I first became acquainted with Commonwealth Capital Advisors and their Financial Architect System™ in late 2003. At the time, I was a partner at a large general practice law firm [Bell, Boyd & Lloyd – Chicago] that had a substantial corporate practice. I was in the Intellectual Property Department. Inter-departmental cross selling was the watchword at the time, and I was often recruited by partners in our Corporate Department to develop Intellectual Property strategies for both newly formed star- up companies and established corporate clients.
Such was the case with Commonwealth Capital Advisors. One afternoon I received an invitation to meet a new client who had developed some software for structuring deals for raising capital. I was to assess their technology and determine whether it might be patentable. The new client was Commonwealth Capital Advisors, and that day I met Tim Hogan. In short order Tim launched into an enthusiastic description of Commonwealth Capital Advisor’s new Financial Architect System™. As is often the case with new inventors, Tim was exuberant. It was clear that he was excited about Commonwealth Capital Advisor’s new product and that he truly believed that Financial Architect® would revolutionize the way start-up companies and entrepreneurs raise capital.
Tim related how many small businesses and entrepreneurs are denied access to capital because they can’t pay the price of admission. Private offerings, debt issues, and other instruments for raising capital require the hands of professionals. The lawyer and accountant fees associated with preparing SEC filings, pro forma financial projections, and the like, can push the costs of obtaining funding well beyond the reach of many promising start-ups. The idea was to reduce the cost of raising capital by reducing the professional fees associated with developing a capitalization plan and preparing the supporting documentation to implement the plan by teaching entrepreneurs to do the heavy lifting themselves and providing them with tools to get the job done.
In the quintessential American spirit of self-help and do-it-yourself‑ism, why not teach entrepreneurs the basic strategies, deal structures for raising capital, and give them the tools to start the process themselves? With a little effort and the right tools, there is no reason why ambitious hardworking entrepreneurs cannot put together their own capitalization plans complete with all the necessary financials and other supporting documentation. Taking care of these preliminaries on the entrepreneur’s time rather than the lawyer or accountant’s time could save thousands of dollars, even tens of thousands of dollars in attorney and accountant fees. Tim was not advocating bypassing the services of professionals all together, merely starting the billable clock much later in the process. By minimizing professional fees, start-ups and small businesses have a better opportunity to gain access to sources of capital from which their very lack of capital would otherwise exclude them.
All told, Tim’s presentation was impressive. The basic premise appeared sound. Nonetheless, I was skeptical. I have worked with many, many inventors over the years. Most are enthusiastic about their ideas. Most are as enthusiastic as Tim was. Many inventors have very good ideas. Sometimes they have great ideas. Nevertheless, the task of turning a good idea into a tangible product or service that people will be willing to pay for is another thing entirely. Happily, my job does not require me to make judgments as to whether I think new inventions will sell or whether I think, they are “a good idea.” My job is to assess whether an invention is patentable, and if so prepare a patent application and shepherd it through the Patent Office.
My initial assessment with regard to Financial Architect® was that various aspects of the system did appear to be appropriate subject matter for a patent. I committed to preparing an application. Shortly thereafter I was supplied with all of the documentation and other resources that Commonwealth Capital Advisors had on hand to teach me about their invention. These included a draft copy of this book and the Securities Offering Document Production Template Modules of Financial Architect®. They proved to be the only resources I would need.
At this point in the story I should emphasize that I am not a finance person. I am a patent lawyer with an engineering background. Until I began working with Commonwealth Capital Advisors, my involvement with start-up companies had been limited to evaluating and protecting their intellectual property assets. Yet to prepare a patent application covering the novel aspects of Financial Architect® I had to become thoroughly acquainted with the ins and outs of capital formation and deal structuring, and all of the supporting documentation necessary to put together and implement an effective capitalization plan. Not only that, I had to learn these things quickly and on a budget.
The Secrets of Wall Street: Raising Capital for Start-Up and Early-Stage Companies and the document production template-modules, of Financial Architect® were the perfect vehicles for bringing me up to speed. Within days I was not only acquainted with the various deal structures and financial arrangements that may be employed in developing a capitalization plan, I was running different scenarios, creating alternate deal structures and hybrid capitalization plans, changing deal structures, and evaluating which scenarios and capitalization plans would be best for my start-up business and my potential investors. I was able to view how various deal structures played out over time. How they affected my bottom line. How they affected control of my company. (I speak in the first person here because I literally felt as though I was setting up a capitalization plan for my own future business.) In a very short time, I went from a financing neophyte without a clue, to a CEO with a plan. And not only did I have a plan, I had the pro forma financial projections compliant with GAAP [Generally Accepted Accounting Principles] standards to back it up!
Over the years I have worked with enough solo inventors and start-up companies to know that access to capital is the single greatest obstacle to bringing new ideas to market. Without adequate financial backing, even the most groundbreaking ideas will flounder. This book and Financial Architect® have the power to prevent that from happening. When entrepreneurs are aware of the options open to them, when they have the tools to put a realistic, well-thought-out capitalization plan together by themselves, the cost of accessing the capital markets is significantly reduced. Armed with the insights gained from this book and the tools provided by Financial Architect®, entrepreneurs can tap pools of capital that heretofore were beyond their means to even consider.
So if you have an idea, if you have a plan, if your business has everything it needs, except the financial resources necessary to put your plan into action, start reading. In short, order you will possess the knowledge and tools necessary to raise the capital you need to put your dreams into effect.
Jeffrey H. Canfield, Esq.
Brinks Hofer Gilson & Lione