I the client with alternatives to the reverse merger, as the Regulation D offering, direct public offering and private placement.
One way to ensure that the reverse merger will work is to purchase one hundred percent of the shares owned by the owner-shell, but that is no guarantee, because it could enlighten shares.
Proper Due diligence is a must, and you must immune to smooth talk salesmen.An alternative to a reverse merger is a direct public offering, DSB.
Direct public offerings are becoming increasingly popular as the shell prices are dimensions and companies are increasingly aware of the problems associated with reverse mergers.
And when a company is trying to secure the financing Direct Public Offerings preferable, a venture-capital investments, venture capital firms require a large part of the company and are not passive investors.
Venture investors will be very involved in the company and ensures that claims, which could adversely affect the success of the company, they can not give you enough time to in your business plan.
An IPO is probably not in question, because to convince you that your insurance company is the next Microsoft, or do you have a difficult time always someone to the IPO for you.
An IPO is expensive and time consuming and is the decision-making from the hands put it in the hands of underwriters.
A DSB aimed at affinity groups like employees, suppliers, distributors and customers. These groups are usually with the company and are loyal.
DPO & 39; offers are registered securities, which allow you to market the securities directly to the public. The Internet can use the securities to the market, but if your site is not a lot of traffic data, no one will know about your stock.
So that leaves affinity groups like your best source for the financing, unless you are a google and the search for investors.
As the big corporations continue to reduce their work force and the many talented people leave with the possibility of an unemployment check or at the beginning of their companies, we find that much of the job creation is left to small businesses.
These small businesses must find, for capital to expand or to occupy, small businesses have created more than 20 million jobs in the last 15 years, big business has been cut. If this creative force, the capital, which they are driving, the economy could be unknown.
DPO & 39; under the SCOR " " small companies to register and for the companies to under $ 25 million in revenue and have a capitalization (share market value) of less than $ 25 million dollars. It
By Direct Public Offering They are capital that is not cost you a monthly interest payment, and is a constant source of financing.
You is not to give a large part of the company to investors, venture capital requirement is a disproportionate amount. Private funding is always more expensive in terms of fairness and control.
As a public company can better negotiate future funding requirements, the companies and the use of stock for acquisitions. In a DPO application, you only need 2 years of audited financial statements as compared to 3 years for other applications.
All That sounds simple, but in reality it is not you need someone with experience in the hand and lead you through the process.
You must make sure that you are prepared for the commitment and preparation to devote the necessary time to this endeavor. Speak with your affinity groups on the possibilities of investing in your company that you an idea of who is a potential investor.
Keep updated records of their customers and friends in the community who may be contacted later. It may become necessary to acquire a mailing list if you medical laboratory products or companies would you know, some of the doctors in your town, but not all of them.
Stay in the planning stage and necessary step, as you prepare for your DPO, such as having a year of finances are examined, with a business plan drawn up and printed, so that it does not arise at all costs at a time.
Give us, so that we can begin planning together, the more prepared you are the less you have to rush after all everything done yesterday, but the process takes time.
Regulation D Offerings: This rule provides for an exemption from the requirement for the registration of Section 5 of the Securities Act of 1933. Such transactions are not covered by the anti-fraud or other civil liability provisions of the federal securities laws. (See my article on Regulation D (504).
Nothing in these rules is the need to comply with applicable state laws relating to the offer and sale of securities.
Rule 506: Provides an exemption for limited offers and sales without regardless of the dollar amount of emission. This offer is not only the number of accredited investors, but the nonaccredited investors is limited to 35. a description of accredited investors and nonaccredited see my article on Regulation D (504).
Rule 505 : Offers May Not more than $ 5000.000.00 US dollars less the total amount of securities sold during the preceding 12 months after the rule 504 or 505th This exemption limits the number of nonaccredited investors to 35, but has no investor sophistication.
Rule 504: Deals allows companies to increase to a maximum of $ 1000000.00 twelve months in a period, in accordance with Article 504, Article 505 and Article 3 of the Act, a company may only raise $ 500000.00 through the sale of securities to persons residing in the states Montana and Alaska, have no disclosure law. states, the disclosure law firms can increase to $ 1000000, .00.
Rule 504 has no mandatory disclosure requirements, no limit on the number of buyers. offering pursuant to Rule 504 are relatively easy to create , which reduces the cost and delay and has not require an underwriter.
Joseph Quinones, president of Genesis Corporate Advisors has been over 25 years in the securities industry. In 1992, he founded JDQ Financial Group, Inc. and proceeded to build do it from a man operation to the point where it employs Many traders, advised many clients and generated revenues in the millions.
For more information, please visit: www.genesiscorporateadvisors.com
For questions e-mail: josephquinones @ genesiscorporateadvisors. com
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