1. even if we stopped all the pollution today/now we would not see any noticeable difference in our childrens lifetime so we will never SEE a result.
2. but we have to PAY for it now- for example in aus when they first talked about introducing a carbon tax we were told its the same price as buying a meat pie a week. i thought- okay i can wear that. but now ppl are saying well we have to pay all this money and it will NOT make a difference to saving the environment so its a waste?
3. which brings up another point- how much of your weekly pay packet would you pay, how much would you invest of your own or your firms capitail under the two separate conditions:
a) no matter how much it is it wont make any difference to the saving the planet.
b) you were SURE that however much it is will save the planet for sure but not in your lifetime.
c) you were SURE that it would save the planet and you would see a difference in 2 years.
as private equity investors- how much of your own $$ would YOU invest and what do you think about the carbon tax and arguements?
alvin donovan, DAX, IPO, Initial Public Offering, private equity, Frankfurt Stock Exchange, Deutsche Boerse, investment banking, investors, equity capital, capital raise, public listing
Whether you are a company thinking about an Initial Public Offering (IPO), seeking private equity investors, thinking about a capital raise there are a few important things to consider.
Having been around the investment banking and public listing arena in the USA, Australasian markets, or the Frankfurt Stock Exchange (Deutsche Boerse or DAX) has taught me a few things.
The purpose of this article is discuss how investment banks work and operate to raise capital from private equity investors for IPO or capital expansion.
First, let’s look at who Investment Bankers are so you can understand what makes them tick. Most Investment Bankers are former retail stock brokers who started out on Wall Street with some of the major Brokerage Firms.
There job was basically to sign up as many accounts as possible and buy and sell stocks for clients. From there they moved up to the Investment Banking department of these firms.
Investment Banking involves raising capital for private and public companies. The larger brokerage firms are constantly on the lookout for new companies. They want to raise Venture Capital for these companies and establish what they hope will be a long term relationship.
It is a very good idea for your Management Team to establish relationships with these firms because their assistance is very valuable.
Now we all know that Investment Bankers Investment Bankers want to make money just like everyone else, but let’s examine a typical fee structure. They usually charge a cash fee of 10% of the amount they raise and 10% of that amount in stock.
If your company is private then they do an evaluation to figure out the number of shares they will receive. These shares also come with Registration Rights. This requires the shares to be registered with the US Securities & Exchange Commission, if and when the company becomes publicly listed.
Now that may seem like motivation enough, after all if they raise $2,000,000 for you company, they get a $200,000 fee and stock in your company as well. If they close a few deals each year those numbers sure
add up.
But they are not just in the game for one time deals. They usually require a right of first refusal to raise you subsequent financing during the next twelve months should your company need it. They would love to
raise money for the same company 2 or 3 times in the same year. If your company is doing well, the Investment Bankers simply use the same funding source to keep investing in your company.
Investment Banking firms also try to get a monthly cash fee for advising companies they represent on securities matters.
These matters can include corporate structure or reorganization, search for quality board members, referrals to securities attorneys or auditing firms, as well as advice and help to become a publicly listed company.
Lastly, Investment Banking firms are involved in Mergers and Acquisitions. There are big fees involved in this area as well. They may even recommend your company purchase another company in a related field. This could turn out to be a very strategic move for your company, and of course the Investment Banking Firm will make its usual fee. But they may also own stock in the other company you will be acquiring, because they may have raised capital for them at one time and helped them to grow.
There is nothing wrong with that, it may be a great move for your company to make. I am just trying to illustrate that Investment Bankers are highly motivate. They want to make lots of money just like most people. The best way they can accomplish that however, is for them to find good companies
that they can raise capital for and help them grow. Hopefully, your company is one of those.
DAX, IPO, Initial Public Offering, private equity, Frankfurt Stock Exchange, Deutsche Boerse,
investment banking, investors, equity capital, capital raise, public listing, alvin donovan
Whether you are a company thinking about an Initial Public Offering (IPO), seeking private equity investors, thinking about a capital raise there are a few important things to consider.
