“The truth is like poetry. Everyone says they appreciate it, but no one wants to hear it”
The purpose of our Corporate Engineering Conservatory™ is to enable and empower invited entrepreneurs to re-engineer their companies through proper corporate engineering standards to mitigate risk of investment, so we and our co-investor contacts will buy securities that your company issues. By mitigating operation, financial and regulatory-litigation risk, by creating the proper securities for investment and by passing our due diligence protocols through this process, you’ll be added to our VC Fund, Commonwealth Capital Income Fund-I. Once accepted into our VC Fund, you’ll be able to showcase your company and its securities offering to our co-investor contacts. The probability of raising substantial amounts of seed, development or expansion capital will be as high as it can be at that level. How can we make such a claim? We can because this is the critical Wall Street process, necessary for attracting both investment, as well as human capital.
The following stories are typical and problematic. These are the challenges and successes this book addresses.
Trevor, a newly hired apprentice in John and Steve’s start-up company, made haste as he nervously packed up the audio-visual equipment—Steve was about to launch into John once again how this all had been a complete waste of time. Lately, the tensions between the two men were becoming severe, palpable. John was clearly not in the mood to hear yet another lecture from Steve about the frustrations of “pounding the pavement,” seeking capital for their new company from venture capital and private-equity firms. Having spent his first twenty-three years as an US Air Force fighter pilot and hobby inventor, John had the discipline and tenacity (not to mention the intellectual prowess) to overcome almost any adversity. But his patience, too, was wearing thin. How many more false hopes and broken promises from these financial firms, which only sent “screeners” and never “decision makers” to these meetings, could he endure? After countless introductory and due-diligence meetings, they were exactly where they started five-and-a-half months ago—at square one. Having burnt through Steve’s inheritance and John’s savings, they were slowly going broke. Steve noticed something in John’s demeanor he was originally unaware of—a combination of fury with a much deeper pale of sadness (something was just not right). Was this slowly killing him? Steve decided to walk out of the room—the inevitable discussion of abandoning their dream could wait.
Since childhood, Sue and Margo had always known they would have a place in each other’s lives. Best friends and entrepreneurs since Girl Scouts—laughter and inventiveness fueled this friendship. Once again, the national economy forced them to strike out on their own—because working at a coffee shop was not their idea of full-time employment. Having received “good advice” from her brother, a doctor, Margo convinced Sue they should seek to raise $1,000,000 through a crowdfunding web portal—Title III of the Jobs Act of 2012 enabled entrepreneurs to raise money through general solicitation. They went to a crowdfunding seminar, which was conducted by someone who claimed to be a pro on the subject. The advertisement referred to him as an “expert” in crowdfunding. Obviously, he must be—right?
Exhilarated to find investors, they signed up on one of the more popular, crowdfunding web portals, posting their company’s business plan without the proper guidance from legal counsel. Things started off great. In five months, they raised an average of $117,000 per month and were very prudent on how they employed those funds. A few months later, they received news the web portal was seized by the SEC and seventeen state-securities administrators. Apparently, the regulators claimed the crowdfunding web portal Sue and Margo used was not properly registered. Further, because this portal enabled their client companies to simply post a business plan, the portal was charged with aiding and abetting fifty-seven companies in over 230 counts of various felonies—including securities fraud.
The SEC in turn seized the assets and forced liquidation of forty-three out of the fifty-seven companies, including Sue and Margo’s. Both women were banned from selling securities in the US for five years. Due to their lack of malice and intent, through plea-bargaining with the state and federal prosecutors, they survived any criminal convictions. Their investors, however, saw an open window to claim a breach of fiduciary duty on Sue and Margo’s part, citing lack of due diligence and proper legal counsel. This opened up their personal assets to attachment, voiding the limited-liability protection of their corporation. Their “American Dream” became a regulatory and litigation nightmare.
Darian and Kim’s social-media network had tens of thousands of followers and was growing daily. They just knew their first smart-phone application, would sell for ninety-nine cents to millions if they could only get it up and off the ground. They surmised they only needed $200,000 for launching their new company and releasing the application. Once this first app sold to the masses, they could create and sell more. They had tried the donation-based-crowdfunding platforms but only raised $11,454 in five months. Darian’s father, a CPA, suggested they speak with Ron, a good friend of his from college—a long-time SEC-enforcement attorney who now was running a private practice.
