18 Oct Eating Your Seed Corn
Too many companies with little to no capital are willing to pay investment bankers sizable sums to provide capital advisory services for raising debt and equity–all with “best efforts” promises of an eventual pile of cash. It’s an example of betting on the come.
For small business and especially startups, this is foolhearty. Paying mid five figure checks for deck prep, list building and investor outreach is the perfect example of eating your own seed corn.
That is why we created a self-directed private offering system for Regulation D 506(c) private placements. The way it works is the following:
- The issuer brings his/her own investor materials (deck, business plan, PPM, Subscription Agreement, Term Sheet, etc.)
- We provide a deal instance in our multi-tenant deal CRM with access for six months to a year
- The deal instance is populated with thousands of accredited investors
- Issuers are able to email and call investors directly from the CRM, tracking all outreach to their potential investor prospects from a single system.
We charge a simple one-time fee which is tiered, depending on the length of time the issuer wants access and depending on how many accredited investor leads the issuer would like to see. We also charge a 1% success fee on any capital raised as a result of using the system.
Too many smaller and lower mid-market companies are unnecessarily eating their own seed corn.