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Three Phases to Develop and Complete an Offering

There are three distinct stages to every Reg D 506(c) offering: structuring, development, and marketing.   It is imperative to understand not only the overall “Process” but to have respect for “the devil is in the details.”   The key to a successful placement is not just one component of having an award winning Business Plan or to spend $30 thousand on a 120 page Private Placement Memorandum.  It is to have a comprehensive “plan” that takes into account all the tasks and steps required to develop and complete the offering.

Although you may have a world class product or service, you are marketing a high-risk security to sophisticated investors.  We have to be realistic on the demands that this makes on the company’s personnel and resources.

Note## Some of our presentation material assumes that the viewer has little or no experience in raising capital via private placements.  If you are the veteran in “getting money from strangers” with structured offerings, bear with us.  Do pay attention to the full range of support services we offer from document development to escrow and transfer services.  We believe in having a single source for all the services required to place an offering is an economical and efficient solution regardless if this is your first offering or you have done numerous alternative investments previously.

One: Structuring the Offering

The first phase is determining the structure and type of the offering that mutually benefits both the issuer and prospective investor.  First, remember an intense “need for capital” does not translate into interest and demand from an investor.  In this phase, it is important to perform an internal due diligence effort to prepare an accurate and transparent picture to both your current operations and corporate history.

Two: Investment Development

In this phase not only does there have to be extreme attention to presenting an array of details ranging from past financial results, patents held, management bios to potential risk scenarios but we also must determine how we do effectively tell our story to investors in a realistic and SEC compliant manner.

By definition, a salient characteristic of a 506(c) offering is that the prospective investor will often make an investment decision based on the form and content of the investment material the company presents.


Three: Marketing the Offering

Good and bad news, there is 10 million accredited investors in the US.   We surely should be able to isolate 40 or 50 of them that have a burning desire to invest in our company.  Whether it is the latest running shoe on the market or investment in a private company, we still have to catch attention, stimulate interest, develop demand and close the deal.

The key to this phase is the use of multiple vehicles and messages aimed directly at the target audience.  If done correctly we “get in front” of thousands if not millions of prospective investors with ideas and words that make them want to know more about “our opportunity.

Building awareness and interest to millions increase the probability of “finding” the right 40-50 people that believe a profitable use of their capital is to invest in our offering.  Trite but true, it is a “Numbers Game”.