Take Your Business Public: Don’t Do Anything Until Your Read This!
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 Turnaround Services or Investor Finder Services, call Princeton Corporate Solutions at 267-233-0183Take Your Company Public the easy way!
Professional Indemnity Insurance Market News 2010
The market changes in the Insurance industry will have a particular impact for those professions who carry Professional Indemnity Insurance in Australia. 2009 saw the signs of a returning hard market in all areas of insurance with numerous losses reported and profitability being offset by modest premium increases in 2009, with more predicted in the coming years. A JP Morgan report indicates a return of the hard market with fewer insurers out there and increased claims hiking premiums for Professional Indemnity Insurance with increases unseen since the 2001 market debacle.
Some industry news have emphasized the opinion that insurers will be forced to return to profitability after years of losses and falling premiums as they tried to compete in a soft market with global competitors. In recent times, a leading insurer AIG changed their name due to a public relations fiasco, which involved millions in bonuses paid out to representatives in areas believed to have incurred over 160 billion dollars in losses.
Effects of a hard market can be mitigated in some measure by competition from global insurers however profitability is a mandatory in the current economic climate even for international insurers and significant increases are assured in areas such as Professional Indemnity Insurance.
Last December, the Australian Securities and Investments Commission approved new guidelines for the FOS and in January, they took effect. Prior to this, complainants were only able to access FOS services to a maximum of 280,000. In January, the limit was raised to 500,000 the limit is raised also for clients of insurance brokers up from 100,000 to a maximum of 500,000. In addition, interest and penalties could be added to award amounts.
Therefore, those who rely on Professional Indemnity Insurance could certainly see rate increases related not only to increased risks and to potentially more expensive awards, but also almost certainly in response to pressure to offset losses in other areas. Fewer insurers are willing to take the risk and step into potentially shaky fields and this is predicted to result in markedly higher premiums, insurance being harder to obtain, and in general the insurers taking a stance to lower risk and increase profitability.
These changes in the insurance field are said to be by some, a return to financial responsibility and profitability, though the impact on those required to have Personal Indemnity Insurance may be further financial hardships and a struggle to retain or achieve profitability in already financial shaky times.
Soon there will be evidence on whether the market changes and increased premiums will benefit all, though the falling premiums for all insurance over the last several years have put the insurance industry and many insurers in an uncertain position.
Industry analysts are remaining quiet about the exact rate professionals can expect to see over the next few years but there is a reduction in capacity expected as well as premium rates and increases of up to 30% has been speculated as a possibility for insurances including Professional Indemnity Insurance.
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Take Your Company Public With A DPO (Direct Public Offering)
If you are considering going public you are coming from one of two positions: you are either coming from a position of liquidity where you have the capital to spend $200k to go public on the OTCBB or you are coming from a position of weakness and you don’t have liquidity.
For the former, going public is easy, find a consultant with a solid track record and take your company public, you’re ready to go. For those of you who are coming from a weakened position due to lack of capital you should strongly consider taking your company public with a DPO (direct public offering). Typically a DPO starts with a PPM (private placement memorandum) that breaks your company into shares and prepares it for the public eye. Form D is then filed and you’re then ready to start raising capital.
The only downside is, most companies have no one to invest in the PPM and their transaction is dead in the water. A DPO is an extremely powerful process which allows you to not only offer shares to your friends, family and professional contacts but you can also team up with an investor finder company that will contact their seed capital investor database to help you raise capital fast and easy if you are willing to sell seed stock at a discount before you go public.
Be prepared to pay a modest fee upfront as well as a small equity position as these investor finder services know full well that power that they possess with their database. If you successfully contract with a real, viable investor finder service, they will most likely want to be the consulting group that takes your company public as well. Be smart; sign on with them as they will have a vested interest in your success.
They will most likely communicate electronically with their database members via email. As interest by the investor group builds, you the company owner, will have to take over the closing as it is illegal for non licensed investor finder services to take over the closing and issuance of shares on behalf of your company.
Think of a DPO with an investor finder service as the golden tuna that can solve all of your problems in one swift movement. You can find these groups by going to your favorite search engine and typing in word combinations like “investor finder’” or “investor finder service”. You can team up with a solid investor finder service and they will take you all the way!
Want To Go Public With Your Company, call Princeton Corporate Solutions at 267-233-0183Take Your Company Public the easy way!
What Is A DPO (Direct Public Offering)?
A direct public offering is when a company raises capital by selling its shares directly to what is referred to as affinity groups, unlike an IPO which are sold by a broker dealer to its customers and the general public through other broker dealers who have customers interested in buying shares in the company.
In IPO’s you have a firm commitment underwriting, where the underwriters promise to purchase the securities for their own account if they can not sell them to customers.
Best-effort underwriting: The underwriters do not guarantee any specific number of shares to be sold, they merely act as brokers.
