SpinoffsWritten by William Cate
Spinoffs By William Cate Published August 1999 [http://home.earthlink.net/~beowulfinvestments/] [http://home.earthlink.net/~beowulfinvestments/globalvillageinvestmentclubwelcome/] Doing a spinoff is ten times better than buying a shell. Your spinoff will be clean. You'll retain a higher percentage of your stock. It costs you less. If you doubt me, send me a self-addressed stamped envelope and I'll send you my spinoff articles from "Time" and "American Venture." I work with two public companies willing to spinoff private companies. 1. Company A will spinoff almost any sound company with competent and honest management. They'll consider a well-designed startup. They are my default solution for private companies seeking to buy a shell. The cost is $25,000 less payment by public company for your stock. You should add legal and accounting costs. I would recommend this company's auditors who usually charge less than $20,000 for their audit. I would recommend my California Securities Attorney who will want a $25,000 retainer against a $75,000 flat fee. This will bring your total costs to under $115,000. You'll be responsible for stock support and finding your Private Placement financing. 2. Company B is selective. They require that company have at least two million dollar gross revenues with at least five hundred thousand reinvested pretax profit. The company must have an international market for their product or service. They arrange up to a $10.4 million Offshore Private Placement financing for their clients. They'll pay your legal costs and your brokerage costs for Private Placement. They'll supply supplemental funds for your Stock Support Program. They want to be involved with your company for at least five years. They'll want a seat on your Board of Directors. You must be willing to pool and vault insider stock for five years. They charge $225,000 with a $60,000 retainer and 100,000 shares of your stock. It's a cost effective turnkey service for companies that meet their requirements.
| | Why Go Public?Written by William Cate
Why Go Public? By William Cate Published September 1999 [http://home.earthlink.net/~beowulfinvestments/] Or, visit Global Village Investment Club Website: [http://home.earthlink.net/~beowulfinvestments/globalvillageinvestmentclubwelcome/] It costs money. It takes time. If you try to do an IPO, your odds of completing it are about even. If you do average IPO on OTCBB, your million dollar costs will exceed money you can raise. If you go public you have to battle market manipulations. You must avoid Vulture Capitalists that will destroy you. Public company survival risks can be greater than for a private company. If your company is a stock scam, you run risk of facing criminal charges. The downside to being a public company appears to argue against taking public path. There are three primary reasons that require you to take your company public: 1. Without liquidity, investors won't risk their money on your company. If they can't sell stock, they won't invest in your company. The ONLY way to offer investors ability to sell your stock is to take your company public. 2. Stock is money. You can use your strong share price to acquire cash-producing assets for your company. This means you can grow a hundred million dollar company in less than five years rather than more than twenty years. 3. When you sell, you'll get twenty times more money for your public company than you would for your private company. Public companies sell at Market Capitalization. This is share price times issued shares. Private companies sell for between 80% and 150% of their pretax profit. Crunch numbers and you will ALWAYS get a bigger "Golden Parachute" owning a public company.
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