This is part two of a two-part video mini-series that provides an overview and description of the importance of executive summaries. This video, “Writing a Successful Financing-Focused Executive Summary-Part_2″ explains how to write a concise executive summary that attracts equity investors or helps you obtain debt financing. This video also explains why a concise executive summary (sometimes loosely known as an abbreviated business plan) can really help you achieve your financing goals and objectives.
Archive for the ‘raise capital’
Atlanta, GA (PRWEB) September 27, 2013
What is equity crowdfunding? What do I need to know before I use the intrastate exemption to raise capital for my business? How will the JOBS Act change the way startups and companies get funded?
Author Jonathan B. Wilson, an Atlanta business attorney, answers these questions and more in a well-documented yet surprisingly easy to read new eBook, Intrastate Crowdfunding: A guide for entrepreneurs and small businesses in Georgia who want to raise capital. The eBook is available for free download at crowdfunding portal SterlingFunder.com.
Divided into four concise chapters, the eBook provides anyone with an interest in using intrastate crowdfunding, such as the Invest Georgia Exemption, with substantive information, practical tips and excellent resources. While offering background on Regulation D, securities law, the JOBS Act and the Intrastate Georgia Exemption, the book steers clear of complicated language and gives straightforward and readable facts that clarify crowdfunding and its use.
“My hope in writing this book was to clear up some of the confusion about crowdfunding that is out there right now,” says author Wilson. “I want to give people clear information about crowdfunding and the JOBS Act and then show them some practical steps for using the Invest Georgia Exemption. I’ve been an entrepreneur and I wrote this book for entrepreneurs and business people, not lawyers.”
About SterlingFunder, LLC
SterlingFunder is an Atlanta-based equity and debt crowdfunding platform. In addition to facilitating national crowdfunding transactions, SterlingFunder is the nation’s only crowdfunding portal for non-accredited investors, under the Invest Georgia Exemption. SterlingFunder is accredited by CAPS and is also a member of the Crowdfunding Professional Association (CfPA) and Crowdfunding Intermediary Regulatory Advocates (CFIRA), two membership organizations working with regulation, reporting and compliance oversight of the crowdfunding industry. Please visit http://www.SterlingFunder.com for more information.
About the Author
Jonathan B. Wilson is a partner with the Atlanta, Georgia law firm of Taylor English Duma LLP where he represents businesses ranging from Fortune 500 companies to start-ups in corporate, securities and technology transactions. Wilson is a frequent writer and speaker on corporate finance and crowdfunding and is a member of the Crowdfund Intermediary Regulatory Advocates (http://www.cfira.org). He frequently blogs on the Manhattan Institute legal website http://www.PointOfLaw.com and has authored or contributed to many books.
Check out this limited time special offer. If you need financing for your business, this book provides you with the information and resources you need to obtain it, whether you are looking for debt or equity, bank loans or investors. The usual paperbook version is $24.95 and the ebook version is normally priced at $15.99. For two (2) days, now through 11:59 pm in your time zone, you can download the ebook for $0… in other words, for free!
Link to free download: http://www.amazon.com/dp/B00EK5SH1A
Here’s a testimonial about the book, from Amazon: “Author Tiffany Wright provides an amazing blueprint that any small or medium-sized business owner can use to get their company’s finances into excellent health. If you’re struggling with finding funds to finance your business, Wright’s practical advice provided in “Solving the Capital Equation: Financing for Small Business Owners” will help you. This book is written in such a way that anyone (whether you’re experienced in the financial industry or not), can understand it.”
Link to free download: http://www.amazon.com/dp/B00EK5SH1A
Interested in investing in a start-up or procuring angel investment? If you live in DC, you should check out the AVF. The 2012 Angel Venture Forum (AVF) Showcase is the largest gathering of active angel investors in the Mid-Atlantic region who meet, share and collaborate on 22 pre-screened business opportunities.
Next event: TUESDAY, OCTOBER 30, 2012 – POSTPONED DUE TO HURRICANE SANDY. NEW DATE TBD BUT WILL BE IN DECEMBER 2012.
7:30 am – 4:30 pm
National Press Club
529 14th Street
Washington, DC 20004
Tech and non-tech companies
John Backus, New Atlantic Ventures
Edward Barrientos, Brazen Careerist
Christian Bartley, Faleiro
Valerie Gaydos, Capital Growth, Inc.
