I am interested in understanding more about BDNT. I am representing a unique funding vehicle which I have outlined below. Do you have members seeking $5M or more and have predictable revenue and certainty of execution?
By selling “Revenue Certificates” to raise capital, small and midsized businesses are successfully filling the capital gap between “friends and family” financing and sourcing from the traditional capital markets.
Revenue Certificates compare favorably to conventional debt and equity securities for the small to midsized business sector where, under normal circumstances, investors struggle to achieve liquidity, fair valuation, and exit timing.
In their typical form, Revenue Certificates provide a lump-sum cash infusion into a company while the investor receives the right to a fixed percentage of the forward gross revenues for a period of time. A very basic illustration looks like this:
An Investor provides $10M to ABC Company in exchange for 1% of their top-line revenues, paid monthly, for the next 10 consecutive years. After the 10 year period ends, the investor intends to have recouped the principal outlay plus a return commensurate with the assessed risk associated with the investment.
Today’s Revenue Certificates are simply an evolution of an investment method that has existed since the Egyptian pyramids. Various forms of revenue participation structures (usually at the product level known as “royalties”), have been used as a means to derive return on investment and have proven successful in the oil and gas, media and entertainment, and pharmaceutical industries. They have been used by some prominent brands and corporations with proven success including but not limited to; Listerine®, Sears®, Arby’s®, Dunkin’ Donuts®, The Beatles™ and Steven Spielberg. Each has used revenue participation as the basis of investment contracts.
The modern iteration of Revenue Certificates is used as a substitute for equity or debt security issuances and can be easily structured to adapt to a company’s existing capital structure. Revenue Certificates are a form of capital that works well to align the interests of the company and investors.
The financing vehicle we are pre qualifying companies for has been patented and is a non-dilutive flexible security that provides financing solutions to companies without the need of traditional governance controls or forced exits typical of Venture or Mezzanine debt transactions. The financing vehicle trades on an exchange which is the place to find, research, track, manage, and trade securities of entrepreneurial companies. The security structure securitizes a monthly percent of a company’s revenue and brings Investors and Issuers together through a unique Capital Market System serving private and public companies.
- Generally, the program involves no, or only a small, equity dilution for the borrower
- The program generally requires that the developer/sponsor have at least 20%
verified “skin in the game” at the time of funding
- Developer/Sponsor relevant industry experience is a critical component
- Generally provides a lump-sum cash infusion into the company
- Investor receives a fixed percentage of the forward gross receipts for a period of
time (Generally 5 to 10 years)
- The investor computes a risk adjusted return based upon the company’s history and forward looking projections and adds that to the repayment of principal over the term. The amount of the issue is fully amortized over the term of the issue at the agreed upon interest rate.
Information required for a financing estimate is:
a. Executive Summary
b. Amount of funds being requested
c. Use of requested funds breakdown
d. Five (5) years of historical operating statements (if available). If start up you must meet the requirements of predictable revenue and certainty of execution
e. Background on the company, its history and vision for the future and key
f. Seven (7) to Ten (10) years of operating statement projections
g. Contracts, purchase agreements or LOI’s subject to financing
From: Robert Reich <[address removed]>
To: BDNT-announce <[address removed]>
Sent: Tue, Aug 30,[masked]:34 am
Subject: [BDNT] New Tech September
We have made some big changes for the September event and I wanted everyone to have enough time to register.
The logistical changes:
- New Tech will take place on Sept 13
- New Tech is happening at The Boulder Theater
- New Tech is going to start at 5:30pm
- The doors at the Boulder Theater will open at 5:00pm
- The TechStars TV Show will be shown on a BIG screen at 7pm for everyone
- The TechStars Smackdown/Job Fair will start at 8pm
- Registration is free and being handled by TechStars, so please register at http://tsb2011-mayhem.eventbrite.com/
Please Note: If you hit "REPLY", your message will be sent to everyone on this mailing list ([address removed])
This message was sent by Robert Reich ([address removed]) from New Tech (Boulder Denver).
To learn more about Robert Reich, visit his/her member profile
Meetup, PO Box 4668 #37895 New York, New York[masked] | [address removed]