After their initial meeting with Ron, Kim and Darian were even more excited about the prospects of a successful venture, but realized just how much work was needed to prepare a business plan for Ron so he could produce the securities-offering documents. There’s lots of good news with Regulation Crowdfunding (aka Title III of the JOBS Act of 2012). An issuer of securities (the company seeking capital) through a Regulation Crowdfunding portal simply fills out Form C with the SEC before solicitation and sales can begin. The really good news is its being solicited to the general public. The bad news is an issuer of securities must use a crowdfunding portal exclusively [no other method of solicitation may be used] to offer and sell the securities. Even worse, they can only engage one crowdfunding portal to do so. That’s a lot of risk placing the ability to raise capital with one solitary effort and source. Regulation Crowdfunding also has a strict, relatively low, investment dollar limit per investor, thereby compounding that risk.
Although limited to a maximum offering amount of $5,000,000 per 12-month period, Regulation D – Rule 504 does not have a strict investment dollar limits per investor, so if one has friends, family, personal and professional contacts that would like to invest more than Regulation Crowdfunding allows, then they can simply invest using Regulation D – Rule 504 document.
Although the Regulation Crowdfunding Form C filed with the SEC doesn’t require a sophisticated securities-offering document, Ron though it wise to produce a securities-offering document under Regulation D – Rule 504 because it would enable Kim & Darian to retain two critical elements he recognized as very important. First, due to the higher level of disclosure, the securities-offering documents and elements of it in Form C would protect Kim and Darian against any claims of securities fraud. Second and more importantly, it would allow them to avoid the singular dependence on the performance of just a crowdfunding effort with only one crowdfunding portal, as they now could sell securities concurrently to their friends, family, personal and professional contacts (with no dollar limit per investor), as well. Yes, they would need these securities-offering documents to properly sell securities through a crowdfunding platform, under “Title III” or “Regulation Crowdfunding” by using the elements within the Regulation D – Rule 504 document to fill out Form C for the crowdfunding portal.
After researching successful securities offerings and the deal structures that made them so, they settled on a simple, three-year convertible-note structure to sell to investors. Ron suggested they move the size of the convertible-note offering to $1,000,000—just in case they needed more than originally thought. They could always close it early at a lesser amount, if necessary.
Once Ron was finished with their securities-offering documents he gave them the “thumbs-up.” He supplied them with a pdf copy of the Regulation D – Rule 504 document to send out to friends, family, personal and professional (pre-existing) investor contacts. Ron also gave them a MS Word copy to assist them in filling out (copy and pasting the elements in made easy) Form C with the SEC for the Crowdfunding effort. Darian and Kim used the business plan and disclosures in the Regulation D – Rule 504 document to fill out Form C with the SEC to qualify for Regulation Crowdfunding. Then they engaged a Crowdfunding portal to sell as much as it could, then went to work on selling the securities to friends, family, personal and professional (pre-existing) investor contacts under the exemption: Regulation D – Rule 504. Running with the “double-barreled shotgun” approach, they were able to further control the outcome and success of the capital-raising effort. Before engaging the crowdfunding portal and soliciting and selling securities under Regulation D – Rule 504 outside the crowdfunding portal, they obtained Ron’s blessing. (Early on in his college, business class, Darian learned an opinion of legal counsel is an affirmative defense in regulatory litigation.)
In addition, because they used Regulation D – Rule 504, Ron was easily and quickly able to file that document under their State’s Small Corporate Offering Registration (SCOR) allowing them to advertise the securities in their state and outside the crowdfunding portal. As some capital rolled in from friends and family, under SCOR they were able to advertise in the regional, financial publications. Although a little more expensive, that “triple-barreled shotgun” approach was highly effective. They learned quickly, when raising capital through public solicitation, using the general media, social media, and other means, you get what you pay for.
Ron oversaw all their regulatory requirements and was honored and excited to be a part of a real success story. Darian and Kim ended the offering early at $770,000; because they started to sell their app and unexpectedly received a significant, development contract from another company to design an app for them. Receiving outsourced app-design work was not part of their original business model; but after receiving support from their investor base, documented by Ron, they jumped at the opportunity. Funny how success breeds success!
Robert had met Kyle on the golf course at the invitation of his bother-in-law, Pete. Kyle, being a financial advisor for a large, New York investment bank and one of the leading advisors in the firm, was bored and quite frankly unfulfilled with his position in life. He used to say, “I often feel like a high-paid babysitter who shuffles paper and contributes nothing of any real value to society. I wish I had the passion of my youth in business and my life was an example to my kids.”