Doug Humphrey, Serial Entrepreneur
Paul Silber, Blu Venture Investors
Tien Wong, Lore Systems
Following is a list of angel investors who participate in the Angel Venture Forum:
Bel Air Angel Investors
Blu Venture Investors
Blue Tree Allied Angels
Charlottesville Venture Group
Delaware Crossing Angels
Diamond State Ventures
Dingman Center Angels
Keiretsu Forum MidAtlantic
Investors Circle of York
Liquid Capital Group
Lancaster Angel Network
Mentor Capital Partners
Minority Angel Investor Network
Mid-Atlantic Angel Group (MAG Fund)
New York Angels
Pennsylvania Angel Network
Robin Hood Ventures
U.S. First Boston
Virginia Active Angel Network
William James Foundation
According to the SBA’s website, “The Small Business Investment Company (SBIC) Program works with private investment funds licensed as SBICs to provide growth capital to U.S. small businesses. Although SBICs regulated by SBA, they are private, profit-seeking investment companies that make independent investment decisions.”
The SBA publishes a detailed (if not well-structured) database/list of SBICs. According to this list, SBICs exist in 39 of the 50 states and in Puerto Rico. In the list, the following details are provided for each SBIC listed (this is quoted verbatim from the website, http://www.sba.gov/content/all-sbic-licensees-state):
“Preferred Investment Size: The amount the SBIC is willing to invest or loan.
Investment Policy: The type of investment the SBIC is willing to make (for example, loans, equity or debt with equity features).
Investment Type: The various stages of financing that the SBIC is willing to fund (for example, seed, start-up, early stage, expansion financing, later stage financing, or managed buyout, leveraged buyout or acquisition).
Industry Preference: Type of industry or industries the SBIC is interested in financing. Usually based on the knowledge and experience of the SBIC’s management.
Geographic Preference: The area of the United States where the SBIC prefers to make financing.”
Note that some of these will be blank or state $0. I presume that the entity has not provided that information or the information is not current and so is left blank.
“If you believe your business would be a good fit for SBIC financing, you should first research and identify existing SBICs that may be interested in financing your company. In choosing an SBIC, consider the type of investments it makes, stage of investments, industry focus and geographic concentration.”
As I’ve previously stated in pursuing private equity and venture capital firms, it’s best to try to get an introduction or referral to the SBIC(s) you think is a good match. This increases the likelihood that the SBIC will review your executive summary and want to see your business plan. If you’ve never done this before, it’s similar to job hunting. If you see a position that you think is a great fit, you try to mine your network to see if you can get someone who works at the company or who knows someone who works there to submit your resume, preferably directly to the hiring manager. If you think of the referral or introduction this way, the prospect does not seem so daunting.
If you don’t know any businesses that were funded by the SBIC or who interact with the SBIC, consider the professionals you or others in your network know. These are the CPAs, accounting firms, attorneys, and bankers who service small and medium businesses and their owners.
Finally, remember if you can’t find an entry, still submit an executive summary. Try to find a common link between you and the person you are submitting to such as alums of the same school, members of the same chamber of commerce or Rotary Club, kindred triathlon participants. You never know what may strike a chord and that’s better than going fully blind.
See below for a guest post regarding crowdfunding. This is a follow-on to my earlier post on the JOBS Act and crowdfunding. – Tiffany C. Wright
How To Crowdfund: 3 Essential Steps
By Cristian R Arrieta
I can’t help but continue to remain optimistic about the new possibilities for entrepreneurs with CROWDFUND INVESTING under the new JOBS ACT. Crowfunded start-ups could range across a spectrum of ventures from local shops and restaurateurs, to movie projects, to construction, to tech companies, and more. In an interesting twist to marketing plans, your best patrons are going to be your crowdfunding investors. Talk about brand loyalty! Communities can now invest in themselves and community members will share in the upside (be incentived to help prevent a downside).
Further, business start-ups and/or spinoffs rarely have the support of the banking or investment community these days. Money follows money, but how do you get the first round of investors to take the leap? Do an initial capital raise through a crowdfunded offering, and you now generate interest among angels, VC’s, and bankers, for follow-on capital. Lots of exciting stuff here, but also lots of regulations to learn and navigate, all of which are to be forthcoming during the remainder of this year before CROWDFUND PORTALS can be launched.
What we know already is that the JOBS Acts will require any business seeking crowdfunding (a.k.a. the “issuer”) to make certain disclosures about its business (though compared to public stock offerings, much less will be required). General disclosure requirements will include:
- The identity of the company’s board of directors, officers and current investors that hold more than 20% of the shares of the company;
- A description of the business;
- A business plan;
- Company financials (audited or unaudited depending on the size of the offering);
- Disclosures how the business will use the proceeds;
- The target offering amount;
- A description of the ownership and capital structure of the issuer; and
- Such other information as the SEC may require under rules it must prepare for the JOBS Act.
I expect that the anticipated funding portals will be ready for launch in accordance with forthcoming SEC regs by the second quarter of 2013. Meanwhile, with these general requirements in sight, you can start now on the compliance side.
