Liquidity and Dilution

There are two overriding questions a private investor will ask a company looking for capital.  The first is "when will I be liquid?" and the second is "how much dilution will I see between now and then?"

These are valid questions, and if you don't have an appropriate answer you will see capital opportunities dry up.

Too many times we observe companies ask for capital that have not thought out the exit strategies for their initial investors.  Now that we are seeing a resurgence of IPO activity and business growth, there should be multiple options for liquidity solutions in a business plan.

Other companies may have an exit strategy planned, but they conveniently forget (or don't plan) on additional capital raising activities - possibly diluting original investors' positions.

This issue is geared to getting private investors liquid with a minimum of dilution.  Yes, our first two articles are written from the investor's point of view - executives and capital strategists should read them carefully!

A Cautionary Tale

I am an accredited investor.  Somehow I got onto a list, and I have had companies pitching everything from new television networks to new technologies to PIPE offerings.  I am being offered "once in a lifetime" opportunities to invest in major motion pictures.  I don't mind the pitches - I like hearing about financial opportunities.  Finally, one of them sounds good and I actually take the plunge.

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Start at the End

As detailed in the first article, nothing is more frustrating than holding an investment beyond your initial projected time frame.  Companies looking to raise equity capital need to work their strategy backwards as well as forwards before they start. 

[FULL ARTICLE]

Has Your Train Left the Station?

We saw the trend coming last fall.  Now empirical data is backing up our gut call on the markets. The people who started the year thinking growth and funding are being rewarded.  Is it too late to catch the money train?

[FULL ARTICLE]