Robert, a savvy real estate investor and developer, had grown his business to the degree he could handle it with little effort. Having been fortunate to accrue some past successes in his field, by sharing some of the profits with his employees through an ESOP (employee stock-ownership plan), he was able to build a real estate-development firm successfully. His employees were loyal and took care of the company as if they owned it, which they kind of did, when Robert simply needed time to himself. He trusted them, as they did him. Trust…a lost commodity of sorts, he thought. He had choices—sometimes too many. He could either sell the company, continue as he had been, or expand to varying degrees. At fifty-five years old, what would Robert do if he sold it—continue as is? Sure, but he, too, was a bit bored. High achievers tend to get bored easily.
After the round of golf and over a couple of cold ones, Robert asked Kyle if he knew anything about how one would go about building a REIT (Real Estate Investment Trust). Kyle explained he knew enough to get in trouble but certainly could put Robert in touch with some experts in the field.
That was a little over five and a half years ago. Because the REIT concept was a completely new business model for Robert, it was structured as a start-up. That one, friendly question led to a dream come true for both of them. Robert was able to build a formidable real-estate empire from scratch in a niche market overlooked by the giant publicly traded REITs. Kyle came on as the new REIT management company’s CFO. He was the key in handling the securities-related aspects of building the firm. From individual investor contacts—through Kyle’s golden Rolodex, along with utilizing Title II of the JOBS Act of 2012 (aka Regulation D – Rule 506(c)) with broker-dealer engagements, as well as in-house securities sales effort and with continued, good investor relations—they had more investment capital than they could employ. The good news is, under Title II of the JOBS Act of 2012, they were able to solicit accredited investors (only) for an unlimited amount of capital and they didn’t need to use a crowdfunding portal exclusively, to do it. The only bad news is that they had to obtain 3rd party verification of each investor’s accreditation prior to accepting an investment. To them, it seemed like an easy enough process to stay in compliance…and it was.
“It was simply the next level for both of us. The timing was perfect—two, successful fellas bored to death, needing the next level to grow personally, as well as professionally,” Kyle said.
Robert sought out the correct corporate and securities legal counsel, audit firm, and corporate financial-advisor firm and never looked back. Robert recently stated, “Once I knew how they did it on Wall Street, I wondered why none my old competitors did it. Today, I’m glad they didn’t because today they can’t compete with me…not even close.”
The first two of the previous four examples are not all that empowering are they? They’re meant to be what they are, a warning. The money game is the biggest game in town, and it’s also the roughest. If you’re a serious entrepreneur, brace yourself in this armor of knowledge. It’s meant to protect you from those who would take advantage of your naiveté, to whatever degree they believe it is. The contents of the Corporate Engineering Conservatory™ knowledge base will enable you to do this right the first time whether you plan on simply sending business plans to venture capital firms or selling securities, such as; stock, bonds or cryptocurrency to individual and institutional investors to raise permanent or temporary capital.
This section of the Corporate Engineering Conservatory™ is no substitute for proper legal counsel, accounting or corporate finance advice. It gives you the knowledge you need so that you can control the events and the professionals you hire throughout this process. This information and subsequent testing is designed to increase the probability of successfully raising capital in the United States to the highest degree possible. How can we (my senior management members and I) make such a claim? We can because these are The Secrets of Wall Street in relation to funding start-up and early stage companies. We have simply brought the “Wall Street process” to “Main Street companies.”
The Corporate Engineering Conservatory™ is the precedent to a revolutionary change in the ability, not necessarily the way, to successfully raise capital. The fundamentals of the way to raise capital rarely change—if at all—however, the ability to perform the necessary tasks to ensure success has. However, as a treatise, we will also introduce you to complex processes that have been substantially streamlined and simplified for the benefit of your understanding of the way to raise capital successfully. We will also divulge numerous secrets, strategies, and techniques used to further your ability to successfully raise capital for your start-up, early stage, or later-stage Company. These are simplified versions of the practical applications used by Wall Street investment-banking firms. As it relates to raising capital for your company, our goal is to teach you how to deal from a relative position of strength throughout the life of your Company.
Most importantly, we want you to sell your company’s securities to us, as well as to and through our investor and broker dealer contacts.