1. FORM A WRITTEN BUSINESS PLAN.
Your written business plan will be the centerpiece under consideration for prospective investors. Not to mention it will be a required element for your crowdfund offering. If you don’t already have a written business plan, make this your first priority. If you do have one, then you need to hone it for the intended audience, i.e. the “crowd” of small investors whom you would ask to part with their hard-earned money to enter with you into the risk. A tremendous and often overlooked national resource is SCORE – pro bono advisors to help you start and/or grow a small business. Find your local chapter and schedule a meeting to go over your business plan today.
2. FORM YOUR TEAM.
In addition to the corporate directors and officers that will form the backbone of your corporation (see below), you will need a team of professional advisors and consultants. The professional makeup of your advisors will depend on the particulars of your business, but at a minimum, you will need a a business attorney and a business accountant.
3. FORM A CORPORATION.
To solicit crowdfunding you will need to identity of the company’s board of directors, officers and current investors that hold more than 20% of the shares of the company. This means that step one is to form a corporation and appoint a board of directors. Now place yourself in the shoes of prospective investors. What do you expect they will be looking for in terms of the makeup of the board of directors? How about the officers of the corporation? You will need to appoint a CEO, a CFO and a Secretary at a minimum. Who can fill these shoes in a way that attracts investment? Lastly, much thought will need to go into how the corporation is initially capitalized. Again, from the perspective of a prospective investor, would you invest in a company in which the founder has no skin in the game? Be prepared to disclose a description of the ownership and capital structure of the corporation.
The opportunities presented by the CROWDFUND ACT are exciting, and I sense that a new wave of entrepreneurship will result. I suggest that you get ready to ride the wave by starting now on the compliance side so you can begin crowdfunding your business next year.
Cristian R. Arrieta concentrates his law practice on estate planning and business law, with particular emphasis on inheritance litigation. For more resources or to contact Cristian R. Arrieta, check out http://venturacountylawyer.com.
Article Source: http://EzineArticles.com/?expert=Cristian_R_Arrieta
How can the JOBS Act help you with your business, especially with regards to financing? The JOBS Act, which stands for Jumpstart Our Business Startups), is federal legislation that simplifies the process of raising capital for small businesses and startups. It is primarily the reduction in restrictions around who small, private entities can tap that makes it that much easier for business owners to access capital. To do this, the act specifically addresses the use of online crowdfunding.
Until now small businesses could access financing from friends and family which includes acquaintances who know the owner and his/her/their business well. After that, for equity, small businesses typically pursue angel investment. Angel investors must be accredited investors. An accredited investor has an annual income of $200,000 or has a net worth of $1.0 million. You can see how this would narrow the pool of potential investors? (Note: There are other existing ways to access capital from people who aren’t friends or family or accredited investors, but that’s a topic for another day. Refer to some of my past postings on Direct Public Offerings including http://www.cash4impact.com/small-business-financing/tap-your-customers-via-direct-public-offerings-dpos/.)
With access now to crowdfunding, small businesses can tap individuals with less income and net worth…and less money to invest. With crowdfunding, instead of pursuing several investors with $50,000 to invest in order to raise your needed $200,000, you can pursue hundreds of investors with $1,000 – $10,000 (or even less) to invest. What you lack in investment size, you can make up in volume. Of course now the pitch becomes more of a road show type sales job instead of a targeted investor pitch.
Please note that, although the bill became law in April, the SEC has 270 days to add additional regulation so some of the rules governing what can and can’t be done may change.
If you wish to take advantage of this expanded source of funding, check out some of the crowdfunding websites including MicroVentures (http://www.microventures.com), AngelList (https://angel.co/), Crowdfunder (http://www.crowdfunder.com/). For a different tact and to access a few well-written (in my humble estimation) whitepapers on the JOBS act and funding subject, check out the Sharespost website.
According to the Sharespost website: “The Jump-start Our Business Start-ups Act enables companies to optimize their growth in the pre-IPO phase. Now, companies can fully harness the strength of the private capital markets for primary and secondary capital with greater ease and control. SharesPost provides a full range of services to help private companies take advantage of these new–and powerful–capital markets.”
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Most of the time I write about small business owners and the search for business expansion capital. How to get it, where to get it, why you need it, when you need it, who has it. But occasionally I take the viewpoint of the other side. What is an investor looking for? Why would a banker want to lend to one company vs. another?
Well, today I am talking to small business investors. Those of you who are seeking investment may be interested because it’s always advantageous to understand the viewpoint of the other person on the opposite side of the negotiating table.
As a small business investor, how do you locate businesses to invest in?
