Some Secrets to Raising Capital for your Business

Posted on August 9, 2011 by Frank Nagy

Raising capital is one of the most critical activities in getting a business started, for obvious reasons. It is one of the largest hurdles development stage and microcap companies have to overcome. Raising capital through private investors is one of the best ways to get a young company off the ground. Raising money this way provides your company with more exposure to your best customers. Getting equity from family and friends has many advantages over other types of financing. The course offered at www.RaisingCapitalSecrets.com is one of the most comprehensive guides available for raising the capital you need to start a business or to grow an existing business the world of raising capital.Small businesses are a major part of our economy, in fact one of the most important resources we have is the small entrepreneur. We need to keep this resource active as part of our economic growth. To fund the business and keep a roof over one’s head, the entrepreneur must maximize assets, minimize expenses, and use credit judiciously. By having a strong business plan, you will be able to effectively present your concept to potential angel investors, venture capital firms, banks for SBA Loans, or Business Loans. They can provide your business extra working capital that can be used for marketing, purchasing of property, purchasing of another business, or for just about anything else for the growth of your business. The investors want to see in depth information on how much money you need to run your business, and they also want to see how that money will be spent.Luckily, there are still options for funding new companies, but finding and securing the cash will take careful research, good negotiating skills, and, above all, an unflagging commitment to launching your new business. When raising capital privately, your offering memorandum is the disclosure document you must present to communicate the benefits for your business model

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Raising Capital in Today’s Economy

Posted on August 2, 2011 by Frank Nagy

Some companies believe that helping clients develop business plans and raise capital from “angel” investors, corporate entities and venture capitalists requires a tremendous amount of work, but it can be done. They will happily charge you for all the “hard work” that it is going to take. Others of us believe that it just takes know how and tenacity. There are lots of secrets to raising capital out there, but most companies won

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How to Raise Capital Using Family Office Lists

Posted on July 26, 2011 by Frank Nagy

Lets start with the hard way to raise capital using this resource. This would be to start from scratch and slowly build up your own list of family offices. By doing this you would get relatively fresh data by using search engines but your list would probably miss some family offices that don’t have websites or purposely are very hard to find and identify. After getting a small directory of FO names together you could then search on Google, LinkedIn.com, Facebook, Twitter, etc. to find contact details for these professionals but it would literally take over 300 hours to produce a workable valuable database. This approach may make sense if you are in some small countries such as Thailand or Czech Republic and you only want to approach local firms, but for most US and European based fund managers this is not practical.The easier way is to go out and review family office lists available and obtain one for your team. This option is a bit more expensive but it allows you to effectively outsource the hard work of conducting the industry research to an outside firm instead of taking all of that on yourself within just your own team.Which ever method you use to obtain your resource your team should be able to benefit from using it to reach out to potential investors, schedule phone calls, complete roadshows, and connect with more professionals at conferences.I hope these tips provide a good overview of how to obtain and use a FO list, good luck with your capital raising projects.Bottom Line… if you are working with or trying to raise capital from family offices you are going to use your time more effectively if you invest it in building relationships and not having to build your own Family Office Database from scratch.- Richard Wilsonhttp://FamilyOffices.com

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Start a money transfer business

Posted on June 15, 2011 by Frank Nagy

Money Services Businesses (MSBs) contribute an important role in providing financial services to people who do not have bank accounts in the United States. MSBs are able to provide money orders, traveler’s checks, check cashing, currency exchange and domestic wire money transfers. Federal requires that MSBs must also comply with state laws requiring licensing, registration, documentation and record keeping requirements. In addition, there are bonding requirements and restrictions on what to do with the funds prior to disbursement. Incorporate your business. Contact your secretary of state corporation office and download the necessary forms to incorporate your business. Obtain an employment identification number (EIN) from the IRS so that you can open a bank account.Download form 107 from the Financial Crimes Enforcement Network (FinCEN) and register your company as a Money Service Business (MSB). Hire a compliance officer. A compliance officer has the ongoing responsibility for keeping your MSB compliant with all federal and state regulations. He should have authority to oversee all new accounts, train the staff to know what to look for in money laundering activities as well as keeping the operations procedures currentDevelop an operations manual. Your MSB needs to have written policies and procedures to operate in daily activities. The operations manual is based upon a written assessment of risks to the MSB and should be customized to the business. The operations manual should consist of procedures of documenting transaction activities, gathering customer identification and maintaining records, foreign currency reporting, as well as suspicious activity reporting, ongoing training.Start advertising. Billboards, newspaper ads and the internet are excellent sources to advertise your money transfer business. Develop a website that is user friendly and that has a strong security system build in to it. This will prevent unauthorized users from hacking in to your customer date base.