The most challenging part of building the Corporate Engineering Conservatory™ was to take an enormously complex set of processes and simplify them as much as possible—without degrading them. The true value of what you are about to discover herein is your ability to make a qualified decision if these processes are right for you and your Company. Only you and your team can make the qualified decision if your Company is ready (or not) to take on this challenge. The process of selling securities to capitalize a company is not for everyone. This is not child’s play. We often humorously refer to the Corporate Engineering Conservatory™ as a tool we use to scare away the few entrepreneurs who simply are at the “dreamer stage” in their journey. From decades of experience, we know these processes will work for those who are ready. Many entrepreneurs come back to us within a few months—when reality sets in, and only then are they ready for the challenge and opportunity for long-term success. When the student is ready…the teacher appears.
To be clear, the activation of the processes outlined and clarified in our Corporate Engineering Conservatory™ are for serious entrepreneurs only. The Corporate Engineering Conservatory™ is designed for those who need to raise substantial amounts of capital for start-up, early stage, or later-stage companies—or commercial projects—and want to maintain voting control and the vast majority of equity ownership. These processes are used by Wall Street investment banks to raise capital for their client companies. You can use them to capitalize your Company as well! Once you are able to successfully raise capital in the private markets, opportunities will abound. At that juncture, you may decide to take the Company public, sell it outright to a strategic acquirer, or remain private as your own personal, best investment. To raise capital, you do not have to take your Company public. These processes give you options, not restrictions.
So continue on through this course and take the tests at the end of each section to move onto the next levels.
Securities Industry Definitions
“Equity” means common equity or preferred equity.
“Common & Preferred” is “Type” of equity.
“Class” is the “Designation” within Type of equity or debt.
“Series” in the “Order of Placement” within the Designation of the Type of equity or debt.
“Common Equity” is voting (normally Class A) or non-voting (normally Class B) capital stock. Common shareholders (or members or unit-holders in an LLC) have the right to vote on matters as spelled out in the By-laws or Operating Agreement for LLCs. These rights normally extend to: 1.) The right to share in a prorated percentage of profits (and losses); 2.) The right to vote in elections of the Board of Directors, who in turn set policy and elect the Officers of a corporation, who implement policy and run the day-to-day operations of the business; and 3.) Common shareholders may also have preemptive rights according to the By-laws or Operating Agreement. Common shareholders are last in the chain of distribution rights in the course of liquidation, forced through bankruptcy or otherwise.
“Preferred Equity” is a non-voting form of capital stock. However, preferred shareholders (or preferred members or unit-holders in an LLC) normally do have limited right to vote on matters as spelled out in the By-laws or Operating Agreement for LLCs, such as; the right to alter, add or subtract the various attributes of the preferred equity. These rights normally require a unanimous vote of all preferred and possibly all common shareholders. Preferred shareholders may also have preemptive rights according to the By-laws or Operating Agreement. Preferred shareholders are normally the 2nd to the last in the chain of distribution rights in the course of liquidation, forced through bankruptcy or otherwise. The attributes of preferred equity are spelled out in By-laws or Operating Agreement. The following are examples of attributes of preferred equity, which could include, but necessarily be limited to:
- “Stated Dividend” (or Cash Distributions for LLCs). Normally, holders of the Company’s Convertible Participating Preferred Units are entitled to receive “Stated Dividends” at a pre-set rate, such as; 8% per annum, payable quarterly, if and when declared at the discretion of the Board of Directors or Managing Member and out of funds legally available. Stated Dividends or Cash Distributions will depend upon, among other things, the operating results and financial condition of the Company, its present and future capital requirements, and general business conditions.
- “Participating Dividend (or Cash Distributions for LLCs). The aggregate holders of 20,000 Convertible Participating Preferred Shares or Units could have the right to receive distributions from net income at a pre-set rate, such as; Twenty Percent (20%) (known as the Participation Rate) of the net after tax income. Participating dividends or distributions are typically paid annually within 60 days after the end of each calendar year.
- “Conversion Privilege.” Holders of Participating Convertible Preferred Share or Units may have the right to convert into the Common Class A Voting Shares or Units at a pre-set pro-rated conversion ratio or price. Often the conversion ratio or price is commensurate with the participation rate any time until the Call date. The aggregate of the 20,000 Convertible Participating Preferred Share or Units may be converted, in whole or in part, into Twenty Percent (20%) on the total ownership of the company, on a fully diluted and on a pro rata ownership basis. Class A Voting Share or Units represent permanent equity in the company.
- “Cumulative Dividends.” Convertible Participating Preferred Share or Unit Dividends are normally cumulative and are paid in arrears before any Common Class A Shareholders or Members receive dividends.
