Raising Capital Privately – With Strategies You Can Take to The Bank.

Raising Capital Privately














Raising Capital Privately

Angel Investors | Private Equity Funding | Venture Capitalists

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Raising Capital PrivatelyFor most entrepreneurs, raising capital privately is their first introduction to navigating complex securities laws and subjecting their ideas to the scrutiny of investors. This is the time when sound advice can propel you quickly through uncharted territory.

Private Placement Memorandums (PPMs) – The Balancing Act Worth Getting Right
When raising capital privately, your offering memorandum is the disclosure document you must present to communicate the benefits for your business model – and warn potential investors of the risks inherent in your business. Failing to adequately disclose all the material risks and operating factors to potential investors can be a disaster in the making. Government regulators like the SEC and their state counterparts could require you to refund investors all of their money, as well as impose stiff penalties, fines and interest.

We help you trumpet the benefits of your business model while still accurately disclosing all risks. Our experience will guide you through identifying what aspects of your business are material, and how to accurately disclose them to potential investors using the right terminology for raising capital privately.

Click here to see our special packages on all the legal documents you need for your private placement.

Obtaining Favorable Financial Terms
You can obtain the best financial terms possible when raising capital privately through an understanding of funding terminology that only comes with experience. Financially sophisticated investors often use different language than startup executives – and we are here to ‘translate’. We stand with you to negotiate offering terms with:

  • Private investors
  • Investment bankers
  • Angels
  • Venture capitalists
  • Private equity funds

When representing the investors in private offerings, we can help them obtain terms in a deal that mitigate the inherent risks of the investment.

Assistance with Networking and Presentations – an Unexpected Bonus
There are certain value-added services we provide that our clients comment on as being an unusual – and welcome – benefit. Namely, assisting them with “pitches” to potential investors, and even locating investors to begin with. Read our article, “Finding Your Match

We are institutional "gatekeepers" to a number of investors and, where appropriate, we will introduce clients to those in our network. No matter where you find investors, how you present your opportunity to them is vital.

The competition for financing is fierce and the investment landscape for emerging companies is more difficult than ever. Showing up unprepared for an investor presentation is like going on a job interview in shorts and sandals. You cannot control an investor's preferences, but you can control how your company's information is presented. We help clients organize their presentation in a manner that investors expect.

SEC Matters – Crossing the Minefield of Securities Law
When selling securities in a private offering, follow the footsteps of those who have successfully navigated the regulations which are complex and, sometimes, counterintuitive. This is not an area of the law where companies (or investors) can afford to “play lawyer”. Even a small mistake in raising capital privately can have very significant, and long term, consequences. For example:

  • In most private offerings, a company cannot use advertisements, including any web postings, to distribute securities.
  • Issuers and investors can not pay commissions to persons making introductions to investors - unless that person is a registered broker.
  • In most cases, a company is forbidden from making offers to potential investors whose names they obtained from a purchased list.

In a securities offering, there is no such thing as an “inadvertent” error. One small mistake could contaminate an entire securities offering, costing thousands of dollars in fines, legal fees, and even prevent a company or investor from participating in future securities offerings. Read our article, “Accepting/Paying Finders Fees on Transactions”.

Private Offerings – Not Entirely Private
In today's regulatory environment, everything is scrutinized; the stakes are high and there is NO room for error. The penalties for incorrect or unlawful securities offerings are significant. The typical resolution is a “rescission offer”, giving all your investors the right to receive a refund of their entire investment – plus interest. Government agencies can levy fines, shareholders can sue you and you can be prosecuted criminally.

Cleaning up mistakes made in a securities offering is expensive, time consuming and can shut your business down. We not only protect our clients but educate them on how to offer securities so that they remain in compliance with federal and state securities laws.

Should anyone in your company commit an error, we also help clients resolve issues with state and federal regulators in an expedient and cost effective manner so they can get their companies back on track.

Run Your Business or Handle Deals – Can You Do Both?
Orchestrating the acceptance and tracking of investor's subscriptions in a private offering is time consuming and cumbersome. Contracts and questionnaires completed by investors need to be carefully scrutinized and tracked. Time spent on the administrative tasks of an offering is time spent away from what you do best – operating your business.

We help clients coordinate the acceptance of investments, keep investor lists organized and facilitate the closings in a seamless manner. Keep your business running while we handle the cumbersome administration of your funding deal.

“Paper” Deals Quickly to Avoid Lost Opportunity
Once the terms of funding are negotiated, it is vital to move quickly before conditions arise that might interfere with signing. We help clients "paper" the deal expediently and efficiently. This includes the drafting of:

  • Subscription agreements
  • Accredited investor questionnaires
  • Rights agreements
  • Preferred stock designations
  • Promissory notes
  • Security agreements
  • Warrants and options

We help you reduce the cost of preparation, and provide the documents you need to begin raising capital privately as quickly as possible.

Timely SEC Filings – Beating The Clock
Most private offerings of securities require filings with the SEC and/or state securities agencies according to rigid timelines. We help you prepare the documents that need to be filed and ensure that those filings are made within the time limits proscribed by law. It’s one more way we actively look after our client’s best interests.

To learn more about developing a strategy for raising capital privately, contact us today to discuss your choices for pursuing funding.

Learn the secrets that successful business owners know that help them raise more investment capital, faster and with greater success! Subscribe to our FREE 6-part streaming audio course "Handling VC Rejection: 4 Funding Alternatives When Venture Capital Proves Difficult". Visit www.AlternativeFundingStrategies.com for more information.

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