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Start a auto finance company

Posted on June 8, 2011 by Frank Nagy

Not many people can afford to put down $10 to 20 thousand dollars or more to buy a new car. Banks may have certain qualifications regarding credit and income. However, an auto finance company has many ways to finance the sale of an automobile. Rates and down payments are higher to compensate any credit risks from the borrower. Starting an auto finance company can be lucrative and rewarding. With a high profit margin secured by assets such as the borrowers vehicle makes the auto financing business very attractive.Contact your state and pay any application fees they require to obtain a commercial finance license. In some states such as Florida the application fee is $825 and there is a minimum of $25,000 liquid cash requirement. Apply for a line credit from your bank. This is the cheapest form of financing to be lent out to your borrowers. Your profit is the difference in interest between what you pay your bank and what you interest rate you charge your borrowers. If your bank is charging you 3.5% on your credit line then you can charge as high as 18% to your borrowers (depending on their credit history).Visit as many car dealerships as possible. Meet the finance manager and present him your lending programs. Car dealerships make money on points they earn on the financing. One point is translated to 1% of the entire loan. The easy it is to get their customers financing, the more cars they sell and the more money your auto finance company lends.

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How to end a limitedliability partnership

Posted on June 1, 2011 by Frank Nagy

Unlike corporations which have a perpetual life span, limited liability entities have a specific life with an end date. The end date or wind up date is located in the partnership agreement. In some cases, the wind up date can be prolonged if agreed by the partners. When the limited liability partnership winds up its business, it has to liquidate and distribute its assets to the partners. This can be lengthy process if the partnership had accumulated a lot of assets during its life.Locate and document the value of all assets. Get the assets appraised by qualified professionals who specialize in value those particular assets.Organize a sale of the assets. Contact a local auctioneer who can sell the assets quickly a the next auction. Place ads in newspapers that you are going out of business and name a few the assets in the ads.Pay off any creditors. If the partnership had borrowed funds in its life, they must be repaid. Get a letter of satisfaction of debt from the creditor evidencing that the lien has been paid and the asset has been released.Close the partner’s capital accounts. A capital account is a term used to show how much each partner has invested, any withdrawals and any distributions to the partner. Allocate remaining net proceeds from the sale of the assets to the partners.

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Making money with stock options

Posted on May 25, 2011 by Frank Nagy

Trading options on stocks are great ways to hedge against down markets. If you own a stock you are considered “long”. Since you are long the stock, you are entitled to trade the stock on margin. Margin is a loan that your stock broker makes to you to finance other investments such as buying more stock in the same company. By adding the shares you currently own plus the new shares you buy with the margin loan, you can now buy or sell an equal amount in stock options. Locate a stock that you want to buy with your own cash. Ask your stock broker if he recommend a good blue chip stock. A blue chip stock is a company that has strong earnings and manageable debt. Typical blue chip companies are ExxonMobil, GE, Microsoft, etc.Purchase a minimum of 100 shares of the company. You can buy any amount of shares in today’s market, but in order for you to buy or sell options; you need to buy the stock in 100 share blocks. Let’s say you bought 100 shares of Microsoft at $26 per share. Not including commissions, your total cost would be $2,600.Ask your stock broker to pledge your stock for margin and borrow and equal amount in value to purchase another 100 shares of Microsoft. Now you will own 200 shares instead of 100. We are not considering the loan interest on the margin which can be as low as 3% per year.Buy 2 option puts if you intend on hedging against any down swings in the stock. An Option contract gives you the right to buy or sell stock at a given price on or before a stated date (maturity date). A put option gives you the buyer the right to sell the stock at a certain price by the maturity date. A put buyer is speculating that the stock price will fall before the option expires. You can get a put option price for Microsoft by asking your stock broker for a quote. Expect to pay about 1 to 2% of the value of your stock for the stock option. Sit and watch your stock. If your stock start to climb, your option will expire worthless. Your breakeven is calculated by how much you spent total on purchasing the stock plus the cost of the option contract divided by the total shares you own. If your stock reverses, your breakeven is total purchase price of the stock minus the cost of the option contract divided by the total shares you own.

