Continued from page 1
It costs money to do a successful IPO. You'll find that those VC Financial Managers will divert your advertising budget into general advertising that acquaints potential stock buyers with your company. It doesn't bother VC that none of potential stock buyers are buyers of your product or service. The axiom is that when investors recognize name of your company, they'll buy your stock. It's VC's stock, not company's product or service that is being sold.
It costs money to do an IPO. That money comes from your company's cash flow. Until you receive proceeds from IPO, you won't have money to expand your business. If cash flow isn't adequate to pay IPO costs, expect VC to issue more stock and dilute your ownership further.
You can invest in a search to find a Venture Capitalist. I don't think your VC strategy is sound. You are betting against odds that you'll find a VC. If you find a VC, you'll lose control of your company. When your company goes public, you could find that your insider group owns less than 15% of your company's stock. If you think that a VC strategy is a winning strategy, I wish you luck.
To contact author: Visit Beowulf Investments website: [http://home.earthlink.net/~beowulfinvestments/] Or, visit Global Village Investment Club Website: [http://home.earthlink.net/~beowulfinvestments/globalvillageinvestmentclubwelcome/]
He has been the Managing Director of Beowulf Investments [http://home.earthlink.net/~beowulfinvestments/] since 1981 and is the Executive Director of the Global Village Investment Club [http://home.earthlink.net/~beowulfinvestments/globalvillageinvestmentclubwelcome/]