A Primer On
To begin, we want to address “those that find you money.” We
know many of you have already been through
the painful exercise of having retained
“money finders” who have taken significant
fees up front and have produced no results
whatsoever for you. See Section II A in
Who is A “Broker” – anyone who fits into
these categories, must be licensed by the
NASD in order to be involved in your funding
process and take a fee for doing so.
They all tell you their system, process or
way is legal, compliant, blessed by legal
council, etc. and that they can introduce
you to the money (and take a fee for doing
so) bottom-line…unlicensed “Money Finders”
are illegal and they don’t work. Only two
entities can raise capital for you, those
who are licensed by the NASD, such as Broker
Dealers, Registered Financial Advisors, etc.
or the issuer themselves under the
Exemption (Section II[D]5) or Associated
Persons of an Issuer (Rule
3a4-1 Point 240.3a4-1 4(ii)A,B&C also
applies), period…end of discussion.
In order to be highly successful in raising
capital, it takes a process, time and a
certain amount of seed capital. There are
many minefields that need to be navigated
that involve securities regulation,
legalities, deal structures, & know how to
be successful in attracting investors.
When a perspective issuer is contemplating a
capital raise, some of the following
questions usually arise:
1) How much capital should I raise?
2) Of that amount, how much should be
raised in equity and how much in debt?
3) What structure is the most beneficial
structure for us & the investors?
4) Is my company the type of company in
which investors will be attracted?
5) Is my company in an emerging growth
space that will excite investors?
6) What are the exit strategies that
7) Is my company attractive enough to go
public and trade on a viable U.S. exchange?
8) Is my company strong enough to attract
a large buyer or institutional investor?
9) Who will sell the offering to the
investors & how will I find them?
10) What about SEC compliance; who
should draft the documents for my offering;
who will sell it?
Since most companies really need seed
capital equity initially, we will discuss
this process more thoroughly.
The SEC regulates the capital raising
process with an iron fist. There are
serious consequences for an issuer (your
company) if the process is not properly
followed. We are told all of the time,
that’s not the way my brother-in-law raised
his capital, and my attorney said it was ok
to do it this way. “They” whoever they are,
are most likely ill informed and if not a
securities attorney, don’t know all the
For instance, the SEC (as stated above) only
allows issuers to raise money one of two
1) They must raise money directly themselves
2) They must contract with a broker dealer
to have the broker dealer raise money for
Most issuers are uneducated & uninformed on
the process of raising money themselves
directly, or they do not know how to
structure their offering and/or find those
badly needed investors, nor are those
issuers strong enough or sophisticated
enough to attract a broker dealer to raise
money for them. Statistically, a start-up,
early-stage or small seasoned company only
has a 1.5% chance of attracting a broker
dealer to issue their securities. If they
are in the lucky 1.5% the cost is likely
$50K to $100K up front, 10% of the capital
raised and 10% of their common stock, and
they will likely lose control of their
company to investors.
OUR SUGGESTED PROCESS
1) We facilitate a capital raise with our
clients under the Issuer's Exemption which
allows them to take advantage of legally
compliant ways to promote the offering to
accredited investors. We shepherd our
client’s through the entire
capital raising process and unlock the
mystery of capitalizing a company or
2) We shepherd the client through this
exemption and our Wall Street Solutions
for Main Street Companies™
process, to position the company to be able
to attract a registered broker dealers or
market makers who can then raise additional
capital under a separate secondary offering
& take the company public.
We suggest this process because it clearly
allows issuers to obtain seed investors who
will allow them to obtain the best terms
that will minimize their dilution. This
procedure will enable the issuer to obtain
friendly capital and with proper
capitalization, the issuer will gain a
widely held shareholder base. With this
shareholder base, the issuer is now properly
positioned to attract a broker dealer or
marker makers who
will then finish the capitalization in the public
markets, which will support the deal because
those investors brought in will be trading
the issuers stock and add significant
We believe in order for an issuer to take
their deal forward, they need (Phase I) to
be involved in selling their own deal with
confidence, and if they can’t or are
unwilling to do so, they simply don’t
believe in their deal and investors wont
take them seriously.
