Venture Capitalists

Written by William Cate


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 botherrepparttar VC that none ofrepparttar 112483 potential stock buyers are buyers of your product or service. The axiom is that when investors recognizerepparttar 112484 name of your company, they'll buy your stock. It'srepparttar 112485 VC's stock, notrepparttar 112486 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 receiverepparttar 112487 proceeds fromrepparttar 112488 IPO, you won't haverepparttar 112489 money to expand your business. Ifrepparttar 112490 cash flow isn't adequate to payrepparttar 112491 IPO costs, expectrepparttar 112492 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 againstrepparttar 112493 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 contactrepparttar 112494 author: Visitrepparttar 112495 Beowulf Investments website: [http://home.earthlink.net/~beowulfinvestments/] Or, visitrepparttar 112496 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/]


The Economics of Real Deals

Written by William Cate


Continued from page 1

Inrepparttar OTCBB Market, P&D promotions are more complex that outlined above. However,repparttar 112482 costs and resulting net profit are as I've outlined above. So let's assume that you can make about $600,000 during three small P&Ds over about three years with your S&M deal. To make more money, you'll want to develop "a stable" of S&M companies. Over a seven year period, let's assume you can do three P&Ds on five companies. You'll make $3,000,000.

For years , I've argued thatrepparttar 112483 money is in doing one real OTCBB company. You start out with a company making money, if not a profit. You either createrepparttar 112484 company or buy it. If you are cash-strapped, you buy a turnaround. You take your cash-producing company public via spinoff. You forget that you have four million insider shares. You move your share price to $20/share. You use your strong share price to do a Private Placement financing. You use your strong share price to buy cash-producing assets. Over a 5-7 year period, you create a hundred-million-dollar company.

Fromrepparttar 112485 beginning, you've made your acquisitions to meetrepparttar 112486 needs of a major power in your industry. You've focused on overseas asset development because it costs less and is often more attractive to industry giant corporate buyers.

With a strong balance sheet and a $20 share price, you open discussions to do a friendly merger with that Industry Giant. As a public company, you let public investors know of your pending friendly merger at Market Capitalization (share price times issued shares). Your share price climbs to $40/share in anticipation of your pending merger.

You sell your 4 million shares at $40/share inrepparttar 112487 friendly merger. You make $160 million. You get your "Golden Parachute" as an officer or director ofrepparttar 112488 company. It's worth another $5 million to you. You net $165 million in about 7 years.

What makes more sense? You can make $3 million in 7 years doing Pumps & Dumps. You risk regulatory problems doing it. You'll lose your friends and business associates because you'll have defrauded them with your S&M deals. Some of your P&Ds will fail and cost you money. Or, you can create one real company. You'll make $165 million. You won't have to hide fromrepparttar 112489 SEC. Your friends and business associates will thank you for putting them into your stock.

It's your choice. If you choserepparttar 112490 real company strategy, I want to help you. If you preferrepparttar 112491 P&D strategy, please don't contact me.

To contactrepparttar 112492 author: Visitrepparttar 112493 Beowulf Investments website: [http://home.earthlink.net/~beowulfinvestments/] Or, visitrepparttar 112494 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/]


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