Posts Tagged ‘how to take your company public’
I consult in the turnaround sector with public companies on the Pinks, OTCBB, London Exchange, Frankfurt Exchange and every exchange in-between and everyone seems to have the same issue: there stock isn’t trading at the price they desire and they are dying to find a way to fix the problems that are hindering their trade. It usually comes down to a few basic elements. Use each of these elements with caution as this industry is full of predatory organizations and consultants and can be dangerous to amateurs. If you’re a newbie, that’s ok. Do what you can but know when you are in over your head and turn the remaining process over to people that swim with sharks for a living.
Public company structuring and turnaround strategies typically center around the elements of: corporate publicity, individual executive publicity, lack of an experienced publicist, lack of strategic alliances and lack of the proper promotion that is conducive to getting stock investors to pull the trigger.
Corporate publicity can be broken down into the immediate and ongoing use of: press releases, viral marketing video and article submission, corporate blogs, investor relations, market maker or broker dealer that is affective and of course the almighty strategic alliances that build hype and build power behind your brand.
Another major component that most companies are lacking is ‘Individual Executive Publicity’ by use of press release, viral market: video uploads with interviews and how to type material, article submission and personal blogs that center around the particular industry genre issues. It is important to make each executive stand out like a beacon in the industry and to press the reality or create the reality that your executive staff is composed of the who’s who of your industry.
Next you’ll need a corporate publicist with a focus on getting your CEO, CFO and/or corporate executives on TV and radio panel discussions as industry authority as well as newspaper and magazine articles and interviews about your company and its executives.
Don’t forget the importance of ‘Strategic Partnerships’. Announce new partnerships with multiple press releases, photo ops and articles. Pick strategic partners that have name recognition or are about to be in the public eye to piggy back off of the publicity they are receiving.
If you are an OTCBB or Pink Sheets company email campaigns to stock Investors are a quick way to get a nice bump in exposure and stock price but too many of these campaigns done the wrong way can hurt your company so be careful. Your investor relations consultant should have you listed on multiple stock alert services that run ongoing back to back. And the last but not least, the old fashion snail mail ‘Direct mail to stock investors’ can be the added bang to your stock price rising and stabilizing.
Turning around a company can and expensive proposition today but can increase your company’s value exponentially if done by an experienced professional. It’s a process that’s worth it to companies with an eye toward longevity.
Need A Corporate Consultant?, call Princeton Corporate Solutions at 267-233-0183We Can Transform Your Business
As a global corporate strategies firm we are beginning to get many inquiries from foreign corporations that wish to take advantage of the rapid growth capabilities of trading stock in the US. Getting set up with a consulting firm that specializes in fund-raising mechanisms such as private placement memorandum, direct public offering and/or taking one’s company public on the OTCBB can help a foreign entity obtain virtually instant gratification of raising large amounts of capital in an expedient manner.
Chinese companies typically have similar questions and concerns when they contact us such as: How long does it take to go public? What are my options for raising capital with a US structure? Do I need to have an American corporation? How much equity should I give up to the public? Can I merge my Chinese company with my American company to strengthen the American corporation’s asset value? And How do we sell the stock to the public once we have a symbol and are ready to trade?
How long does it take to go public? To go public on the OTCBB you need to have a solid business plan and corporate structure, usually a pre-public round is done with a Private Placement Memorandum to offer discounted stock in return for equity seed capital that will fund the ‘go public process’. This process can take a few weeks to a few months, it all depends on the deal and what you’re offering the investors at this stage. Next you’ll want to do your third-party audit and your S1, after your audit is done and your S1 is filed you’ll enter into the ‘comments’ stage where the SEC is going back and forth with you or your lawyer or your consultant (whoever is helping you go public). The comments stage can be anywhere from a couple weeks to a few months, the more unorganized the company, the longer the audit and comments stage will take to complete. The average for an organized company with the audit and S1 prep done simultaneously is around 4 to 6+ months (the more unorganized the company the longer it takes).
What are my options for raising capital with a US structure? Raising capital in the US happens quicker than in other countries because of the vast wealth in North America and its position in the global market place. Invest-able deals are all in the eye of the investor. The challenge is getting in front of investors with a track record of investing in your particular industry genre.
Do I need to have an American corporation? Yes, to go public in the United States, you need to have an American corporation. This doesn’t necessarily mean that it has to become your primary corporation. You can use one corporation as your operational entity and one as a subsidiary but to strengthen and stabilize your share price you’ll need to eventually show growth and assets in your US entity.
How much equity should I give up to the public? This is a decision that will be made with your attorney and Board of Directors and the decision is based off of your company’s industry position, the value of empirical assets like equipment, contracts, patents, current foreign based share holders etc.
Can I merge my Chinese company with my American company to strengthen the American corporation’s asset value? Yes absolutely. This is the most popular technique to show current and future shareholders that your company will be a long term public player. The more asset ‘skin’ you are able to put in the game in the beginning the better for the longevity of your enterprise.
