The Isolated Offering, Vol 9, Issue 9
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The Isolated Offering
A Newsletter of The Lebrecht Group, APLC
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| September 15, 2009 |
Volume 09, Number 9
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| In This Issue
How to Raise Money for Your Company 5 Tips to Maintain a Strong Stock Price More Exit Strategies for Affiliate Shareholders of Corporations – “Milking the Business” The SEC Expands Its Subpoena Power Is the PCAOB Unconstitutional? How to Choose a Corporate Securities Attorney 5 Ways to Help Maintain ’34 Act Reporting Compliance View LinkedIn Profile for Craig V. Butler, Esq. Contact Us http://www.thelebrechtgroup.com 9900 Research Drive 406 W. South Jordan Parkway |
How to Raise Money for Your CompanyFor many private and public companies raising funds is essential to
get over the hump and on the road to revenues and eventual profits. There are several things companies can do to increase their chances
of successfully raising money on favorable terms.
It should be pointed out up front that this article is not a list of funding sources and their contact information. If raising funds were as easy as a telephone call or e-mail to a funding source all companies would be successful in raising money. Instead, this article will assist companies in what they need to do to be as successful as possible in raising money. My law firm represents several financing sources and investors and based on that representation the purpose of this article is to assist companies in preparing for financing and being able to accept funding when it is offered. Hire an Experienced Attorney. The purpose of your attorney is to properly advise your company and prepare it for the potential financing – not just as a source of connections to financing sources. Unfortunately, more times than not hiring an attorney merely for alleged connections to funding sources will leave you overpaying for substandard legal services and none of the promised funding to pay your bill. This doesn’t mean an attorney can’t introduce you to potential financing sources, but make sure your primary purpose of hiring your attorney is their knowledge of corporate securities law and ability to give you quality advice in a way you understand; and not only for their alleged financing sources. Hiring an attorney experienced in corporate securities law will lead to your company being advised as to its different financing options, as well as ensuring any financing transaction is properly documented, which is just as important as locating financing in the first place. Look the Part. This is a multi-faceted step. First, looking the part means making sure your corporate documents and capital structure look like a company ready to take the next step. For instance, a company with 100 shares authorized and 100 shares outstanding with no bylaws, no organizational….[more] 5 Tips to Maintain a Strong Stock PriceA few things to think about while reading this article. First, most of these tips are obvious. However, if I had a share of stock for every time I heard an officer or director of a public company express curiosity about their falling stock price and then went to check the company’s compliance with the tips herein and found the last press release from the company issued 1+ years ago and extensions of time filed for the last three periodic reports, I’d have a very large stock portfolio. Second, none of these tips are meant or should lead to any illegal or “pump and dump” activities or advocate anything but absolute honesty in all filings and posted materials to the public. The goal here is a strong stock price reflective of the company’s operations and its financial position, not some objective “good” stock price that is not an accurate stock price for the company. Third, there are many more things that will impact your stock price that are out of your control than are within your control. Although difficult, learn to worry about the things you can control and let go of the things you can’t control. The overall market and the performance of your market segment will likely impact your stock price more than your company’s performance. 1. Concentrate on your business. This is crucial. Too many officers of company’s worry about their stock price as much as their core business. Admittedly, it can be difficult to concentrate on business when disgruntled investors are constantly calling regarding a falling stock price. However, with so many things affecting your stock price that are out of your control, concentrating on growing your business and improving your profitability are things that will eventually have a positive impact on your stock price. If you concentrate on your business and follow the other tips contained herein, the market should eventually notice your company and affect its stock price accordingly. 2. File accurate reports. If you are reading this article your company is a public company and hopefully one that is filing regular reports as either a ’34 Act reporting company or a Pink Sheets current public information company. In either case filing periodic reports (10-Qs and 10-Ks) and current reports (8-Ks) that are accurate is essential. Few things engender less confidence in a company than one that has to restate its final statements and/or file corrective filings. To shareholders and prospective shareholders this portrays a failure by management to properly oversee their company’s filings. [As an aside, if you are non-current public information company trading on the Pink Sheets you need to seriously consider becoming a current public information company under the Pink Sheets or a '34 Act reporting company. Taking these steps for your company will likely increase your stock price more than any other tip herein.]….[more] |
