Equity Partners Fund SPC (“epfundspc”) is both a segregated portfolio company and has several portfolio companies through which it makes fundings on a global basis based on price, volume and liquidity. epfundspc does not provide volume, liquidity nor investors, this is the responsability of the company.
epfundspc generally looks to fund amounts from $5 million up to $100 million in listed companies with consistent trading volumes for a variety of activities including working capital, acquisitions and other growth opportunities.
epfundspc focuses on equity investments in public companies with market capitalizations under $1 billion, as well as private companies that will be listed on a securities exchange within six months of a funding commitment.
epfundspc has no outside investors and is considered a private company run by its principals, similar to a merchant bank that invests its own capital and as such it is seeking capital appreciation through the identification and funding of liquid growth companies.
To date epfundspc has been approached by a number of companies with interests as diverse as manufacturing, construction, professional services, healthcare and finance who are all looking for growth or acquisition funding which is difficult to find given current global economic conditions.
epfundspc investment guidelines, apart from a company’s size and liquidity, require them to have exceptional management and long-term sustainable growth opportunities with the potential to achieve significant milestones over a developmental period.
” The vice-president of Liberty Victoria, Anne O’Rourke, said journalists should not break the law. “Hacking is a criminal offence – whether it’s in the public interest or not it is illegal,” she said.”
what dear readers do you think? are journalists getting out of control in their bid to find stories? Do you think its okay for journalists to hack into your computers and files?
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 first round financing from private equity investors for IPO or capital expansion.
It is important to understand First Round Financing terms and conditions that your investor will likely use in structuring their investment in your company.
There are different nuances to consider depending on whether you are talking with a PIPE Fund, private equity firm, angel investors, or hedge fund investors. These investors tend to use different structures and even have different exit strategies.
You have to think of financing like a chess game. You have to think 2 or 3 steps ahead. Most companies don’t raise venture capital financing in one round without the need to raise financing in two or
three subsequent rounds. First round financing therefore becomes important for several reasons.
1. If you give away too much equity (your company’s common or preferred stock) in the first round, you have greatly diluted the ownership position of your Management Team. For instance, if you give up 45%,
and you are likely going to need subsequent financing, then the result will probably mean giving up voting control of your company to raise more capital. Of course, if you can convince subsequent round investors to give you Super Preferred voting rights then you may be able to maintain voting control, even if you lose majority ownership in the company.
2. Venture Capital firms typically like to control the whole deal. This means if you give up to much in
the first round financing, you will be at their mercy in subsequent rounds. They will take advantage of the fact that you are desperate for more cash for the company. They will also have the deal structured so that if you refuse to give up control in a subsequent financing round, they will be able to take over the company and replace management. They can do this by structuring the financing terms with a number of different “default clauses”. For instance, if you default on a payment or don’t meet certain goals that have been
established.
Without this you will never succeed in what you are doing and by accomplishing this there will be a lot more weapons in your arsenal at your disposal.
So lets review the facts and get on with the mission in this case.
There are different nuances to consider depending on whether you are talking with a PIPE Fund, private equity firm, angel investors, or hedge fund investors. These investors tend to use different structures and even have different exit strategies. thank you
alvin donovan: DAX, IPO, Initial Public Offering, private equity, Frankfurt Stock Exchange, Deutsche Boerse,
investment banking, investors, equity capital, capital raise, public listing, alvin donovan
even with the mining tax, the financial crisism, the govt on the fence on both sides, aus still has something special eh, makes you proud to be australian.
anyway, enough of the tear jerking
tims book is a good read surfari its a story about him, his wife, son and daughter doing
“the lap” which is the road trip around the whole coast of australia.
okay im jealous!
he got a free rav, a free camper, got paid for the gig to take his family suring the entire coast of australia.
plus did i say he got PAID for it!????
anyway depending on where you live, and i mean no offense to any non aussies, you may or may not agree with tims statement that aus is the best country at the best time in the planet but you most likely would agree that seeing how tim got paid for the gig that it is the best time for him to be an aussie in aus eh.
it was an easy read, in big type for older blokes who strain at the screen all day, not many too big words but i did have to look up the word skerrick (twice)
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 to assist you in evaluating the types of capital funding solutions you should be seeking from the various private equity institutional investors you are in contact with.
If you arranging a capital raise or talking with investment bankers one thing to consider is: should you raise all the cash now or over time? Like many things in equity capital markets, the answer is: It depends. Cash raised all at once from private equity investors is sometimes referred to as “fixed pricing” or a “conventional equity raise” by investment banks. Cash raised over time is sometimes referred to as “variable pricing”, “equity line” or “special purpose placements”.
Which format you choose really depends upon the capital raising situation of the issuer in terms of both their stock and business operations. Research based on Case studies of hundreds of companies in over 25 countries discovered that variable pricing for an equity issue works very well in certain circumstances and does not work well in others.
1. The issuer is using the proceeds to grow the business and it’s EBITDA.
2. The funds are not spent all on the first day but rather over a developmental period, typically 12 to 18 months.
3. There are significant milestones that can be accomplished during the developmental period that can be announced to the public.
