet
• Designing a password-protected SEC compliant web page
• List of countries which permit the sale of private placement securities
• List of foreign newspapers and magazine publications
• Design a tombstone placement advertisement
• FREE LIST OF 5,000 potential NON-U.S. ACCREDITED INVESTORS
• Inclusion for one year in a foreign angel investors network
• Introduction to foreign placement agents and capital finders

FOREIGN STOCK OFFERING SOLUTION…………………….US $14,900

We approach capital raising from a process perspective. We conduct due diligence on a client’s business, analyze the client’s financial and business plan and meet with the executives and operators of the business. That process sharpens the company’s financial modeling; financial assumptions and business plan as well as allows us to understand the strengths, weaknesses and company-specific issues facing that business. In tandem with the due diligence process, our institutional sales group and high net worth sales group develops a list of potential investors for that business. We use several sources of information to create that list
Forbes.com has recently published the following 8 crowdfunding resources:

  1. Kickstarter.com:  Kickstarter is the 800 pound gorilla in crowdfunding, originally designed and built for creative arts, many technology entrepreneurs now use the site, some reporting to have raised millions of dollars.  The Kickstarter funding model is an all-or-nothing model.  You set a goal for your raise; if your raise exceeds the goal, you keep all the money, otherwise your supporters don’t pay and you don’t get anything.  This protects supporters from some of the risk of your running out of money before your project is completed.
  2. StartSomeGood.com:  StartSomeGood, which I used to raise some money for my book, Your Mark On The World, is great for early-stage social good projects that are not (yet) 501(c)(3) registered nonprofits.   StartSomeGood uses a unique “tipping point” model for fundraising, allowing you to set a funding goal and a lower “tipping point” at which your project can minimally proceed and where you will collect the money you raise.
  3. Indiegogo.com:  Indiegogo allows you to raise money for absolutely anything, using an optional “keep what you raise” model with higher fees or pay less to use an all-or-nothing funding approach.
  4. Rockethub.com:  Rockethub is also a broad platform targeting “artists, scientists, entrepreneurs, and philanthropists” on their site, using a keep-what-you-raise model that rewards you for hitting your funding goal (or penalizes you for failing to hit it).
  5. Pozible.com:  Pozible, run from Australia, has a global platform for all types of projects, emphasizing “creative projects and ideas” and specifically precludes fundraising for charities.   Pozible operates with an all-or-nothing funding model.
  6. Causes.com:  Causes is designed specifically for 501(c)(3) registered nonprofits to raise money.  The fees are low and all donors on the site understand that all of the contributions will be tax deductible.  Causes is widely used to launch “action” campaigns, like boycotts, petitions and pledges rather than fundraising campaigns.
  7. Razoo.com:  Razoo boasts that it has now helped 14,000 causes raise over $100 million.  This site is exclusively for social good causes but is not limited to 501(c)(3), using a keep-what-you-raise model, charging just 2.9% of money raised.
  8. Crowdrise.com:  Crowdrise is a site for 501(c)(3) charities to raise money, with the novelty being that anyone can sign up to volunteer to launch a fundraising campaign for a charity already registered on the site.  Everyone can instantly become a social entrepreneur for a cause they believe in.

 

Via Forbes at: http://www.forbes.com/sites/devinthorpe/2012/09/10/eight-crowdfunding-sites-for-social-entrepreneurs/

Actually, Congress’s original intent in 1982 for Rule 504 was to “set aside a clear and workable exemption for small issuers to be regulated by state blue sky requirements, but by the same token, to be subjected to federal anti-fraud provisions and civil liability provisions.” Rule 504 exemption is provided for almost any type of organization, including corporations, partnerships, trusts, or other entities. However, it is not applicable to companies already reporting to the SEC (subject to the ’34 Act) or investment companies.

You Cannot Exceed $1 Million
The total offering amount under Rule 504 can be up to $1 million in a 12-month period, less the aggregate offering of all securities sold within 12 months before the start of a 504 offering. So, if a company has raised $100,000 in private money in the previous 12 months, it can still raise up to $900,000 without being accused of breaking the rules, or integration.

Generally speaking, there are no specific disclosure requirements under Rule 504 (disclosing what the company is about, what it intends to do, or who is connected with it). This means that, theoretically, an issuer can have a purchaser sign a subscription agreement and purchase stock without any information about the company being disclosed. However, the rule is dependent on the blue-sky laws of each state in which the securities are offered. This means that if a state’s blue-sky rules require disclosure, it must be provided regardless of Rule 504.