HOW WE CAN HELP YOU
There are 2 phases clients must go through.
Self-Funding Capitalization System™
Included in our Self-Funding Capitalization
System™ are 12 essentials that enable an
issuer to raise capital quickly, inexpensively, and in compliance with
federal and state securities regulations. It
is what every entrepreneur needs to
successfully execute a capital raise - Click
the link above for detailed components.
When enough capital is raised into the company, we will now
position the issuer to engage a registered
broker dealer we can designate to the
process. It may be a broker dealer our firm
will own or an affiliated broker through our
wholesale relationships. Whichever broker
dealer we will designate to take the issuer
deal forward, keep in mind that we will then
drive our own investors (that have been
captured through our own advertising) to
that broker dealer to raise another
significant round of financing for our
clients deal. We will also place the
offering into our own
NetFund™ A Private Accredited Investor
Network which streamlines the investment
opportunity review process through our
exclusive and secure virtual deal space.
Our collaboration network automates &
simplifies our select opportunities for
accredited investors. In addition, we can
assist in arranging unsecured revolving bank
lines who will tandem the equity that is
brought into issuers company.
The principals in our firm also have years
of experience of taking companies public.
In certain cases, our firm may already have
ownership of a publicly traded vehicle of
which we will use to merge with your company
allowing your company now to trade quickly,
all with broker dealer sponsorship.
Regardless of how we are able to take a
client company public (with broker dealer
sponsorship), they will now have their
company positioned to attract the larger
institutional investors on their terms, not
the investor. This was made possible
because the issuer seeded their company
properly in the beginning with a widely held
shareholder base. It is this shareholder
base & proper capital structure that enables
the issuer to gain leverage in the public
We can also recommend the experts who will
keep you in compliance with the SEC and
Sarbanes Oxley (SOX). The costs are not as
bad as one may think if you have the right
team in place.
BENEFITS OF TRADING AS A PUBLIC COMPANY (Going
While there are additional costs &
disclosure that will be realized, the
benefits clearly outweigh the costs:
1) Access to substantial capital via institutional & retail
investors who otherwise would never had invested
2) Ability to still control a company even
after capital is raised on terms you set
3) Ability to acquire additional companies
with stock & realized earnings
4) Ability to attract key management &
A CONCEPT TO CONSIDER
The average PE multiple (Price Earnings) of
public companies trading today is 17.
Assume one raises enough capital to
generate $2 million in earnings - 17 times
$2 million earnings equals a company trading
at $34 million valuation.
If one can control 70% of a company trading
at $34 million ($2 million earnings), their
position would be worth $23.8 million not
including their ability to obtain salary,
bonuses, travel expenses and loans.
We can implement phase 1 and phase 2 and
successfully take clients through the whole
Most of our competitors charge significant
up-front fees for a similar process and
(Compare Typical Competitor Pricing Here).
Our Phase I
Self-Funding Capitalization System™
process is progressive and we only charge
for deliverables and marketing costs as
Once the issuer is funded to a certain
level, we will now be able to take them all
the way through the phase 2 level, possibly
through our own broker dealer (for select
Most competitors will not be able to
implement the Phase 1 & Phase 2 process at
the cost & flexibility we offer. Our
experience in both seeding companies and
taking those companies public with our
unique proprietary financial products will
surpass any competitors in the financial
services marketplace, if you can even find
We also have the ability to arrange
unsecured credit lines & bridge financing in
order for clients to go through the process
with us, if needed, and we will be happy to
explain to you what is required.
Note: For select clients, we can
facilitate a relationship with a Wall St.
Law firm for
Structured Financing. See details
the link herein for domestic
and international syndicated and structured
finance for projects requiring $10MM to
$2B. We have well-developed and proven
methods for organizing and
capital financing loans, including
structured collateral instruments and insurance bonds
from investors, cooperating banks and
international financial institutions, for
procurement of full capital funds with
favorable terms and rates.
Jim Nash - email: