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Rocket RideTM Using Venture Capital Financing for Unlimited Growth
Essential
for You Here is a list
of some of the essential financial tasks we do for our portfolio
companies, starting from the beginning of a start-up: 1. Negotiate
and draft an agreement with the promoters and principals of your
company -- one that will create lasting harmony. 2. Incorporate
your company or amend the existing articles of incorporation to
provide for the necessary and desirable elements of a public company,
e.g. large number of authorized shares, blank check preferred stock, a
class of stock that controls the board of directors, anti-takeover and
anti-greenmail provisions such as a staggered board of directors, and
the preclusion or interested parties from takeover decisions and a
broad latitude to the directors in considering offers. You know this
is a very sophisticated document -- one that builds a strong
foundation for the future and allows unlimited expansion. 3.
Prepare the opening minutes of the company. Prepare the By-laws of the
company. Prepare initial stock subscriptions for the company. 4.
Prepare the authorizing minutes and documents for (1) incentive stock
option plan, (2) executive bonus plan, and (3) employees stock
purchase plan. 5.
Prepare all employment agreements, including "golden
parachute" provisions in the event the company is merged or sold.
6.
Prepare shareholders agreements for corporate governance among the
promoters, including any buy-sell or escrow agreements. These
are designed to promote the harmony needed to give executive total
freedom to focus on their real goal -- unlimited expansion. 7. Help
design the company and company structure so that the company maximizes
its attractiveness to the investing public. After all, one wrong
detail can kill the deal -- experience in these matters counts. This
is not a short task. It is a matter of studying the current hot stocks
in the market and competing companies. It not only requires knowledge
of stocks, but also requires knowledge of how sophisticated investors
look at competitors in the industry, so we can position the company as
having the killer competitive strategy. 8.
Negotiate a strong price and create a purchase agreement for large
investors such as venture capitalists, along with a stock registration
rights agreement. Giving up control at this stage, or succumbing to
the temptation to accept money on bad terms can permanently stunt
company growth.
10.
Prepare a formal valuation of the company. This is the beginning of
the real sales job. Anyone can put a high value on a company. Can you
justify that value in the minds of some of the most experienced and
hard-boiled investors on Wall Street. You have to speak their language
better than they do. You have to live in their minds. 11.
Prepare financial projections, their assumptions and financial ratio
analysis. Again, will the projections stand up to acid scrutiny? 12.
Prepare the agreements between the company and its principals and
their companies. 13.
Prepare and circulate a questionnaire for the officers, directors and
control shareholders to prepare for a securities offering. Make
background checks on the principals. You would probably be surprised
at the black marks you can investors to overlook if they are presented
in the right way. But, if you miss something on the background check,
you are going to be very embarrassed when the investors find it. 14.
Prepare intellectual property agreements to protect the intangibles of
the company. 15.
Assist in re-drafting and editing two business plans for your company.
The first business plan is for external use such as for venture
capitalists and other large investors. The second business plan is for
internal use. Make sure that the external business plan (1) has all
the items required by professional venture capitalists, (2) is
readable, and (3) will sell them. Make sure that the internal business
plan is workable. 16.
Create a private placement memorandum that allows you to decide do our
seed capital funding (let's say $1 million) and another one for second
stage funding (for example, $10 million). The problem here is how to
write in legalese that satisfies the securities laws and protects the
company from suit and still sell without appearing to sell. We have
only seen one prospectus that we would admit was better than we can
do. It was done for one of the largest real estate investment trusts
in the county and the legal fee was in the millions. To do work this
good takes time and costs money. We can do other things with our time
that will make us lots of money. Is the company going to pay us enough
so that it is more rewarding for us to go through the 20 or so drafts
of a 100 page document that are needed to really knock the investors'
socks off? Will we be fairly compensated for the decades we spent
reading tens of thousands of documents and listening to endless
presentations? 17.
Create the necessary documents for the private placement memorandums,
including but not limited to: escrow agreement, subscription
agreements, investor questionnaire, consents for board of advisors,
accountants and others. 18.
Prepare the due diligence file and exhibits. Skillfully doing this can
really expedite the receipt of money. Most people don't even realize
they should. Most people haven't done the countless due diligence
inspections we have so they don't know what the investment banker is
looking for or what will attract or repel him. 19.
Research applicable state and federal securities laws. Prepare a
blue-sky memorandum. File all necessary forms with applicable state
securities regulators. Respond to and follow up on any comments and
changes until the offering is qualified. We know the path of least
resistance here and can save you months in some cases. 20.
Prepare and file Form D.
22.
Prepare minutes authorizing stock offerings. 23.
Prepare underwriters warrants and warrant agreement. 24.
Prepare a confidential memorandum to underwriters for broker-dealers
in the selling group. After hundreds of underwritings, we know what
syndicates will eat with great relish. 25.
Prepare a syndicate agreement, selected dealers agreement, and
underwriting agreement. 26.
Oversee the filing with the NASD on compensation, if necessary. 27.
Introduce the company to underwriters, brokers, venture capitalists,
money managers and private investors. How do you know what they will
buy? How do you know how to handle yourself in a presentation, or how
to prepare for a presentation. The presentation can be like mining for
gold for a novice. You can be inches away from the mother lode, still
miss it and come up empty.
29. Negotiate
and prepare an agreement between any venture capitalists and the
company. Prepare any necessary escrow agreement. Check the tax
consequences of receiving this stock and design accordingly. 30.
Prepare a sales presentation for Wall Street underwriters who will do
the IPO. Locate and evaluate underwriters, including their track
records. Negotiate the terms of the offering. Most companies have very
little know-how or experience and get a bad deal. After all, the
underwriter does this every day and the company only goes public once.
We can tell you know to get the best deal out of the underwriter
because we know the rules that govern him probably better then he
does. Prepare estimates of expenses. Prepare a pricing memorandum for
use in the negotiations. Negotiate and prepare a letter of intent with
the underwriter. Negotiate the spread and other underwriter
compensation. 31.
Choose an SEC accounting firm and negotiate an agreement with the
firm. 32.
Choose a financial printer for the IPO. Negotiate and sign a contract
with the printer. 33.
Choose a transfer agent. Negotiate and sign a contract with transfer
agent. 34.
Prepare and file an IPO on an appropriate form. Respond to
comments from the SEC and state securities regulators. Comply with
Blue Sky regulations and make filings. 35.
Create a lock-up agreement if necessary. 36.
Select a financial public relations company, negotiate and sign an
agreement with them. Assist in designing the financial public
relations campaign. 37.
Prepare the due diligence presentation. Drill management on the
presentation. 38.
Assist in developing the strategic plan for your company. Research the
market for your products and services.
40. Prepare
certain company agreements, such as the employment agreements and
confidentiality, non-compete agreements. 41. Introduce
the company to foreign sources of supply. 42. Handle
legal problems, research legal issues, handle attacks, set up a
security perimeter so the company is not cheated. So far we have
told you some of the benefits we can give you when you join with us,
some of the lines we can open to you when you join our team,
things we can do for you when you make us a part of your
business strategy, and as you continue to realize what this will
mean to our company and your stock in it, you will have to decide
whether you will make us a part of your efforts now to work on
this one project or decide to make us a part of your other
projects in the future, because we have found that people doing these
deals with us can find them addictive. You can feel compelled to
do it. Don't you find that this is the case with your deals and the
people, like us, that you find to be essential? You get a large
piece of stock. We would imagine, having done this type of thing
before, that after you make us a part of your strategy, you will
be pleasantly surprised to find that we will handle most of the grunt
work. This will free your time up for larger matters that concern the
directors, fund raising and fund raising presentations. In short, a
great burden will be taken off your time and you can make more money. If you want to
maximize the value of your stock, then you will understand both how
valuable being on our team is, the value of a shoulder-to-shoulder
effort and how right is for you now. Do you know what it is like,
right now when you believe so strongly that this deal is the right
deal for you and we are the right people to help you do it? You know,
like when it's so right that you all of a sudden come upon the
realization that you would make us a part of your strategy?
Then, as a result of that, you understand exactly how the picture of
what we can do together on this can stick in your mind.
To get you from start-up through seed money and venture capital to IPO fast! |
