Managing Director Training 2 – Industry Analysis & Opportunity

For start-up, early stage and most later-stage companies, raising substantial amounts of seed, development or expansion capital from traditional venture capital firms to incubate and maintain the company’s business plan, until sufficient operating revenue can be generated to support operations, is extremely difficult if not impossible.

True potential management-team professionals are high in demand, have limited time and most have a great interest in high risk ventures.

In general, there is far more investment capital available than there are qualified candidates available to invest in.

The term “Capital Overhang” is the amount of access money available for investment that will either need to be invested or returned to private equity or venture capital fund shareholders within a pre-determined period, normally 5 to 7 years, if no companies are invested in.

Through the end of 2015, the private equity industry in North America and Europe had a capital overhang of $749.4 billion

The public non-professional investors have a capital overhang that’s staggering in comparison, by a factor of appx. 23.5 times that of the professional investor, at $17.6 trillion.

Conducting the proper due diligence on start-up or early stage companies, the cost is simply prohibitive for venture capitalist.

Commonwealth Capital’s fiduciary duty responsibility rests with the issuer by:

Like other venture capital firms, we require board seats, common equity ownership and voting control until we can exit.

Because no professional entity would ever invest cash at these early stages, we trade capitalization service methods, education and coaching for preferred equity in selected start-up and early stage companies, as well as cash.

Once selected these companies become portfolio companies of our venture capital fund, Commonwealth Capital Income Fund-I.

From the institutional perspective, quality deal flow typically refers to a company with the possibility of becoming a multi-billion dollar firm within 3 years.

As we ultimately incubate quality deal flow for Wall Street or Corporate America we inherently incubate for Alliances.

From the institutional perspective, quality deal flow typically refers to a company with increasing, revenue streams & profitability, positive cash flow, an experienced management team, and a unique, high-demand product or service in a growing market.