You might want to read up on Regulation D offerings if you are trying to raise money to start up. Usually you dont need to bring all the capital to the table, just show investors that you are committed to the project. People will probably not invest unless they will see some great returns later on though. Its been a really long time, but I seem to remember going public with a company runs at least $30k having a professional do it for you and even then, you might not get the money for your business. I dont remember if there is a limit on how much you can offer to a broker to sell the securities for you(like 5% of the total amount sold or something), but I do seem to remember there were all sorts of legal things with selling to out of state investors and something about only being able to sell to 35 investors that were non-accredited investors, but you can sell to an unlimited amount of accreditted investors. Thats all off the top of my head. Just google reg D rule 506 and that will give you more info.
to throw another thought out there. You know if you had some commitments for possible business this would look good. In the meantime, I would send an e mail to John Crudele at the ny post, he does answer his e mails. also, I would send an e mail to Mark Cuban and Cramer. I'm sure Cuban will reply, not sure about Cramer (what the heck, send one to Timmay Sykes). Point being, it doesn't cost any thing to do this and these guys know a lot of people and may be able to pass a long a few leads.
speaking of venture capital, I was watching that on bloomberg earlier today and came across this... http://www.secondmarket.com/ has anyone heard of that? Seems like they bridge the gap from private to public which is a process that takes 10 years usually. Don't know much about it but still looking into it.
The problem is that most young entrepreneurs are still looking in the rear-view mirror - back at 2000 era startups that produced nothing. Venture Capitalists on the whole are spending ZERO. Why? Because they basically have a cashflow problem, they figured back in 2000, the companies they funded could be flipped in 3-4 years worst case scneario, not 10... Most venture capitalists are also underwater, and they often try and pawn off their portfolio Companies to raise the perception that they aren't underwater. Facebook and such operate on zero capital.... their money is pumped into the business as a kind of shelter, but its not being used on the whole. It could be worth $50 trillion dollars and it would only eat up maybe $10 million a quarter. The people who really know there is a cash crunch in VC land are the VCs - who will never tell you or the john Q public reporter that the industry is as illiquid as a mortgage backed security. To wean yourself off this public Company diaspora, take a look at some successful private companies Koch Holding - global trading / conglomerate firm http://www.forbes.com/2008/11/03/la...es-biz-privates08-cx_sr_1103private_land.html
I'm curious as what you believe these are exactly. For example, have you amassed the skills of selling? Marketing? cash flow management? writing proposals? writing contracts? negotiating with vendors? What are these skills you speak of?
No , venture is the next level up the ladder of investors. Generally in the U.S. the ladder looks like this. Given this situation, not far removed from the OP if I'm reading it correctly. A man is a carpenter, has been building houses for a while as an employee, he wants to build some on his own and reap more benefits from his labor and accumulated knowledge. Without going into the ancillary problems of now being responsible for much more than the manual labor. He needs money. levels of financing: 1. Savings 2. Family and friends, pretty much anybody with little or no real biz knowledge that you can convince to lend you money. 3. Angel capital, experienced group or single investor with knowledge and wisdom in biz matters. Some of the pitches would make you wonder if we're all living on the same planet. 4.Venture capitalist, the sole goal here is to take the co. public at some point. Also known as vulture capitalist for a good reason. As ventures nothing is considered that is not up and running successfully and deemed to be a good vehicle for profit. There is some venture activity happening now but it's very focused. All of these levels invest because they want something back , not because they like you. Family and friends want a % on a loan or a piece of the biz. You may have to move from a single proprietorship to a general partnership, the general partner calling the shots and the lessor partners sharing in the P/L. Angel investors want a piece of the action and do their best to help the biz along so they can share in the buyout to the VC's. Venture will virtually take over the biz as their sole aim is take it public and do whatever that takes. They know what is required to work that deal. Original biz owners will be lucky to retain 10% of the stock and unless playing the game with no uncertain alacrity will lose control. The OPs' most likely outcome is to be used as an outsource point for his old co as they want to escape all the ancillary cost of labor that would then now fall on his shoulders. Does he know what a performance bond is and have a source. OP, a poster on this board, Bronks, is an iron worker. He lives in Hawaii or maybe back on mainland now. He started his own co I think similar to what you want to do after years in the biz of building hi rises. He's one of the good guys here. PM him. At any rate , best of luck to the OP, he has a learning curve now. It will only serve you better in life to go through it so just keep gathering info. Also, there's usually a level before the angels that is through a rotary club etc. that is free advice from retired people for locals. It's about learning and networking for you now.
I don't think so since you're a small company and just starting out it would be advisable to start as a limited company or a partnership..
If you do go for it, here's a few tips. Get an office, the cheapest one you can possibly find. Nothing says "I'm a brand-new, under-capitalized, one-man shop" like the wife answering your business phone with screaming kids in the background. Also, don't undervalue the ability to leave paperwork out in your own organizational method without it being "cleaned up" or getting peanut butter and jelly on contracts. I found a small office for $127 a month, my own locking door, even includes a cleaning lady to dust and vacuum. There's a deal out there for you. Find it. It will take longer and cost more than you expect. Even when I ran the numbers taking this into account, it took longer and cost more. Best to have a patient wife with a solid job and benefits. Have a little stash of cash that no one knows about. Just a couple hundred bucks. When things are darkest, it's amazingly refreshing to say fawk it, and sneak off to see a movie in the middle of the day. Or buy a six pack and sit by the river. Or a box of 22's and shoot pop cans. I never considered this to be rent money or food money or business money. Obv, if you make a habit of spending all your days at the movies or by the river or at the range, you're not going to be a success. But an occasional dose of blatant, guilty, procrastination does wonders for the soul. Be in excellent health. I have never met, nor even heard of, someone sickly starting a successful business. It takes a lot out of you. Best of luck!