Here are my list of five options for small business investors seeking companies to invest in:
- Angel investment associations. These are excellent groups to join if you have at least $25,000 to invest. True, there are some small business investment groups that require a minimum investment of a few thousand, but the typical angel investment group has higher minimums. In addition, you must typically be an accredited investor. Technology and biotech get most of the focus from angel investors but you can find a group that covers almost any industry – you just may not find that group in your city!
- Join LinkedIn groups. There are a number of groups or forums within LinkedIn that make it possible to connect directly with small businesses that are seeking investors. The list is too long to mention here (and I don’t want to show my bias or have any one list inundated with requests to join). You can search on industries, small business, entrepreneur, ventures, etc. to find groups that may be a good fit for you. Read the description of each group that comes up to help you decide. And remember, if you made the wrong choice, you can always remove yourself from the group!
- Small business networking groups. Look on craigslist or meetup or just ask around in your network. These groups exist in every city and most towns. This provides you with an opportunity to get to know the prospective individuals and the companies you may want to invest in, on a more intimate level. You meet on a weekly or monthly basis, depending on the group, which affords numerous opportunities to interact. If you are unsure or really relish the personal touch, this is one of your best options.
- Magazines and newspapers. Yes, I know everyone likes to talk about the demise of print, but it’s still here! Anyway, many magazines and newspapers are now publishing digital editions which you can read on your computer, iPad, Kindle or other digital reading device. The point is, that numerous companies get covered in the business press and some of those companies are seeking outside investors. Read your favorite business publication and see what small business investment opportunities you uncover.
- Matching websites. There are websites out there that purport to match companies seeking funding (or partners or other resources) to those wishing to provide it or seeking the complement. A number of them actually do. Just do a Google search on small business investors or entrepreneurs seeking funding or any other search string that’s appropriate for you.
These are just five options for locating small business investment opportunities that are a good fit for your investment dollars. Good luck!
Tuesday, May 1, 2012: WASHINGTON – The U.S. Small Business Administration is inviting experienced early stage investment fund managers to apply for licensing as Early Stage Innovation Funds as part of SBA’s Small Business Investment Company capital investment program.
Licensed Early Stage Innovation Funds can receive SBA-guaranteed funding to match their privately raised capital up to a maximum of $50 million. Early Stage Innovation Funds must invest at least 50 percent of their investment dollars in early stage small businesses.
“This initiative is intended to promote American innovation and job creation by encouraging private sector investment in early stage small businesses,” said SBA Administrator Karen Mills. “Early stage small businesses face difficult challenges accessing capital. At the same time, in this financial climate, venture capital funds are finding it difficult to raise money from institutional investors. By licensing and providing SBA financial backing to Early Stage Innovation Funds, we hope to expand entrepreneurs’ access to capital and encourage innovation as part of President Obama’s Start-Up America Initiative launched last year.”
As part of the Start-Up America Initiative, SBA intends to commit up to $1 billion in SBA guaranteed leverage over a five-year period to selected Early Stage Innovation Funds using its current program authorization.
High-growth potential, early stage companies commonly experience a gap in the availability of funding between $1 million and $4 million levels. This gap is often referred to in the venture capital industry as the “Valley of Death.” Since January 2006, less than 10 percent of all U.S. venture capital dollars went to seed funds investing at those levels, and 69 percent of those dollars went to just three states: California, Massachusetts, and New York.
The Early Stage Innovation Fund initiative will target this gap by licensing and guaranteeing leverage to funds focused on early/seed stage investments.
SBICs are privately-owned and managed investment firms that are licensed and regulated by SBA. SBICs use a combination of funds raised from private sources and money raised through the use of SBA guarantees to make equity and mezzanine capital investments in small businesses. There are nearly 300 SBICs with more than $17 billion in capital under management.
A final rule, effective April 27, 2012, was published in the Federal Register at http://www.gpo.gov/fdsys/pkg/FR-2012-04-27/pdf/2012-10120.pdf. It sets forth regulations for Early Stage Innovation Funds with respect to licensing, capital requirements, distributions, and capital impairment among other things.
More information on the Early Stage Innovation Fund initiative and the regulations governing these SBICs may be found at www.sba.gov/inv/earlystage.
For more information about the SBA’s Investment Division, SBIC program, Impact Investment Initiative and Early Stage Innovation Funds, go to www.sba.gov/INV. The web site offers much useful information including segments for: SBIC Applicants, SBIC Licensees, Private Partners & LPs, and Entrepreneurs & Small Business Owners. The site also includes useful SBIC forms, up-to-date news and reports, and detailed information and descriptions of the Impact Investment Initiative and Early Stage Innovation Fund.
Contact: Dennis Byrne (202) 205-6567
Internet Address: http://www.sba.gov/news