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Negotiating stock purchase agreements

Posted on May 18, 2011 by Frank Nagy

Stock purchase agreements are contracts to transfer shares of stock in a company/seller to a buyer. The important provisions of any stock purchase agreement has to do with the transaction itself, such as the number of shares being purchased, the price per share and the amount of percent ownership that represents the shares purchased. Once the buy sell transaction is closed, the company that is issuing the stock will transfer and deliver the certificates to the purchaser who will pay the price indicated in the agreement as consideration for the stocks being bought.Find out the overall value of the company who is selling the stock. This is called valuation. You can request a copy of the company’s financial balance sheet and income statement along with copies of the last two years of the corporate tax returns. Look at the shareholders equity in the balance sheet and determine how much your shares will be worth by dividing that amount by the amount of shares you intend on purchasing.Negotiate a share price for the stock. Typically the share price you offer should be less (discounted) than what the company is worth from the shareholders equity portion.Negotiate the percent of ownership you shares represent. This will depend on if there are other shareholders in the company. The company directors may need the shareholders approval prior to diluting their ownership share in the company.Close the deal. Deposit your money into escrow and wait until the company delivers the stock certificates to you. Verify your name and the amount of shares is correct before accepting the certificates. The company escrow agent will not release your funds until you take delivery of the stock.

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Paying out shareholders of an s corporation

Posted on May 11, 2011 by Frank Nagy

Corporations that elect to pass corporate income, losses, deductions, and credits through to their shareholders for federal tax purposes are considered to be classified as S corporations. A shareholder of an S corporation would receive a K-1 form from the corporation which breaks down the flow-through of income and losses on their personal tax returns and are assessed tax at their individual income tax rates.Gather the names of all the shareholders of the S corporation. This is found in the shareholders record form in your incorporation documents.Elect to have the corporation taxed as an S corporation. Shareholders of the existing corporation must make an election to be an S corporation. Once agreed by the shareholders, have the officers of the corporation file IRS Form 2553 making the S election.Compute the stock and debt for the S corporation. At the end of the year the stock and/or debt basis of an S corporation goes up or down based upon the S corporation’s operations. These amounts are to appear in the K-1 form. The K-1 reflects the S corporation’s income, loss and any deductions which are allocated to the shareholder for the year. Issue the K-1 form to each shareholder along with their net profit distribution. Each shareholder will receive the net profit distribution according to their pro rata share.

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Refinancing with quit claim deeds

Posted on May 4, 2011 by Frank Nagy

A real estate warranty deed is legal document that indentifies the transfer right of ownership or title from one person to another. It is recorded in the county court house where the property is located. A quit claim deed is a legal document disclaiming the rights of the person titled to the real estate property. Quit claim deeds are fast ways to assign real estate to another person so that they can obtain financing and pay out the sellers interest.Download a standard quit claim deed form from the internet or office supply company. The price range can be between $25 and up. If you’re not comfortable with filling out the deed, have a qualified real estate attorney complete for you. Attorneys can charge a flat rate of $250 per hour or more depending on the situation.Draft a contract between you and the seller. The contract should state that the seller will “quit” claiming any rights to the property through the execution of a quit claim deed. This does not relinquish his current obligations to the existing mortgage on the property. Have the seller sign the quit claim deed. Go in person to the county court house where the property is located in and have the deed recorded. Be sure to have the clerk record the document and hand it back to you for your records. Go to your bank and apply for a refinance loan. Provide the loan officer with a copy of the quit claim deed. The loan officer may require you to provide copies of your income tax returns, bank statements and a credit report in order to process the loan.Attend the refinance closing. The closing agent will provide settlement statement outlining the cost of the refinance as well as the payoff balance of the existing loan on the property. The net difference is typically given to the seller.

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