4. The stock price is likely to increase due to business progress during the period of the use of funds.
5. The issuer determines when they take the capital.
6. The issuer needs the capital committed as soon as possible.
Fixed Pricing works better when:
1. All the capital is expended at closing.
2. The use of proceeds is to restructure fixed price debt.
3. The issuer’s future business prospects are not positive.
4. The issuer does not need the capital for several months and has enough time to identify appropriate institutional investors and have them conduct due diligence.
Example of Cost Savings
Variable Pricing can offer substantial savings to the issuer in terms of cost of capital under the proper circumstances.
My friend and colleague is retired RCMP Inspector, Bill Majcher. Bill is one of the most celebrated undercover officers in the history of North America and has gone from infiltrating Colombian cocaine cartels, to taking down Russian mob owned banks to spending time in jail with terrorists accused of the most horrific crimes.
At the time he left public service he was responsible for overseeing the protection and integrity of Canada’s capital market system on the Canadian West Coast.
Like my friend Bill Majcher always says “just do the math”. A numerical example perhaps best demonstrates this:
Assumptions
$40 million market cap $5 stock price at time of funding (8 million shares outstanding) $10 million funding Proceeds used over 18 months Proceeds result in EBITDA increase of 40% in ~18 months Increase in share price proportionate to increase in EBITDA, so share price at the end of 18 months is $7.
Fixed Price Financing
At 15% discount to current price, fixed price for $10 million is $4.25 per share 2,353,000 new shares issued in financing at $7 per share in 18 months, cost of newly issued shares is $16,471,000 ($7 * 2,353,000 shares)
Variable Price Financing
Assume proceeds drawn quarterly and progress towards 18 month target announced quarterly with stock appreciating proportionately. Stock issued in the financing at a 10% discount to market price. Thus, stock issuance price is:
Q1=$4.50
Q2=$4.86
Q3=$5.22
Q4=$5.58
Q5=$5.94
Q6=$6.30
Average price of stock issuance is therefore $5.40 1,852,000 shares issued to finance the $10 million at $7 per share in 18 months, cost of newly issued shares is $12,964,000 ($7 * 1,852,000 shares) Thus, in this simplified example, the issuer saved $3,507,000 in cost by using a variable price format.
This represents 35% of the total amount funded in the transaction. These savings do not include the savings from lesser warrant coverage with variable pricing. The total savings can be even greater if the stock of the issuer is undervalued to start with and/or appreciates more rapidly.
Why Variable Pricing Works
Variable Pricing works because of the stock market’s uncertainty about the issuer actually delivering future results. Typically with Fixed Pricing, the funds are delivered up front and then the positive benefits from utilizing the funds appear later over a period of time, say 12-24 months.
At the time of funding, the delivery of these future benefits is uncertain to outside investors. So the stock price at the time of funding reflects this uncertainty discount, and the issuer pays the cost of the discount.
With Variable Pricing, the stock price at the time of funding is after interim results have occurred and closer in time to immediately pending results, so the uncertainty discount is less, presumably reflected in a rising stock price.
Because of the higher stock prices during the development period, the issuer by using a Variable Pricing structure is in effect selling stock at a higher average price.
The important components to a Variable Pricing structure are that
(i) the funds are absolutely committed up front so the issuer and the market knows the issuer has the funds to complete its development program, and
(ii) the issuer determines when to draw the funds in its sole discretion, which inhibits short traders as they are potentially trading against favorable interim results and further do not know when or if additional stock would be coming to the market to cover their position.
How To Take Advantage
For issuers whose stock price is likely to appreciate during the period of the use of funds because of progress in the underlying business, a Variable Pricing structure can be ideal.
i know some pretty security savvy ppl who have had their twitter, gmail etc hacked over the years. i have had it happen 4 times over the last 6 months. one twitter hack was when i clicked on a tweet someone sent me, how the person got into my gmail is a mystery (plus my gmail was shut down for 24 hours each time it happened!) but we did have someone abscond with one of our mobile phones with our passwords so maybe that was how they did it.
so when someone steals your identity how can you prove its you?
what can you do when others post as you on the internet? what about when they hack into your email account and start sending crazy flames to your friends and colleagues.
I was shocked and horrified to learn that I had challenged one of my best friends to a fight!
(besides the fact he is 30 years younger and much fitter than me he thought I was serious!)
Why not use that clever ability to make yourself look good and to market your own services, there is room enough for everyone to work together.
Why not use your photoshop abilities for good, not to follow me around taking my photo with my mouth open
They say that immitation is the sincerest form of flattery but im not flattered in this case.
yes i know that outlook it prolly best but the problem with outlook is the outgoing smtp server issues which no matter what they say, STILL is not solved.
I had a case where I had to rush on a family emergency and found that all of the emails I sent for over 1 week never got sent to some and sent over 25 times to others using a certain smtp service i wont mention here.
any advice greatly appreciated ill post it to others on my following database its getting pretty large now thanks to you
