Equity Funding
Ever consider having investors back your business? The Vant Group places Equity Funding for its clients, whether for business start up, business acquisition, business merger or business expansion.
This is complicated area not only because the financial projections and documentation are at least as involved as with debt financing but also because state and federal securities regulations catch the unwary. Our experienced professionals guide you through the whole process and work closely with you and your accountant and attorney.
If so, welcome to the wonderful world of Equity Funding. This world of Equity Funding has numerous names:
Venture Capital - Equity Funding
- Equity Financing
- Investment Funding
- Investment Banking
- Syndications
- Start up Financing
- Initial Offerings
- Initial Stock Issue
- Stockholders
- Limited Partners
- Money Partners
- Other People's Money (OPM)
- Private Placements
Whatever the name the result is the same – the business is owned in part by a passive investment interest and in part by a working interest.
The Vant Group also understands that compatibility with your investors is also important. Plus, we do not undertake to place your Equity Funding unless members of The Vant Group have enough faith in your success to be in your investor group.
Equity Funding also imposes fiduciary obligations on you. Whether your investors are called Limited Partners, Members, Stockholders, or Beneficiaries you will owe them business transparency and an honest count of the profits.
On the other hand, your investors are more than just a money source. Your investors are allies and a tremendous resource of experience, business acumen, contacts, influence and financial reserve who have a vested stake in your success.
Advantages to Equity Funding
- Greater percentage can be financed than from debt financing, often over 100%
- No fixed monthly debt payments. Pay out of profits only.
- Generally, no personal liability for return of invested capital.
Before you begin the process, you will probably have a lot of questions:
- Is Equity Funding possible for my business?
- Will I have personal liability? Is Equity Funding a form of non-recourse financing?
- Will I still control my business?
- How much will my investors want?
- How much does it cost to prepare and prepare an Issue?
- Can I ever buy out my investors?
Examples of Previously Funded Transactions:
1. |
Type of Financing: | Business Start-up |
| Type of Business: | Powdered Milk Manufacturer | |
| Type of Entity: | C Corporation | |
| Issue Sold to Investors: | Preferred Stock | |
2. |
Type of Financing: | Combination Purchase of Real Estate and Business |
| Type of Business: | Phased Mini-warehouse Project | |
| Type of Entity: | 2 Limited Partnerships, a real estate owner and a business operator | |
| Issue Sold to Investors: | Limited Partnership Shares | |
3. |
Type of Financing: | Purchase of a Business |
| Type of Business: | Motorcycle Dealership | |
| Type of Entity: | C Corporation | |
| Issue Sold to Investors: | Preferred Stock | |
4. |
Type of Financing: | Real Estate Investment |
| Type of Business: | Multi-unit Apartment Complex | |
| Type of Entity: | Limited Partnership | |
| Issue Sold to Investors: | Limited Partnership Shares | |
5. |
Type of Financing: | Business Expansion of a Second Site for a Motor Vehicle Dealership |
| Type of Business: | Build to Suit and Motor Vehicle Franchise | |
| Type of Entity: | Limited Partnership to buy land and build the facility. Sub-S Corporation to operate the franchise. | |
| Issue Sold to Investors: | Limited Partnership Shares and Corporate Stock. |
Examples of Current Syndications Being Sponsored:
1. |
Type of Financing: | Business Start-up |
| Type of Business: | Restaurant | |
| Type of Entity: | Limited Partnership, with a Limited Liability Company as the General Partner | |
| Issue Sold to Investors: | Limited Partnership Shares and Memberships | |
2. |
Type of Financing: | Business Merger and Franchise Start-up |
| Type of Business: | Hot Dog Chain | |
| Type of Entity: | TBD | |
| Issue Sold to Investors: | TBDLimited Partnership Shares |
