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Every
publicly traded company needs some help to improve their shareholder
value. These tips are from those who have experience taking companies
public and providing all shareholders with an increase on their return!
WHATS THE BETTER DEAL?" On Making Corporate Choices
by Eric Barnes
In 2004, your private NON-US company grossed $1 million. Your Fairy Godmother will give your company $10 million. You won't have to repay the money. You'll keep 100% equity in your company.
Your alternative is to have our associate take your NON-US company public. They'll raise money for your company and train you in the corporate game of controlling your stock. The process will cost you a small percentage of your company. Your insiders will retain the majority and of your company's stock and complete operating control.
In either case, you'll use the money wisely to build your company along the lines he will teach you. In five years, you'll want to sell your company. At the time of your company's sale, your company's profit is $3 million/year.
Which offer should you have taken five years earlier to get the best price for your company?
The Fairy Godmother offer leaves you with 100% ownership of your private company. Your private company should sell for 1.5 times its annual profit. Your golden parachute is worth $4.5 million.
Our associate's programme assumes a public company merger in five years. Your stock should trade over $20/share. Your insider shares will be worth over $100 million.
Which was the better deal?
The moral of this story is take your operating company public. The money you'll raise from your equity financing isn't as much as the money you'll earn from the sale of your stock.
Mr. Barnes is President & General Manager of Capital Funds Group Ltd., a Canadian based consulting firm specializing in Putting Companies and Money Together. They also work with non-US companies to take them public rapidly and inexpensively, then getting them funded. Visit our Web Site Email Him
More tips for your
publicly traded company:
- The End of Reverse Mergers
The End of Reverse Mergers By William CateReverse Mergers are the most expensive way possible to take your private company public in the United States. While the front costs are usually under US$75,000,...
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