Pre IPO Investing – Pre IPO Investments – A Must Read

For diversified investors, the IPO is the holy grail of all investments. Why? Because of the higher yields involved with a company with a great concept that is about to step onto the scene and change the order of an industry. Many times the investors are able to take advantage of a deeply discounted stock price compared to the retail price available to the mainstream.

For those who have experienced the power of an IPO, the next natural stage is the Pre IPO. A Pre IPO investment a few months before the company is issued a trading symbol is the creme de la creme of all stock investments. Many times investors are offered warrants for discounted future offerings with the company; the stock is typically discounted deeply to the IPO price, which in turn is discounted to the retail price. The investment mechanism is typically done via Private Placement Memorandum using rule exemption 506 of Regulation D.

Investors should make sure that the PCAOB audit and S1 authoring are underway or completed before going into an investment. The company should offer potential investors a package which includes a solid business plan, PPM stating risks and a valuation from which the share price originates. The share price will come from the valuation, number of authorized shares, total amount of capital to be raise pre public etc.

Another deal aspect to pay close attention to before investing is the market creation process put in place by the company. A strong Investor Relations and publicity campaign is crucial to generating interest in an IPO and this strategy should be put in place during the company’s comments phase with the SEC (if it is an OTCBB listing the company is initiating).

A solid investor relations campaign will consist of, at a minimum, two press releases per week, phone room assistance to introduce the company to the broker and investment market, SEO campaign, iTunes company and industry position downloads for interested parties, webinars, investor newsletter as well as radio, TV and university expert panel interviews and other public interactions to make the public aware of the company, product/service and stock symbol.

The above is just a Pre IPO investor introduction to help seasoned investors with their due diligence process and portfolio diversification.

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Private Placement Memorandum authoring and the process of taking one’s company public are services that require extensive experience and the ability to look at a deal objectively and peripherally to evaluate all the angles to enhance the ability of the client to achieve funding in a timely manner.

Many times, when I’m hired to structure a company before funding, they will be under the impression that my evaluation is a mere formality and they are ready to go. Often I’m the bearer of bad news when I have to break it to the client that their company has more holes than Swiss cheese and 30 to 60 days away from starting the fund raising process.

They will often get a second and then third opinion and usually run into the same thing before they eventually find their way back to our firm. As they call around to consulting firms they perpetually experience the ‘hard sell’ by firms who ‘need’ the business because they lack the rewards and referrals that come with cultivating each client relationship because they take on and spit out deals so fast they hardly remember their client’s name during the transaction.

This mentality dominates the larger firms because of their gargantuan overhead while the boutique firms can take a more personal approach because they have a steady flow of business and referrals because they are not stressed about bringing in the next big deal so they can meet payroll and keep their lights on. The smaller companies that focus on turnaround consulting, private placement memorandum authoring, top tier business plan writing and taking companies public usually take a one on one approach to the consulting process and will rarely pressure clients to sign on because their phone is ringing off the hook with previous clients who want to hire them for the next stage in the evolution of their company’s growth.

This business is all about relationships. Ditch the consultant that applies the high pressure sales tactics and seek out the smaller, more personalized groups that don’t ‘need’ your business but will cultivate and value it.

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Investor Relations – Investor Relations Consultant – Investor Relations Strategy

I am constantly getting calls from CEOs of public companies whose stock has plummeted to the point of no rebound. When I ask them what promotional or investor relations strategies they have in place to support their per share price goal, there is always silence on the other end of the line. It’s shocking to me that a well pedigreed executive can move up through the corporate ranks from executive to VP and to CEO and not have a clue as to how to run a public company properly.

For executives reading this, you obviously are doing the necessary due diligence required to initiate a strategic plan and keep your volume trading. As a global strategies consultant, typically, by default, I have to take a company public in order for them to meet their growth requirements as designated by their board of directors.

If you are going public on the OTCBB (Over The Counter Bulletin Boards) for example, you’ll want to start general corporate branding pretty heavy when the S1 comments stage is completed. You’ll want to take advantage of viral media such as but not limited to: video, unique article submission, press releases, social and news bookmarking and don’t forget the Linkedin, Myspace, Facebook and Twitter. The collective combination of promotional genres in the above will give you the initial foundation to start your Investor Relations campaign post public.

