What type of capital are you seeking and how can you prove now your eligible for it? If you can’t answer the first half of the question…you can’t answer the second half.
Do you mean asset-based lenders? (ABL) If so, what asset are you trying to monetize? Do you mean debt capital lenders? If so, what “skin in game” or collateral do you have to pledge against (LTV) loan to value? Looking for equity? Did you know there at least 24 types of equity funders? And equity always requires proof of securities.
What kind of security do you have? Is it registered? What exchange is it on? Did you know PPM’s have no trading value which is what professional block stock investors look for? The kind that can close in 2-3 weeks.
Are you looking for 1000’s of individual small-cap amateur investors like senior citizens to be contacted thru a telecom CRM center? Are you attempting to do a PPM or convertible debenture or EB-5 foreign investors campaign using telecom or algorithm marketing staff? Did you know that average campaign will take at least 2-6 months?
Or are you seeking just 1 or 2 institutional investors via a rolodex or those posted on this blogfeed? Did you know that angel investor groups focus is tech, R/E, & energy for all but 23% of their transactions? And they usually have demographic preference to their own backyard. The SBA reports the average cap for angel groups is only $250K.
Did you know ABL funding costs about 50% less than equity costs of 25% ROI on top of principal? And if “deferred” or “participating” equity clauses exist this ROI can go as high at 70%. If you have no skin in game and are seeking 100% capital be assured the average investors ownership expectation is 51%. Ownership and ROI issues are 2 different things. How about government agencies that cater to at least 3 types of film finance or some other industry?
Are you looking for “enamored” investors who’s only expectation is to party with celebs or professional investors who require an exit strategy and guaranteed profit? How about the few investors who’s priority is tax deductions? Or maybe they want tax-deductions in conjunction with profit margins. How about social concious investors like the P/E firm who recently withdrew it’s $144M from Wal-Mart due to history of labor, environmental, overcharging customers & other violations?
Or are you just looking for a Vegas gambler? Let’s pull the 1-arm bandit and keep our fingers crossed of “winning” a return on investment (ROI). Maybe your just looking for “pledges” or donations of $25 from 1000’s of people via “Crowdfunding” that is a parody of a DPO or Direct Public Offering. Average donations raised is $10-30K for films and campaigns still average 9 weeks.
Being specific on your choice makes a VAST difference in the length of time to determine your eligibility, as well as, time & logistics to both attract and close on funding approval criteria. This and other factors will determine the DIRECTION & DURATION of a client’s IR campaign. Yes, all types of finance have approval criteria (except donations) and there is no such thing as “guaranteed” funding.
Remember: A numerical AMOUNT of capital is NOT a TYPE of capital.
BY SINCITYFINANCIER (This article was published on April 08, 2012 in the original source)