photo credit: B.O.G.D.A.N.Question:
I’m an entrepreneur and have finished my business plan. I’m getting ready to raise $2 million for my startup real estate company – but a friend of mine said I should only talk to accredited investors. I’m not exactly sure what an accredited investor is and I don’t understand why I can’t talk to anybody I want to about investing in my company?
Answer:
The term, accredited investors, has to do with securities laws – both federal and state – and making sure you comply with the very onerous restrictions that go with the fundraising for your start up company. I’ll give you both the short and long answer to what an accredited investor is in a minute. But the first thing you need to know is that if you raising capital from angel (AKA private) investors, you will almost certainly need more than just a business plan. You need what’s known as a Reg D Private Placement Memorandum – PPM – in order to comply with federal and state securities laws. Continue reading ‘Startup Company – What Are Accredited Investors and Why Should I Only Raise Money From Them?’
photo credit: apesphere
Acquisition/Investment in Indian Companies by Foreign & Domestic Investors – Six Steps Mantra
Joint ventures, strategic alliances and acquisitions are the flavor of the day that enable fast growth focused companies to have rapid inorganic growth and expansion in new sectors. However, prior to engaging in a joint venture relationship or acquisition of an operating Indian company (“Investee company”), either by way of private placement, or secondary market, or subscription of substantial equity share capital, it is advisable for the Investor to carefully and stringently undertake the following six step mantra to avoid future surprises and heartburns:
(i) Due Diligence/Operations Audit: Extensive legal and financial due diligence of the Investee company is advisable to assess Investee company’s track record in compliance with Indian laws, statutory obligations and regulations applicable to it. The due diligence exercise (which usually takes between three (3) to four (4) weeks depending on availability of documents) not only enables the Investor to assess potential liabilities, evaluate unknown and potential, disclosed or undisclosed liabilities but also enables the Investor to assess the feasibility and viability of the proposed acquisition and rationalize enterprise valuation. If required, Investor can demand creation of an escrow account for safe deposit of a part of the acquisition cost, parked for an agreed period to mitigate against any future liabilities of the Investee company. Continue reading ‘Acquisition/Investment in Indian Companies by Foreign & Domestic Investors – Six Steps Mantra’
photo credit: teresawer
There has been a recent wave of websites and TV shows about people starting their own business and following that path from bright idea and individual entrepreneur to small business start-up and then potentially to multinational, depending on the product or service. But what kind of audience are they broadcasting to? Well, it turns out a lot of us Brits want to start up our own small business. According to Business Link, over 10 million of us would like to start up our own business at some point.
So the encouragement is there and let’s face it, a lot of us like to be the boss. However, the whole process is easier said than done. The people who took part in the survey were asked what the main obstacle to starting up their own company was. Many cited financial concerns, be it the current UK financial climate or perhaps their own overdrafts, mortgages and debts. How would they cope if they started, but couldn’t generate enough initial funding to keep it going? After all, they’ve got the idea, the business plan, the desire, and maybe even a few colleagues. But how do they find the right people? Continue reading ‘Finding Investors For Your Start Up Business Ideas’
photo credit: eyeliam
Recession is often defined as a state of the economy when the gross domestic product is very low. There is a need for income earners to be able to tell the difference between recession and expansion by watching the levels of their personal incomes. Some widely-embraced market indicators are very deceiving.
Sometimes you need to look no further than the trend of your own incomes as a business owner or even an employed person. Recession needs to be differentiated from expansion for the right business decisions to be made. Continue reading ‘Differentiating Between Recession and Expansion Using Income Levels Approach’
photo credit: A. www.viajar24h.com
If you are an inventor or an entrepreneur, obtaining venture capital funding is most likely a major concern for you and your business. During the dot com boom, venture capitalists were fueling the growth, research, and ventures of many new companies. Now that the dot com boom has cooled, those worried about obtaining venture capital for business startup may have a more difficult time securing funding for their budding business.
Venture capital money can come in many different forms. There are actually companies that specialize in researching new companies to invest in, in order to earn a modest return on their investors money. These companies receive thousands of requests for funding monthly and may decide to fund one to two small start-ups a month. Some venture capital companies specialize in specific projects such as real estate or a technology based company. Many large, corporate construction projects are funded via some sort of venture capital agreement. Continue reading ‘Obtaining Venture Capital For Business Startup’
photo credit: liqueneThe unraveling sub-prime mortgage market has spewed its wreckage across a vast cross section of the financial markets. Investors and lenders continue to smart from massive losses on investments and loans tied to this market. As some scramble to assess the implications of the sub-prime meltdown, many investors and lenders have either abandoned higher risk asset classes or are approaching them with great caution.
Residing in a far corner of the financing panoply is a financing vehicle known as venture lending. This form of financing is used by start-ups supported by venture capitalists as a means of funding working capital and equipment acquisitions. A less expensive form of financing than venture capital, start-ups use these loans to extend the runway between equity rounds and to avoid ownership dilution.
Venture lending is in the midst of a strong rebound that started in 2003. This segment is recovering from a sharp decline that followed the bursting of the ‘New Economy’ bubble earlier in the decade. During the late 1990s, prior to the bubble burst, equity investments in start-ups topped $100 billion. Continue reading ‘Will The Sub-Prime Debacle Derail Venture Lending?’