Rule 504 also provides that at least $500,000 of securities must be sold pursuant to a registration under a state’s securities law. Consequently, an offer must comply with the blue-sky laws of each individual state in which it is offered. In many states, this negates the effective simplicity of Rule 504 and the federal government’s intent, because many states’ blue-sky laws are more restrictive than Reg D.

A word of caution to the entrepreneur–regardless of the amount of disclosure the issuer is willing to provide, Rule 504 does not dismiss the issuer from the federal requirements, nor is there an exemption from the fraud provisions, including the areas of material omissions or misstatements. The penalties for noncompliance are severe, including monetary fines and mandatory jail sentences.

Number of Investors
With its limited disclosure requirements, Rule 504 also allows an issuer to sell securities to an unlimited number of investors. Theoretically, a company could raise $1 million by selling its stock at a penny a share to 100 million different investors. Obviously, the economics are not too attractive, but there’s no rule that stops an issuer from selling $500 blocks of stock to 2000 investors.
Rule 504 is the only rule under Reg D that permits an unlimited number of investors. A final note on Rule 504 is that the exemption provides for sales of securities of either debt or equity. This opens the door for combinations of both via convertible debentures. By way of explanation, convertible debentures are a debt issue (debenture) that is convertible to a preferred or, most commonly, common stock at some future date, usually at a predetermined price.

Alternate Exemptions
There are several other rules and exemptions besides the Reg D exemption discussed above. They are worth looking into and are discussed below under the headings of Regulation A and the Small Corporate Offering Registration (SCOR).
As pointed out in the last section, the principal advantage of an exemption from registration is that the buy-and-sell transactions can take place as soon as the parties decide to proceed. It eliminates the necessity of preparing and filing a prospectus with the SEC, and it saves legal costs, plus accounting and registration fees.
Exemptions under the Securities Act of 1933 (’33 Act) are listed as exempted securities and exempted transactions. They can save both time and money. The only drawback is they can take a legal genius to interpret them. They’re full of loopholes, and the courts have shown no qualms about ruling against the entrepreneur in their interpretations. Regardless, the end results should make them worth pursuing. But since the whole area of exemptions is so complex, the entrepreneur should not proceed without first seeking the advice of qualified legal counsel to determine the best form of exemption to applyThere are only two ways to legally
raise capital in the U. S.

Raising capital is a little like fishing. We must deal with two factors: The known and the unknown.

1.     We know there are fish in the sea; and we know they eat. We know there are investors in the world and that they invest.

2.     What we do not know is: “Will they invest in your company.”

Approaching Investors before you are ready can spoil the only chance you may get. Below is a list of the fundamental documentation an investor will look for in a company. Professional Investors look at dozens of business plans every week, and if your proposal does not include the information below, it is unlikely they will be interested.

1.       The Pitch

When you are ready to meet the investors, you will need to have an “Elevator Pitch” ready. This is a carefully planned, straight to the point and well-practiced description about your company and your goals that your mother should be able to understand and can be delivered in the time it would take to ride up an elevator.

2.       The Executive Summary

An Executive Summary is a summary of a business plan and is designed to give the reader a taste of what the project is all about. The Executive Summary must be a part of the Business Plan and the goal of the Executive Summary is simply to work as an appetizer having the reader wanting to read the entire Business Plan.

3.       The Business Plan

A business plan is the written fundament in any kind of business. It describes the vision, mission, objectives, and strategies. Equally the market it is in and its financial forecasts. It has many functions, including enabling an entrepreneur to systematically evaluate the feasibility of the project, measuring success and securing external funding. The Business Plan is an accurate summary of information on all important aspects of the proposed company, the markets and competitors; marketing and sales; board of directors, management team; and highly important; the Exit Plan.

4.       Accounts and Achievable Projections

For investors to make an informed decision of whether to invest in your business, obviously they want to know how much your company is expecting to make over the next three to five years. You should prepare some conservative financial projections for this purpose. Previous years’ accounts (if available) are also very useful to back up your projections and justify your valuation of the company.

5.       The Management Team

Investors will want to see a management team in place that is not only knowledgeable about the industry and product or service, but is also capable of successfully implementing the business plan and managing and controlling the company’s operations. They should have a track record of having been involved with similar projects and having worked for other companies in the industry. The strength of your team will decide how much money you will be able to attract.

6.       The Industry

The investor will expect you to comprehensive understanding of the industry you are in, including market size, demographics, trends, pricing strategies, accessibility, growth potential, demand for products and services, and commitment to business development. Having a degree on the subject or industry is always helpful.

The more you know – the more convincing to the Investor.