How do we sell the stock to the public once we have a symbol and are ready to trade? During your ‘going public’ process you’ll be attached to a market maker. The market maker, your consultant and your publicist (if you don’t have one your consultant will find one for you) will work together at all fronts to help you leverage your new public entity. Your publicist will have authors in newspapers and magazines do write-ups on your company as they help you label yourself globally as a new industry powerhouse, each of your executive team members will also have their own publicity strategies going as well so that your publicist can place them on expert TV and radio panels as industry experts which brings website visitation, new distribution opportunities, personal and corporate branding and investor confidence which is all conducive to an increase in your share price. All of this will bring call volume into your market maker while they are selling your stock to new contacts as well as calling on their established database of investors. The process is typically audited quarterly by your consultant to find dead weight or weaknesses and tighten everything up.
Using the public fundraising strategies based in the US is a wise decision to grow your business. Finding the right consultant is crucial. The right consultant can make or break your efforts to go public in the United States.
Foreign, Indian and Chinese Companies, Take Your Company Public, call Princeton Corporate Solutions at 267-233-0183Take Your Company Public the easy way!
Bypassing the blistering reality that banks aren’t making small or medium size business loans. Lines of credit are deal. Hard money predators are out in full force and legitimate funding sources are at an all time low. Companies can take the tried and tested route in hiring a consultant, structuring their company, building strategic alliances, creating a solid board of directors and then authoring the business plan and PPM for the initial raise but why would they when they have so many scammers telling them that they can easily raise the capital with a shelf corporation or reverse merger into a pink sheets public shell.
People in need of capital don’t want to be bothered with the reality the capital is not as easy to obtain as it once was. Entrepreneurs are seeking the quick and easy way out which typically turns out to be the route that ruins their company and depletes their cash flow.
The truth is that your company has to be constructed on the success and failures of your executive staff. These individuals are the lifeblood of your company and their contacts and experience is what will drive your company forward into ongoing self-perpetuating growth.
Don’t believe the hype when it comes to raising fast capital in the corporate realm. Don’t believe that a shelf corporation will do anything but make you and your company look like idiots and don’t think for a minute that there is any way to initiate your first round of capital without an SEC regulated Private Placement Memorandum.
Big brother is always watching and those who try to raise money without the proper structure always get burned. Why not step back, take a breath and start off your campaign to raise your first round of capital the right way with a private placement memorandum, then a direct public offering then move onto the public offering on the OTCBB.
Why not for a change, do things the correct way, using the structures that are conducive to actually raising capital the legitimate way as opposed to the fast and easy way.
The fast an easy way is often the wrong way and in the end there is no capital being raised at all, only headaches and lawsuits. Find a consultant with the experience of taking startup companies and expansion mode companies public.
Don’t waste time with the scammers. Raise capital the right way and you’ll never have to redo the process.
Foreign, Indian and Chinese Companies, Take Your Company Public, call Princeton Corporate Solutions at 267-233-0183Take Your Company Public the easy way!
Think back to just a few short years ago, banks were on a lending spree, corporate lines of credit were being issued in record volume and companies were able to raise equity and debt capital with reasonable ease; then came the banking crash which unfortunately brought on an entirely new group of scams preyed on the innocent and naive small business owner which damaged the economy that much more.
Scams such as platform based funding, banking instrument collateralized lending, shelf corporation scams and on and on. Fortunately there is a light at the end of the tunnel thanks to some of the venture capital and private equity industry’s talented global finance executives who have decided enough is enough.
Now entrepreneurs are seeing professional collective funding efforts put forth by these seasoned finance gurus in the form of online membership databases which possess some of the best kept secrets in the global funding markets. Many of these databases include finance companies and methods that have never been available to the public and were used for decades by VC professionals who were able to pull off funding miracles on behalf of clients and in return made hefty commissions.
Now, with these unique contacts being placed in database form they are now available to everyone and anyone who needs capital. Imaging going to one website, joining for a modest fee and getting access to thousands upon thousands of private investors, angel investors, venture capital firms, hard money lenders, private equity firms, aggressive hedge fund lenders, Asian and European finance, factoring and other wonderful and easily comprehensive options to acquire capital.
A few of these membership databases have even taken the next step to give the business owners the elements to promote their business in a way that will help them pass due diligence with ease. Some venture capital executives got so fed up with having a client with a great business model, solid infrastructure, exceptional board of directors and even money in the bank but the deal would die when the company went into the due diligence and offer phase that they actually paid programmers to design a download-able application that offers the entrepreneur easy yet extremely powerful publicity with the strength of an actual high end PR firm all at the click of a button, it’s truly amazing.
The economy may not be what it used to be but it has forced the evolution of certain aspects of the financial industry to be more small business and entrepreneur friendly. There is massive funding out there for your company if you take the time to look.