Having been around the investment banking and public listing arena in the USA, Australasian markets, or the Frankfurt Stock Exchange (Deutsche Boerse or DAX) has taught me a few things.
The purpose of this article is discuss hedge fund formation for private equity investors for IPO or capital expansion.
As a result of state and federal regulatory issues, Hedge Fund Formation has become more complex over the years. Going back just 10 years, most of the investing public knew very little about hedge funds.
Now, with the internet, as well as heightened interest on the subject, anyone can find large amounts of information on these once secretive investment vehicles.
Forming a hedge fund takes careful planning, as well as a strong understanding of the regulatory issues involved both at the state and federal level. With good legal advice in combination with a knowledgeable CPA in the hedge fund field a hedge fund can be formed to suit the specific needs of the hedge fund manager or management team.
When looking for a Hedge Fund Attorney to advise you, keep in mind that you need to specify what services you are looking for, which will affect the involved and the fee you will be charged.
Also, just like most things, whether it be a fee charged for accounting work, carpentry work or consulting work, legal fees are not all the same.
Make sure that whatever attorney you use, he or she is experienced and has formed several hedge funds and advised them as clients. Also, you should get a retainer agreement in writing form the attorney. That retainer agreement should specify the legal work that will be performed and even the legal work that will not be performed.
Hedge Fund Attorneys should be knowledgeable on all aspects of hedge fund formation including such issues as state and federal law exemptions for the investment manager, filing of Form D and state blue sky filings, broker-dealer exemptions relative to capital raising efforts, preparation of the offering memorandum, SEC view on proper hedge fund website setup, and advising the client on the choice of a prime broker, administrator and auditor.
Hedge funds can be broken down into two categories:
1. Domestic.
2. Offshore.
There is a great difference between the domestic and offshore fund and it is important to fully understand both structures and the reasons for each. It is not simply the domestic fund takes in US investors and the offshore takes in non-US investors.
Be wary of any businesses or consulting firms that make it sound easy and for a low flat fee are willing to provide you with an offering memorandum (also known as a PPM) and all the tools you need to set up an offshore fund or domestic fund.
Domestic hedge fund formation is almost always in the form of a limited partnership. The investors purchase limited partnership interests rather than shares of stock. By purchasing limited partnership interests the investors are protected from loss in the event of a lawsuit against the hedge fund,
however, they are only limited to loss of their limited partnership interest.
There is also a benefit in taxation when an investor is a limited partner. In the United States, investors face double taxation if the fund is set up as a corporate entity, since there would be tax at the corporate
level and tax at the individual level.
As you probably already know, Hedge Fund Regulation is just around the corner. The SEC is looking at several proposals by Congress. Some of the main issues being discussed are the following: – Mandatory registration of managers (with assets over $50MM); – Mandatory record keeping; – Mandatory audits; and – Oversight of derivatives and leverage used by hedge funds.
Offshore hedge fund formation is almost always in the form of a corporate entity. The choice of jurisdiction is important since the fund manager will want to choose a tax free jurisdiction so the investors will benefit from such a structure, however, they may not be U.S. persons since that would defeat the purpose of the tax free jurisdiction. The Cayman Islands and the Netherlands Antilles seem to be two of the more popular
choices for offshore formation.
It is not uncommon for newspapers, even small local papers, to carry at least one article that mentions something about a hedge fund. Large amounts of capital fund these investment vehicles. Investors
include wealthy individuals, trusts, institutions and pensions.
It is estimated that over one trillion dollars is now managed by hedge funds. Although the current economic crisis may reduce that number it is very likely that once the economy settles down again, assets will again flow into hedge funds in large amounts and hedge fund formation will again pick up.
DAX, IPO, Initial Public Offering, private equity, Frankfurt Stock Exchange, Deutsche Boerse,
investment banking, investors, equity capital, capital raise, public listing, alvin donovan