7.       The Offering

The first line in any Executive Summary or Business Plan is to give a clear idea of how much of the equity you have on offer, against what money and how much you expect the investor to make. Angel investors usually take equity in the companies they join. The amount of equity they take will depend on several factors, including the amount of capital required, the level of risk and the maturity of the company. Companies who are already profitable will have to give away less equity than a pre-sales company.

Because angel investing is so high risk, the investors’ equity stake and estimated return on investment should reflect this. Angels are usually looking for businesses that have the potential to return at least ten times their original investment within a five year period.

8. Time and Money already Invested

A breakdown of how much money has already been invested in the business will give the investor confidence. If you have invested any of your own money in the venture or have obtained bank or government funding will always strengthen your case. They will also want to know what this money has been spent on and what you managed to achieve with it.

9. Use of new Funds

Investors will want to know how their money will be spent. They might even be able to help you reduce your start-up or expansion costs. A good and well documented explanation is always very useful. You will have to be able to really convince the Investor of your needs.

10.     The Exit Strategy

Question number one for the Investor after having taken an interest in a project is “when can I have my money back?” Presenting a reliable and convincing plan of exit is crucial. The exit strategy section of your Business Plan should also outline your long-term plans for your business. Possible exit strategies to consider are:

  • Initial Public Offering
  • Merger/Acquisition
  • Buyout by partner in business
  • Franchise the business
  • Hand down the business to another family member

11.     How long will it take?

Finding money has always been difficult. However during time history shows that it varies a lot. However it is very much truth in the saying that a Good Project always finds money. It is wise thought to bear in mind that it can take time, much more time than expected. Therefore it is important to understand that patience and persistency is often what it takes to get success.

Having licensed transaction support from a real banking institution can ensure you are prepared and qualified for funding programs, find and select the right ones to achieve your goals. Private investment banking experts are ready to evaluate your current opportunities, help you avoid ineffective ones, and help close all real ones as fast and successfully as possible. This support is a short-term service to empower you to obtain practical tangible results, without waste, and much sooner, allowing bankers to navigate you through the labyrinth, already knowing the path to success.

Venture Capital International mainly forms a Joint Venture relation with companies that are in need of raising capital for projects. Then, Thomas Duffy and his team  goes out to hunt for the following strategic position.

When  start ups or expansion companies  using a Regulation D (17 CFR 230.501 et seq.) exemption do not have to register their securities and usually do not have to file reports with the SEC, they must file what’s known as a “Form D” after they first sell their securities. Form D is a brief notice that includes the names and addresses of the company’s executive officers and stock promoters, but contains little other information about the company.

 

One of the best things to do If you are thinking about Fundraising through a Regulation D offering, you should access the EDGAR database to determine whether your company has filed Form D.

Our U.S. Private Placement corporate service includes:

• Private Placement Memorandum

• Subscription Agreement

• Offering Circular

• Purchaser Questionnaire

• Financial Spreadsheet

• Tracking Spreadsheet

• Purchaser Representative Questionnaire

• Complete list of over 4,000 Angel, Private, and Venture capital investorsPRIVATE PLACEMENT SOLUTIONS service………………………………..US $11,900

(Document preparation & Consulting)

You should be able to adopt it to most any kind of business enterprise if your aim is to establish an early, most often pre-revenue valuation to a start-up that has potential of reaching over $20 million in revenues within five years:

An exemption to raise up to $1 million
No disclosure criteria
Few general solicitation and resale restrictions
No limit as to the number or type of investors
1. Produce a business plan and submit it to financial institutions, i. e. Venture Capitalists (a 1.5% national success rate); or

2. Sell securities (stock) to individual investors – (success rate much higher because it’s determined by you).

To legally sell securities you must create a
securities offering document compliant with
federal and state(s) securities laws.

1. Hire a team of independent accountants, attorneys, and investment bankers to create a securities offering document (very expensive); or

2. Hire us to do it, (reasonably expensive) or

3. Do it yourself, for a fraction of the normal cost (incredibly  inexpensive)

There are three ways to effectively sell securities.

1. Through SEC-registered broker/dealers (They won’t engage Start-Ups);

2. By the company’s management directly to investors – privately; or

3. By the company’s management directly to investors – publicly through a Regulation D 506 (accredited investors only); SCOR Offering; Regulation A or CA 1001.

Business Fundraising Package

  • Diagnostic/Consultation
  • Email Pitch
  • Featured Funding Request
  • 3 Month Site membership
  • Fundraising Plan
  • Business Plan Review
  • Pitch Deck Training
  • Pitch Deck Review
  • Targeted Funding Source Research
  • Targeted Funding Source Presentation

TOTAL PRICE: $5,000.00

  • Investor Ready

Contact 203-775-9999 or email tom@venturecapital-advisors.com

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