Helping Your Business Obtain Financing

 When companies choose to raise money themselves without a broker-dealer, they often encounter obstacles in closing sales with potential Sophisticated Investors who are accustomed to reading comprehensive, analytical reports from credible institutions as to the veracity of the offering.

An independent Due Diligence Report from your ValuCorp solves this issue. A Due Diligence Report assures that a reasonable investigation has been independently conducted, verifying the company’s representations in the offering documents.  A Due Diligence Report will confirm that the:

  1. Issuer adheres to just and equitable principles of trade by including full and complete information in the private placement memorandum (PPM) and marketing materials.
  1. Financial Statements are audited or auditable, preferably by a CPA firm currently registered with the Public Company Accounting Oversight Board (PCAOB).
  1. Independent Enterprise Valuation supports:
    • Fairness of transactions between affiliated entities.
    • Reasonable basis for yields, return of capital and rate of return, and financial projections, supported by prior performance and complete assumptions that create reasonable targets.
    • All material risks of the offering have been identified and adequately disclosed.
    • Intellectual property values are separately stated.
  1. Sales materials to investors contain accurate statements and the information necessary to make informed investment decisions.
  1. Supervisory systems are established, maintained and enforced, designed to achieve compliance with applicable securities laws and regulations.
  1. Mail Campaigns are conducted properly. All letters or reports to investors updating them on the progress of their investment in terms of realistic future expectations, include required risk disclosures and the complete financial picture of the company.
  1. Rescission rights have been mitigated with appropriate steps – failure to comply with material elements set forth above could result in investors having the lifetime right of rescission, with repayment from the company, its officers and directors, and the salesperson.

Transaction Implementers:

 Equity:

 For companies that have:

  • At least $1 million of revenues, or immediate revenue based on raise of capital.
  • An appropriate Use of Proceeds justifying $5 million to $40 million.
  • Good to great prospects for the future.

Capital Raise is via a PPM (Private Placement Memorandum) with appropriate value-pricing of the offering units, and assisting management with:

  • CUSIP number.
  • The Fidelity Investments® platform for qualified and non-qualified investors.
  • Regulation D Blue Sky filings associated with the private placement offering.
  • PCAOB (Public Company Accounting Oversight Board) registered CPA firm introductions (are necessary if Sponsoring Company is not currently using one).
  • Sales to Accredited Investors via a SEC compliant “non-broker dealer affiliated” Registered Investment Advisors.

How it works:

  • Distributing a market-smart Executive Summary (and Pitch Book/Deck Power Point/PDF) designed to ascertain prospective investor interest prior to releasing the PPM.
  • Marketing of the PPM to RIAs.
  • Transaction Monitoring to assure compliance with Federal and various State Securities Commission requirements to maintain Regulation D exemption.
  • On-going Monitoring during the term of the investment, while providing continual involvement in the interface between the sponsor and the investors.

 Information recommended (improving the timing and probability of success):

  • Business Valuation (includes comparable public and private companies, industry outlook, and financial analysis of historical financial statements with estimates for current year and financial projections aligning Balance Sheets and related Statements of Operations, Changes in Equity and Cash Flows, based on a comprehensive set of assumptions)
  • Intangible Asset Appraisal
  • Due Diligence Report
  • On-going Monitoring to maintain active involvement in the interface between the sponsoring Company and the Accredited Investors.

Loan Program:

 For companies that have:

  •  At least $500,000 of revenues, or immediate revenue based on raise of capital.
  • An appropriate Use of Proceeds justifying $500,000 to $200 million.
  • Good to great prospects for the future.

Loans via:

  • SBA lenders
  • Financial Institutions
  • Others, such as insurance companies, private equity companies and venture funds

What to prepare:

Information required:

  • Short executive summary or business plan that includes:
  • Use of Proceeds description
  • 4 years of projections
  • 4 years of business financial statements

May be management prepared,

  • 3 years of business and personal tax returns
  • Personal Financial Statements of owners of 20% of more (for the Lender bank)
  • Accounts Receivable aging, Accounts Payable aging, inventory list, equipment list
  • Depending on the Lender, there might be a requirement for appraisals of the business, real estate, or equipment

Information recommended (improving the probability of success – see prior page):

  • Business Valuation (includes comparable public and private companies, industry outlook, and financial analysis of historical financial statements with estimates for current year and financial projections aligning Balance Sheets and related Statements of Operations, Changes in Equity and Cash Flows, based on a comprehensive set of assumptions)
  • Intangible Asset Appraisal
  • Due Diligence Report