Dear Fellow Entrepreneur,
Are you in need of substantial amounts of development or expansion capital? Are you having difficulty raising that capital from financial institutions? Would you be interested in legally and effectively going around those financial institutions directly to investors? By doing so, you are in complete control of the process and can use the capital as it is obtained. You set the terms of the deal not them. You maintain the vast majority of equity-ownership and voting control, not them.
Although we have access to many sources of capital for varying stages of a company’s existence, we, too, are looking to invest in early stage companies through our own venture-capital fund; Commonwealth Capital Income Fund – I.
We’ve been capitalizing start-up and early stage companies—exclusively since 1998. However, unlike other venture capital funds, or investment banks, we do not utilize outside investor capital, and therefore our fiduciary duty always rests with you, the entrepreneur. By federal securities laws, other venture capital funds or investment banks’ fiduciary duty always rests with the investor side of the equation, never yours.
When seeking the first few rounds of equity capital, too many founders sell too much of their company too early for too little. Many publicly traded micro-cap companies have fallen prey to this problem. They too can benefit from a PIPE using our process to recast the value of the company’s common voting equity, while raising substantial amounts of capital through a preferred equity offering because it’s all about the deal structure. As your venture capital partner, our job is to help position your company to obtain the necessary capital while you and your management team maintain the vast majority of equity-ownership interest and voting control.
As former Wall Street Investment Bankers and experts in compliance matters related to selling securities, as well as experts in crowdsourced incubation using critical corporate and social engineering standards, we are intimately familiar with the criteria employed by Wall Street and Corporate America looking to fund “quality deal flow.” Wall Street and Corporate America have an insatiable appetite for what is termed “quality deal flow” meaning companies worthy of investment or acquisition. Wall Street investment banks need quality later stage companies to take public on stock exchanges. Corporate America, primarily Fortune 500 Companies, need to acquire quality later-stage companies to harness outside innovation for continued growth. Our venture capital model is to supply that quality deal flow to both Wall Street and Corporate America.
Our process enables you to legally and effectively compete directly with traditional financial institutions for individual-investor capital. Furthermore, our process puts you in charge of the entire capital-raising effort throughout the life of your company. Our process will enable you to seek capital from one of our VC Funds directly and or attract qualified investors by conducting a series of well-orchestrated securities offerings to meet current market demand while maintaining compliance with federal and state(s) securities laws.
With us as your VC Partner, we’ll create hybrid securities for your firm, match other investors’ capital contribution ($500,000 maximum into 1-year Convertible Bridge Notes) and or produce convertible preferred stock and take them to SEC registered FINRA Member Broker-Dealers and Regulated Crowdfunding Portals, exclusively. With the advent of Title II under the JOBS Act of 2012, we can now introduce your company as a portfolio company of Commonwealth Capital Income Fund – I to accredited investors around the world, as well as strategic corporate investors.
In a market environment where banks rarely lend money to small businesses, selling securities, especially hybrid securities, such as; convertible bridge notes and convertible participating-preferred equity to raise capital for your Company is (without question) the most effective way to raise substantial amounts of capital while allowing you to maintain the vast majority of common-equity ownership and voting control. Thus, our process starts with developing a five-year capitalization plan by constructing pro forma financial projections that are GAAP compliant, assisting you in designing hybrid securities from the pro forma financial projections, and producing securities-offering document drafts (for legal counsel review) with marketable deal structures compliant with US federal and state(s) securities laws, rules, and regulations. Our process further assures the following: 1) you do not sell out too much of your Company too early…for too little; 2) your Company’s capital structure does not become cost prohibitive—by implementing rolling re-financing techniques; 3) you and your Company maintain compliance; and 4) you, your founders, and other management team members actually raise the capital you seek…on your terms.
The hybrid securities created normally include those with a “high-yield” component, convertibility, and participation in net earnings with a forward, non-dilutive lien position against assets, such as; convertible participating callable preferred equity. Correctly constructed, this type of preferred equity may further act as currency for acquiring competitors, suppliers, or other strategic assets. Yes, this type of preferred equity—positioned and constructed correctly—will enable you to use it as “currency” for acquisitions. Our portfolio companies also use the power of these hybrid securities—if they choose to list the securities on an exchange and become publicly traded—to raise substantial amounts of capital by selling them directly to “market makers” at discounts from par value or market price. Market makers seek the stability these types of securities provide and have plenty of capital to invest.
Selling any type of security to raise capital is like selling anything else, except selling securities takes place in a highly regulated environment. No matter how you attempt to raise capital, sending business plans to financial institutions or selling securities directly to individual, institutional or corporate investors it takes a significant amount of time, money, and effort to properly execute an ongoing, well-orchestrated marketing campaign. It does not matter if you currently have the available funding to implement such a campaign or not. What does matter is your management team has sufficient professional and personal contacts to raise, through the proposed securities offering, a small portion of the overall capital initially to fuel a continued effort.
Unlike other venture capital firms, we do not demand board seats or common equity ownership and voting control. We earn a small amount of the securities to be issued for operating or fund management companies. We do re-capture our production costs, but only when and if the capital is raised.
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(RESTRICTED ACCESS: Must be invited by a Commonwealth Capital Managing Director)