Keep in mind you want to promote your company in a general fashion as opposed to stepping into a gray area which the SEC would consider outside of securities compliance. Next, about two weeks after your viral crusade has been initiated, phase two would be using traditional tactics for publicity, mainly TV, radio and inter industry periodicals. These promotional mediums should ring with the ‘expert’ theme. You’ll have your publicist solicit the editor, writer, journalist, etc and get you a seat on an expert panel to discuss the hot topics that have to do with your industry. It’s not a company advertisement, it’s better. You are demonstrating your high level of expertise and throughout the gig they are referring to you in name and as the CEO of XYZ Inc.

Now, after your market maker has filed form 211 and FINRA has issued a trading symbol, this is when the real work begins. Don’t hire an investor relations service, hire a full service IR strategies consultant. It may sound like the same thing but believe me, the difference is night and day. A strategist has a massive portfolio of contacts to create your market quick and get your stock trading. You don’t want pump and dump, email/newsletter promoters, if you hire one then you’re a chump and you deserve the failure that you’re sure to experience. You’ll be sucked into the black hole of no return faster than you can say pink sheets (By the way, if you’re going public don’t even waste your time with pink sheets. Serious investors will never buy and hold that Wild West stock).

The basic strategy your consultant will put in place will be a combination of phone room promotion to market makers and investors to announce your stock and give verbal presentations in a non pushy manner (with a phone room you just want to have a friendly voice that gives free information and then tell them to check out the stock and call their broker or you can introduce them to one but don’t hire a boiler room as that’s the kiss of death to any new public entity). Next you want to email announcements to your pre public investor base and industry insiders to get the hype machine going. Get people talking about your stock, potential acquisitions, your new product or service, a new strategic partner you’ve signed with, a new distribution channel, anything, just get them talking about you. You’ll also want to keep your viral and traditional publicity mechanisms in place. Write press releases announcing the above and have your consultant and/or publicist start pushing them to major journals, newspapers and high traffic blogs and websites and always make yourself available for comments and/or questions. With all of your promotional properties you must get in the habit of collecting email addresses and contact info and on a weekly basis a chunk of your advertising budget must go toward snail-mail post card promotion, phone call meet and greets and email updates.

The above is a very basic intro or Investor Relations 101 to help you start putting a strategy together or at the very least it will help you interview investor relations strategies consultants in an intelligent and informed manner.

Want to find out more about Taking Your Company Public, then visit Belvedere Global Strategies Corporation’s site on how to choose between a Reverse Merger or S1 Filing for the best results

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Take Your Company Public: Software Firms Can Raise Capital Fast!

Are you trying to raise capital for your start-up or corporation in expansion? Have you exhausted your traditional institutional sources and hedge fund contacts? Don’t lose hope just yet! First of all, take all those pamphlets and brochures from banks and other traditional lenders that are lying all over your desk and toss them in the trash…they are absolutely useless.

Banks don’t have your company’s best interest in mind as they are hardly even staying afloat in this economy. Today’s institutional financier isn’t qualified to run a bath let alone a bank. Don’t put your future in the untested hands of a 20 something knucklehead. After you’ve tossed all that useless info in the trash, clear your head and then look at your company and ask yourself a few tough questions: Is your company invest-able? Do you and your executive staff have a pedigree that investors deem as seasoned enough to take their money and make affective use of it and not lose it? What proprietary concepts/technology/patents do you have that give you a larger market share with the proper cash infusion? What is your current capital/debt situation?

If, after pondering these questions you’ve come to the conclusion you honestly, truly have something worth pursuing then the next step is to look at the reality that your company is worthy of a public offering. Stay away from Pink Sheets and be weary of reverse mergers and in reality your company won’t qualify for the NASDAQ so the quickest way to raise public capital is the OTCBB (over the counter bulletin boards).

OTCBB is an SEC regulated platform that has a solid investor following and market makers that can effectively promote your stock to rapidly raise capital. Don’t let these difficult economic times steal your dreams of corporate prosperity and personal growth.

If you have a solid business concept, there is a way to fund it. Look into the OTCBB, it’s your best bet for an inexpensive public offering with a direct path to long term funding.

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