Most of our Clients who have enjoyed success as venture/hedge fund managers or securities/commodities traders have capitalized their asset pools with their own money and limited outside investor resources. Many saw a need to reorganize their financial and operational structures as the administrative burdens of managing multiple asset classes with differing sets of investors are becoming heavy. Many now have come to the juncture where they have earned the right to manage large pools of assets (i.e., cash, foreign currencies, precious metals, art, rights, patents, or other alternative asset classes) with full discretionary authority. Many are ready to set up an operation where they can quickly access capital to take advantage of opportunities as they arise. Having immediate access to large pools of equity capital relieves the pressure of missing out on great opportunities, because of the need to arrange the financing for each deal separately. Yet, investing for the sake of investing or simply because too much cash is sitting idle could be worse, and eventually affects the rates of return performance. If you identify with any or all of these scenarios, we have the expertise to assist you in achieving your goals.
IMPORTANT: With Financial Architect®, you have two choices of issuing securities for capitalizing the Fund—common or preferred equity. Either can be used to capitalize the Fund. The advantages and disadvantages are as follows:
Issuing Common Equity to capitalize the Fund:
- Common equity is the industry norm and therefore may be easier for investors to understand and accept as a deal structure.
- Common equity shifts the vast majority of risk and return to the Fund equity holders and away from the Management Company.
- Common equity is harder to sell through general solicitation and advertising; because unless one has three years of an audited track-record of asset performance, one cannot advertise any type of expected return.
Issuing Preferred Equity to capitalize the Fund:
- Preferred equity is not the industry norm and therefore may be more difficult for investors to understand and accept as a deal structure. However, once understood it is very popular with retirees seeking income from their investments.
- Preferred equity shifts the vast majority of risk and return to the Mgmt. Co. (as the majority owner of the Fund’s common equity) and away from the Fund’s preferred equity holders.
- Preferred equity is easier to sell through general solicitation and advertising; because one can advertise the stated dividend (corp.) or distribution (LLC) as the expected return, without the need for three years of an audited, track record of asset performance. The stated dividend will enable you to effectively compete with financial institutions for investors.
Venture Producer™ includes everything you need to start raising capital today by creating a Venture Management Company with a Private Venture Fund or an Exchange – Traded Fund (ETF).
- The e-book The Secrets of Wall Street: Raising Capital for Start-Up & Early Stage Companies –
(Click to Preview Foreword)
- CapPro™ for Funds. A Capitalization Planner and Pro Forma Producer, this powerful tool is the engine that drives the “marketable deal structure.” More importantly, it produces the GAAP Compliant, 5-year Pro Forma Financial Projections using the following required financial statements:
⦁ Income Statement & Company Valuation;
⦁ Consolidated Statement of Operations;
⦁ Consolidated Statement of Cash Flows;
⦁ Balance Sheets;
⦁ Sources and Uses Statement;
⦁ Internal Rates of Returns Statements (under three separate scenarios); and
⦁ Notes to Pro Forma Financial Projections.
Note: It would take approximately 80 to 100 days and cost at least $75,000 to $150,000 to outsource the production of these requisite documents for both the Management Company and the Venture Fund without Financial Architect and the Sprocket Blueprint(TM).
- Securities Offering Document Software Templates for the Mgmt. Co & the Venture Funds. These Templates are built for Title II (Accredited Crowdfunding – Rule 506 (c) or for a limited public offering to accredited investors, only), & Title III (Regulation Crowdfunding) Regulation D Rule 504 or 506 (b) for private offerings.
These simple to use templates facilitate timely production of your securities offering documents for both the Management Company and the Fund. The Software Templates include the most attractive Deal Structures for a Management Company and a Fund, which can easily be modified to build as many Funds as you desire. These Deal Structures involve offering convertible participating preferred equity—an exceptional hybrid security to raise substantial amounts of Development Capital for the Management Company and for the Venture Fund. Offering preferred equity in the Venture Fund will not only separate your securities-offering from the crowd, but more importantly it will enable your Mgmt. Co. to retain up to 100% of common equity of the Venture Fund. This is HUGE!
The preferred equity securities have a stated dividend; participates in a percentage of Net Income (participating dividend), and is “callable,” thereby making this a temporary form of equity—if you, the issuer, deem it to be so. The Deal Structure Templates include everything you need to create Securities Offering Documents for both entities compliant with federal and state(s) securities laws, rules, and regulations:
⦁ The text body of the relevant Private Placement Memorandum, according to the deal structure you have chosen (common or preferred equity for the Venture Fund); and
⦁ The Subscription Agreements with built-in Investor Suitability Questionnaire, Preferred Stock Indenture, Operating Agreements for LLCs, and Opinion of Legal Counsel (draft template).
Note: It would take approximately 80 to 100 days and cost at least $75,000 to $150,000 to outsource the production of these requisite documents for both entities without Financial Architect(TM) and the Sprocket Blueprint(TM).
- Access to the Commonwealth Capital Club. A private, password-protected area that contains the following:
⦁ Accredited Capital Sources, which allows you to expose your securities offering(s) to the maximum amount of investors possible. Once inside, you can access online, up-to-date portals containing tens of thousands of accredited “angel” and institutional investors. These portals have been filtered to include investors who have specifically stated that they are looking to fund start-up and early-stage companies. This valuable resource enables you to quickly, easily, and inexpensively offer securities for your start-up or early-stage Company directly to as many qualified investors as possible. This inherently increases your probability of success to the highest degree possible.
⦁ Financial Architect System™ Tutorials
⦁ Tips on how to successfully compete against financial institutions for individual investor capital
⦁ Regulatory information to ensure compliance with federal and state(s) securities laws, rules, and regulations
Are you ready to go the Next Level in the world of Venture Capital?
NOTE: Financial Architect® is only available within the Sprocket Blueprint.