scott lopez-lunch & learn presentation july 15, 2016
Post on 12-Apr-2017
179 Views
Preview:
TRANSCRIPT
PRIMARY CAPITAL, LLCMEMBER FINRA, SIPC90 BROAD STREET, SUITE 905, NEW YORK, NY 10004T (212) 600-0030 F (212) 400-4234 INVESTMENT BANKING, FINANCIAL SERVICESWWW.PRIMARYLLC.COM
SCOTT LOPEZ – MANAGING DIRECTORSERIES 63, 82915-433-7655SLOPEZ@PRIMARYLLC.COM
What Does An Investment Banker Do?
Capital Raising Investment banks assist their clients to raise money through stock
(equity) or bond (debt) offerings. The proceeds can be used for expansion, new investments, working capital or repay debts.
Advisory Investment banks advise their clients on certain strategic moves such
as buying or selling a business, and restructuring business lines to improve profitability. In many cases the strategic move (e.g. acquisition) requires concurrent capital raising exercise described above.
Must be Registered with FINRA, the SEC and the State A Match Maker!
Investor Mindset
Remember, they’re trying to eliminate YOU …But need deals too!!
First and foremost, how much are you raising?
What’s the valuation of the company?
What are you willing to give up in terms of equity or control?
Investor Mindset
Who Is Management?
What’s Your Financial Model? What Are the Revenue Streams? Do you have a well thought out business model? Business plan?
What Milestones Have You Achieved? Is there MOMENTUM??
How Much Have You Raised and What Have You Done With It?
Pricing a New Offering - Series 79
The current direction of the market overall
The trends of the underlying sector
The financial well-being of the company, both on its own merits as well in comparison to its competitors
Annual and quarterly reports made publicly available to the company
Financial statements and proxies required by regulatory organizations
• Up-listing to NYSE MKT (S-1)• Public Offering
2010
2011
2013
2014
2015
• An idea
• Incorporation
• Seed Funding
• Reverse Merger (RTO)• Series A Preferred
Pathway to Uplistng on the NYSE
An IdeaSolve a problem that matters – Unlimited!
Multi-billion market opportunity Identify big unmeet need Technical breakthrough Establish your core competence Get others excited
Pick your partners wisely
Founder roles Key initial employees Sweat equity commitment
IncorporationC Corporation Find a good, low cost attorney Incorporate in Delaware (Preferred) Choose the correct capitalization structure Identify the right ownership between founders & option pool
Founders’ agreements Founder employment agreements, vesting terms Invention / IP and confidentiality protection Consulting agreements tied to stock options for key employees Establish compensation metrics early IRS reporting
Seed FundingConvertible notes
Need the 1st check from a qualified independent investor Leverage personal local network for finder’s program Sell near term liquidity value proposition from an OTC listing Receive free trading shares with Reverse Merger (RTO) Discount on Series A Preferred TBD
Reverse Merger (RTO)OTC public company listing
Identify a clean, non-operating shell Shell filed S-1 and Form 10 registration over 1 year prior Shell held to high standards of governance Appropriate share capital structure Leave no shares behind with the shell owners Change name, symbol, incorporation & re-capitalize
SEC Reporting
First SEC reporting documents Super 8-K & Form 10-K Establish external reporting capability Choose qualified auditors for SEC reporting Strong Controller required
Series AObtain a lead investor
Preferred shareholder rights with warrants at 2X price Commitment to uplist when able to meet requirements Interest earned until uplist in form of additional shares Finder’s fee to leverage network of qualified investors Rolling closes to fund operations, 8-K filings
Ensure sufficient funds to pursue uplist strategy Raise enough cash to meet the uplist date Build out the board of directors (BOD), hire CFO Select governance committees Choose qualified external lawyers for uplist run
Uplisting to NYSE MKT (S-1)NYSE MKT: Public up-listing requirements
Stock price: minimum $2.00 per share Market Capitalization: minimum $50 million Shareholders: minimum 400 Shareholder Equity: minimum $4 million S1 registration statement, public offering
Banker-led public offering Select institutional lead bank, retail coverage co-managers Conduct a non-deal roadshow prior to S-1 filing Analyst coverage is a must from lead bank 180 –day lock-up is essential Raise minimum 1 year capital needs Allow minimum 4-6 months for the uplist process
S-3 (Shelf Registration)Requirements for continued capital raises Minimum 1 year public company history to meet early
qualification
Reporting compliance while public OTC listed company on filing history
Consider ATM option with “shelf,” direct private placement, or banker-lead PIPE
3 year credit line for additional capital needs
Goal to reach >$75M market cap to avoid capital raising limitations
Follow-on Offering
The “Real” IPO
Attract next tier investment banking firms Focus on increasing institutional shareholder distribution Target marquee funds Increase research analyst coverage Increase public float
Series “C” round of common stock, no warrants Small cap valuation > $5 per share Raise enough cash for 2 year capital needs Timed with important press releases and milestones Significant ROI for investors
Follow-on offering
Expansion and GrowthBuild company for the long-term Consider M&A expansion plans Select a good IR firm to build company awareness Seek major partner arrangements Achieve required business milestones Build out key functional areas and infrastructure
• Access to public markets for capital• Possibility to raise capital at higher valuations • Retainage of founder control • Enhance company’s image• Attract and retain talented employees• Liquidity to founders, venture capital investors and employees • Ability to acquire other businesses with stock and cash
Benefits
Challenges• SEC regulatory compliance• Pressure of performance• Restriction on insider sales• Investor relations as well as analysts engagement • Vulnerability to hostile takeovers • Volatility and fluctuation of public company price and valuation• Litigation risk
Why Go IPO
Lessons LearnedThings to remember• “Sweat equity” – Your time and money is valuable• “Skin in the game” – Take care of your employees• Be careful who you take money from• Just as hard to raise $50K as $500K• Don’t give up control of the company you built• Stay focused, don’t panic• Don’t cut corners• Remember the long term vision• Good execution, good things will happen• Success is the ultimate goal
top related