Do You Need Financing For Your Business? Do You Need Angel Investors, Private Investors or Venture Capital, then visit Angel Funding Project’s site and find the best Business Funding Sources In The Industry.
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.
Go Public With Your Company, call Princeton Corporate Solutions at 267-233-0183Take Your Company Public the easy way!
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!
For many professionals, entrepreneurs and business owners the current reality of their intercompany and inter industry promotion and prominence is a far cry from where they originally envisioned themselves to be. What is the factor that thrusts some people and companies forward in the professional sense and why are some straggling behind like desperate, obsolete room size computers in a hand held PC world?
Its actually quite simple and it all comes down to a decision… a decision to step up and dominate in a no holds barred, bare knuckle fight to the finish. You need to understand and be comfortable with the reality that not everyone will make it. Most of your colleagues and professional friends are not psychologically or professionally built to last, meaning, they are not willing to do ‘whatever it takes’ to get to that next level.
Here is how it’s done: First, decide on what you want, who you want to be and where you want to go in your career. Second, surround yourself with people that have the above characteristics your are seeking to acquire. Chances are, most of these characteristics will be spread out over several different people as opposed to one or two professional who demonstrate your future self so find 10+ people to become well associated with and begin to pattern them. Don’t just pattern the outward and obvious characteristics but absorb the aura of their overall presents (calm, cool, collect and maybe even arrogant and rude at times).
What are their hobbies and extracurricular interests as these interests are a contributing factor to who they have become. Next, make a decision! Make a decision to overcome any obstacles that stand in your way. Dump friends and associates who are not supportive as they will only hold you back. You should quickly sever ties with any and all counterproductive individuals and interests that keep you from achieving your goal. Next, every morning as you’re getting dressed, brushing your teeth you should also be putting on your psychological garb as well. Slip into the mindset of that person you want to be.
Put blinders on your eyes so there are no distractions. What you will find is that opportunities will seem to fall into your lap because you are willingly submerging yourself into a subculture that has worked for all of those around you who are living the dream that you will soon be part of.
As for domination, you will find that stepping into this new code of conduct and professional character you will begin to steamroll forward, yes some people will be crushed under the wheel of your progress but this is a natural part of evolution. Use the element of arrogance, not in an artificial way that is used by insecure people but in a form of self promotion. Begin to state your opinion on industry specific blogs.
Put out industry niche information videos on viral media sites. Bring internet surfers to your blogs and videos with social and news bookmarking links scattered all over the web. Brand yourself as the ‘god’ of your industry. Your opinion matters and after others see you opinions and concepts enough they will begin to see these ideas as the norm. They will feel that up until now they have been misinformed and uninformed and you are the person on the cutting edge of your industry. As you build momentum, whatever you do, do not stop! As you build traction of growing your own personal ‘brand’ and ‘subculture’ within the industry, this should only influence you to take it one step further with articles submitted to global, high PR article directories and press releases through various channels. This is just the beginning but you are on your way to absolute, industry domination!
Need A Corporate Consultant?, call Princeton Corporate Solutions at 267-233-0183We Can Transform Your Business
Where Are All The Good Investor Finder Services? Companies raising capital whether trying to get a loan, raise equity capital with a private placement memorandum or go public on the Pink Sheets, OTCBB or any other platform has no doubt been told to find a good investor finder. Sure there are multitudes of membership databases like ‘Angel Funding Project’, one of the industry’s largest and many others but where are the ‘investor finders’ that everyone’s CPA and CFO are talking about?
I’ll tell you where, they’ve discovered how valuable their portfolio of active investors actually is and they’ve teamed up with consultants that take companies public and they provide the 40 initial investors needed to qualify for a public offering and they also help supply the capital that the consultants need in order to facilitate the ‘going public’ process. They have gone from making $2,000 here and $10,000 there, to making $100,000 here and $500,000 there by getting involved in the ultra lucrative world of pre-IPO finance and technical facilitation.
They are going from the headaches of trying to get investors interested in placing money with a goofball who doesn’t think he needs a business plan or PPM to raise capital to getting the red carpet rolled out for them at every term by investment bankers, global broker dealers and companies that desperately want to go public but are working with minimal liquidity.
Quality investor finders are becoming more and more valuable as the economy declines in some regions and remains stagnant in others. Good investor finders no longer sell their services, instead clients and strategic partners must sell them on why they should break open their contact base on their behalf. As the global economy changes, new opportunities are popping up everywhere. Investor finders are being heavily lobbied by Chinese and Indian companies who want to merge their foreign corporation with a public American entity.
Any solid consulting firm can take a company public but few have the contacts to be truly considered full service. If you are interested in taking your company public and have a solid business model, find an IR consultant and sell them on your corporate strategy and if they take you on you’ll be raising capital with lightning speed.
Need Investor Finder Services?Go Public With Your Company, call Princeton Corporate Solutions at 267-233-0183Take Your Company Public the easy way!
