Go Public Young CFO, Go Public

Written by William Cate


Go Public Young CFO, Go Public By William Cate

Going West inrepparttar 1850s wasrepparttar 111692 American path to business success. It maderepparttar 111693 railroadsrepparttar 111694 dominant economic power in America inrepparttar 111695 19th Century. Going overseas wasrepparttar 111696 business success strategy after World War II. It led torepparttar 111697 US being an economic superpower inrepparttar 111698 20th Century. Inrepparttar 111699 21st Century, going public isrepparttar 111700 only road for companies that want to grow into multinational corporations and achieve business success.

Risk Capital and Private Placements

For Private Companies, Risk Capital is almost impossible to find. American Venture Capitalists are currently funding only one business plan in every ten thousand that they review.

The odds of a public company arranging a Private Placement are about one in one hundred. The reasons that a public company CFO can raise risk capital in this way are that investors in a public company can sell their shares and thus have liquidity in their investment, liquidity that is lacking in a private company investment. Also, since a public company's share price tends to trade well above its book value,repparttar 111701 public company investor gets leverage in thatrepparttar 111702 shares should be worth more thanrepparttar 111703 equity that they represent inrepparttar 111704 public company.

Spending Your Equity

Fromrepparttar 111705 CFO's (Chief Financial Officers) viewpoint selling discounted shares is a better deal forrepparttar 111706 public company than selling equity in a private company. Investors in a private company will expect at least 50% equity inrepparttar 111707 company for their money. To raiserepparttar 111708 same amount of money,repparttar 111709 CFO selling publicly traded shares usually gives up much less than ten percent ofrepparttar 111710 equity in his public company. Here's an example.

Let's assume that you arerepparttar 111711 CFO of a public company and want to raise one million dollars. The company's share price is ten dollars per share. Your public company has already issued five million shares of stock. You,repparttar 111712 CFO, arrange a million-dollar Private Placement at a 50% discount torepparttar 111713 share price (at $5/share). Your public company will issue 200,000 shares of new stock for its million dollar Private Placement. Your company gives up only 4% of its equity forrepparttar 111714 funding. Ifrepparttar 111715 company were private,repparttar 111716 million dollar private placement would costrepparttar 111717 company at least 50% of its equity! This is simple addition and subtraction. These figures cannot lie. Take your company public!

Your Company Shares Are MONEY.

A wise CFO realizes that a public company's shares are money. I will repeat this important point. Your public shares are money. They can be used to buy other cash producing companies.

Ifrepparttar 111718 shares trade at ten dollars,repparttar 111719 company is issuing ten-dollar bills and can issue millions of dollars of its currency. While shares won't buy food atrepparttar 111720 Supermarket nor pay your electric bill, they can be used to buy cash-producing assets for your public company. All major corporations do this as a regular activity.

By converting shares into cash producing assets, you are converting a currency with limited exchange potential into a currency issued by some Government. After all,repparttar 111721 private company you buy is making money in some Government issued currency. Usually,repparttar 111722 public company hasrepparttar 111723 right to convert all currencies it receives into free trading currencies likerepparttar 111724 Euro, US Dollar, etc. Using this strategy, you asrepparttar 111725 CFO can convert a private or public company grossing a million dollars a year into a public company grossing a hundred million dollars a year within a few years. Let me show you how.

CISCO Leadsrepparttar 111726 Way

CISCO Systems, a multi-billion dollar international corporation, built itself into a high tech powerhouse by using its shares to acquire private companies. Its formula was 75% shares and 25% cash.

Let's assume that your public company grosses one million dollars a year. Your pretax one million dollars a year with a 25% pretax profit. You agree to pay one million dollars forrepparttar 111727 private company. The payment will berepparttar 111728 CISCO 25% cash and 75% stock. Whilerepparttar 111729 purpose ofrepparttar 111730 acquisition is to increase revenues and profits forrepparttar 111731 combined companies, we’ll assume thatrepparttar 111732 private company integration with your public company doesn't enhance revenues or profits. Thus, next year's pre-tax profit of your combined companies be $500,000. The $250,000 pretax profit ofrepparttar 111733 acquired private company would offset your public company’s $250,000 cash outlayrepparttar 111734 previous year.

Home Loans SA – best tips

Written by Gino


Your home loan will most probably berepparttar biggest investment you’ll ever make, and you’ll want to be use to you’re makingrepparttar 111691 write choices before you decide to purchase your own home.

Firstly, one ofrepparttar 111692 most important points to consider when purchasing a home is its Location. The location of your new home will play a key role when it comes to applying for a home loan. In SA home loans are granted by many mortgage lenders subject to a property valuation.

The valuation is performed when you apply for your home loan, and it is used to calculaterepparttar 111693 home Loan - To- property Value ratio (LTV). The LTV is ratio betweenrepparttar 111694 home loan amount you're applying for andrepparttar 111695 value of your property.

Nearby schools, easy access to transport and safe and secure neighborhoods will ensure that your property value continues to increase, improvingrepparttar 111696 return on you investment.

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