- “Call Protection.” The Convertible Participating Preferred Units are typically callable at what is known as a pre-set “Call Price.” The Call price is pre-set with what is known as the “Call Premium” attached to it, to enhance the investors overall return. 110% or par value is typical for the Call Price. Normally, management may “Call” the Convertible Participating Preferred Shares or Units any time after the Call protection date has expired. Call periods typically run less than 5 years. Due to the call provision, the Convertible Participating Preferred Share or Units do not represent permanent equity capital in the Company.
- “Forward Lien Position.” Convertible Participating Preferred Shareholders or Unit-holders shall have the right to receive distributions from liquidation of the Company’s assets, ahead of Common Class A Shareholders or Members, but behind any general creditors, such as; Note or Bond holders, secured credit lines from Banks, leasing companies , etc. if business failure were to occur.
“Notes and Bonds” Commercial (as opposed to government) Notes and Bonds are typically priced at $1,000 each. However, one could price at any denomination for instance one bond for $10,000, $50,000 or a $100,000. Normally, one would issue 10 Notes or Bonds at a price of $1,000 for a $10,000 investment. The only real difference between the term “Bonds” versus “Notes” is the length of its maturity date from their issuance date. One would generally issue corporate notes with maturity dates ranging from ninety days to five years—corporate bonds 5–30 years (5, 10, & 30 year bonds are most common). Typically, one would issue notes and bonds in increments of $5,000 but can be any increment of $5,000, such as $10,000, $25,000, $50,000, etc. Notes and Bonds can be convertible into a pre-set amount of common stock or units at any time up to the maturity date.
“Start-Up.” A Start-Up Company is considered a company at the pre-revenue stage.
“Early Stage.” An Early Stage Company is considered a company at the post-revenue, pre-profit stage, with less than five years of operating history and less than $5 million in annual sales.
“Later Stage.” A Later Stage Company is considered a company at the post-revenue, post-profit stage, with more than five years of operating history and more than $5 million in annual sales.
“Passive Capital” means attracting capital from investors who are not interested in any active management of a company but seek relative safety with a better-than-average rate of return on their investment. We refer to these investors as “True Angels.”
“Active Capital” means attracting capital from professional investors who seek active management, strategic support, or both—i.e., actual control of the company. These investors will structure the deal (e.g., offer terms of financing on a term sheet) to achieve relative safety while seeking a substantial return on their investment. In most professional circles, this type of capital is referred to as “high octane” capital because of the high-pressure demand for speed and performance often put on the recipient company’s management team. These investors are commonly referred to as “institutional” or “professional” investors; and this type of funding is more typically known as “venture capital.” Most Angel Groups are considered professional investors. Throughout this exercise we will address both types of investors (re: True Angels and institutional/professional investors), as both sources of capital have their place. In the early stages, passive capital is generally better for most companies, especially for entrepreneurs who seek the freedom of control without having to answer to another type of boss (e.g., Angel Groups or the institutional/professional investors). In other words, too many proverbial cooks in the kitchen can distract the entrepreneur from realizing their dream.
“Permanent Capital” means common equity. This normally is issued in the form of Common Class A Voting Stock or Common Class B Non-voting Stock for Corporations and Common Class A Voting Member(ship) Interests or Common Class B Non-voting Member(ship) Interests for Limited Liability Companies (LLCs). Some states register an LLC as Member(ship) Interests and some as Member Interests.
“Semi-Permanent Capital” means hybrid securities convertible into common equity. This normally is issued in the form of Convertible Notes or Bonds; Convertible Preferred Class B Non-voting Stock for Corporations and Convertible Notes or Bonds; Convertible Preferred Class B Non-voting Member(ship) Interests for Limited Liability Companies (LLCs). These securities if paid off at maturity (Notes & Bonds) or are “Called” (Preferred Equity) become temporary forms of capital. If converted into common equity, become permanent forms of capital.
“Temporary Capital” means traditional lines of credit and or term debt, including mortgages with maturities of less than 10 years. This includes Non-convertible Notes or Bonds.
“Capital” when referring to “raising capital,” we mean raising substantial amounts of capital for the traditional working capital needs of “for-profit companies.”
“Substantial Amounts” of “seed” capital could mean anywhere from $100,000 to $1 million. Substantial amounts of “development” capital could mean anywhere from $1 to $10 million. Substantial amounts of “expansion” capital could mean anywhere from $5 to $50 million.
“Pre-sales of Product or Services.” Although it generally lessens the amount of working capital necessary (a very good thing) franchise sales, pre-construction price for real estate or other asset sales, or the sale of other rights, are not considered raising capital; these are booked as sales and are finite in nature.