In an IPO the lead underwriter is referred to as the syndicate manager, he keeps the book and invites other broker dealers to join the syndicate. In a firm commitment underwriting, an underwriter’s agreement makes members liable for any unsold securities, regardless of how much of their allotment they sold. .
In a direct public offering the company sells the shares to affinity groups; who falls in this category? Customers, suppliers, distributors, friends, family, employees and other members of the community. In a direct public offering (DPO) the company places its shares in the hands of those people who are familiar with the company and know the company’s product and management, and are most likely to hold the shares longer because they feel comfortable with the company’s prospects for the future.
Direct public offerings are considerably less expensive than IPO’s and most effective for smaller offerings, for large offerings the sales staff and customer base of a broker dealer are usually necessary.
Since the affinity group is already familiar with the company and its practices it doesn’t put pressure on the company to change the way it does business, and will remain loyal to the company because of it’s presence in the community.
DPO’s are preferable to venture capital financing because it allows the present management to execute its business plan without outside interference. When a small company turns to a single large investor they tend to surrender the freedom to make all the decisions.
In a DPO like other methods of going public today audited financial statements are required. Unlike a reverse merger you choose your shareholders and you don’t have to deal with shady, unscrupulous shell owners.
Shell owners usually keep between 5-15% of the shares outstanding and are quick to liquidate, and they do not have an interest in the well being of the company’s share price. Even if you insert a stipulation in the contract that they can not sell for a year they will find a way of shorting the stock and destroying the share price.
This makes the DPO a preferable option even for companies that don’t need financing but would like to go public.
A DPO does not always require audited financials but if you plan on going public you will need them. So you must hire an auditing firm that is “peer review” or PCAOB.
If you wish to take your company public then you must file a form S-1 with the Securities and Exchange Commission and a form 211 must be filed with FINRA.
A DPO is an alternative to an IPO or Reverse Merger for a company wishing to go public or obtain financing; it allows the company owner(s) to call the shots instead of an underwriter or a shell owner.
Take Your Company Public, call Princeton Corporate Solutions at 267-233-0183Take Your Company Public the easy way!
How To Go Public: The Process
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.
Take Your Company Public, call Princeton Corporate Solutions at 267-233-0183Take Your Company Public the easy way!
The Anatomy of A Business Plan
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!
How To Find Accredited Investors!
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 fundraising efforts fast and easy.
Investor Finder Services, call Princeton Corporate Solutions at 267-233-0183Take Your Company Public the easy way!
Investor Finder Consultants: The Easiest Way For Raising Capital
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!
Are You Ready To Raise Capital for Your Company? Most Likely . . . You’re Not!
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 Consulting or Investor Finder Services, call Princeton Corporate Solutions at 267-233-0183Take Your Company Public the easy way!
Learn How You Can Get A Life Insurance 502
Life Insurance is an asset in the sense that it helps in supporting your family members financially even after your death. As a result, your family need not be financially dependent on anyone even in your absence because the insurance company will pay back the final sum assured to your family in the case of your unexpected death.
The first step to get a life insurance is to decide upon the insurance company, that you would like to go along with ? so start hunting and shopping around for the most reliable and consistent insurance companies. You can either take the help of your insurance agent, financial advisor, colleagues, friends, or relatives to arrive at a decision. Alternatively, you may also browse through the internet and find out for yourself about the best insurance companies and their hot deals.
It is always better to settle for trust-worthy and reliable insurance companies, with a more or less consistent growth curve, instead of opting for newbie companies, without a proven track record to back up their credence, so that you can be assured of your money?s security.
The different ways of getting a life insurance are mentioned below ?
It is commonly seen that people are totally clueless about which insurance company is the best in terms of stability and returns. They also have almost no idea about how much money they should invest into life insurance. Therefore, they tend to approach a licensed insurance advisor and seek his expert guidance regarding these important financial decisions. The agent listens to their case, studies their financial situation, conducts a detailed analysis, and then comes up with a sound foolproof insurance plan to meet their specific needs.
Many middle aged or older employees, who may be afflicted with a chronic disease or health disorder, find it difficult to pay the huge insurance premiums. This problem can be solved by obtaining a life insurance cover through the office. Usually, many offices offer group insurance plans for all their employees and the premium amounts vary from one age group to the other. The maximum insurance benefit that can be paid for by the office is about twice the basic salary of the individual. You can opt for the group insurance cover because the premium amounts are quite low compared to the premium that you would need to pay if you were to take a life insurance on your own.
Another very common way of obtaining a life insurance cover is to go online and shop around for a while. These insurance company websites contain several different useful tools that can be used to aid in calculating your premium amounts for a particular sum assured. You can simply conduct your research in the easiest and most accurate manner. In case you have no time to conduct all the research, then you can just register with an insurance brokerage company and allow them to do the research for you and provide you with information about the best life insurance plan for you.
Susan Reynolds is the webmaster for a leading South African Insurance Provider who specialises in Life Insurance.