“Grant Money.” Although it is nice if you can get it, we also do not consider grant money from governmental or other organizations as a form of available, working capital for a start-up, early stage, or even seasoned companies. The availability of grant money is always shifting—the amounts are always too small—and the probability of attainment is generally very low. Grant money often comes with too many strings attached; nevertheless, we encourage pursuing such available funding (under the right circumstances) once a company is properly capitalized through the means illustrated in this book.
“Government Assistance Loans.” We do consider any commercial lending activity as part of a capitalization plan or deal structure, which would include bank loans and lines of credit—US Small Business Administration (“SBA”) guaranteed or not—factoring of receivables, and purchase order financing. Like grants, Government Assistance Loans often come with too many strings attached; nevertheless, we encourage pursuing such available funding (under the right circumstances) once a company is properly capitalized through the means illustrated in this book.
“Traditional Debt.” We embrace reasonable amounts of debt as part of the overall capitalization mix—once a company has sufficient revenues to support the principal payments and accrued interest—because debt is the least expensive form of financing if one assumes success in the foreseeable future. However, too much debt can be dangerous in the early stages. Thus, before the entrepreneur obtains reasonable amounts of debt financing from banks, they normally must have a substantial amount of equity capital saved, raised, retained earnings, and or a combination from a sustained operating history. This often eliminates traditional debt structures for most start-up and early stage companies. It is important to keep in mind that financial structures need balance and that balance changes over time.
“Dilution” This is a phenomenon that few fully understand. It can be far more complicated given various conversion scenarios, so will keep it simple for the sake of understanding the principle. Dilution is the term used in the investment banking world in regards to the amount of the immediate value lost due to an investment in, primarily, common stock of a company with little or no marketable net assets. For instance, if an investor invests $1,000,000 in a young company that has no marketable net assets and receives 20% of the common stock (ownership) that investor just lost 80% ($800,000) of his or her investment, immediately. The company now has $1,000,000 in the bank (as its only net asset) and the investor only owns 20% of the company, or $200,000 of the $1,000,000 in the bank. Even if the investor owned 80% of the company, the investor would still lose the 20% or $200,000 immediately, which may take years to make up in value. With the inherent risks of investing in a start-up or early stage company, only a fool invests with any dilution present.
“Corporate Engineering Conservatory.™” The private, invitation only, member area where young companies are re-engineered to mitigate risk and maximize returns, using standardized corporate engineering principles designed on Wall Street for Main Street companies.
“Financial Architect®.” The proprietary software based system, housed within the Corporate Engineering Conservatory™, used to design a securities offering with a marketable deal structure, compliant with federal and state(s) securities laws, rules and regulations.
“CapPro™.” The proprietary software based system, housed within Financial Architect®”, that is the engine that creates the company’s 5-year capitalization plan and pro forma financial projections, compliant with GAAP, to arrive at a marketable deal structure.
“GAAP” The acronym that stands for Generally Accepted Accounting Principles, which is required when producing pro forma financial projections to be including in a securities offering document.
“IRR” The acronym for Internal Rate of Return, which is calculated with the assumptions of dividends and or interest re-invested into the securities in question.
“ROI” The acronym for Return On Investment, which is calculated with the assumptions of dividends and or interest not re-invested into the securities in question.
When speaking of raising capital for developing companies, our primary focus lies in how to raise “passive, semi-permanent” capital, as opposed to “active, permanent or semi-permanent” capital. As a rule, sources of temporary capital are rarely active.
In order to increase your Company’s chance of successfully raising substantial amounts of capital, it will be to your advantage to know how other entrepreneurs are successfully raising capital in the marketplace. It is also important to know the current trends in the private, as well as the public capital markets, so that you are strategically positioned to take advantage of these trends and get ahead of them. More importantly, to increase your Company’s chance of raising capital correctly and legally, you must understand the nature of the regulatory environment for issuing securities to capitalize your Company.
For most entrepreneurs, the wealth of information contained in our Corporate Engineering Conservatory™ is a lot to digest. To help you understand the full magnitude of the process, many concepts, techniques, strategies and tactics have been repeated and further clarified, with source data links, throughout the EBook “The Secrets of Wall Street- Raising Capital for Start-Up & Early Stage Companies.” The EBook is available to you at the end of this exercise by clicking on the EBooks Icon on the last webpage in this series.
 This is a typical example of another heart-breaking scenario we’ve experienced over thirty+ years in corporate finance.
 This is a highly likely scenario in our current environment.