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I am looking to buy existing businesses with a positive cash flow. Earning at least $250,000 per year, but the sweet spot for me is businesses earning $1m+ a year. I will pay a premium if you will give me my terms. Below are the details of my offer and you can contact me after reading this if you are still interested and I can give you more info and discuss further.
I will pay your fair market value top asking price plus a 25% premium if you will take between 10% to 50% down (depends on a number of factors) and take a note for the balance payable with monthly interest (interest rate negotiable) due in three years. The note will be secured by stock in a public company.
First thing people ask me is "Why would you do this? It sounds too good to be true." and they get all suspicious.
No this is not a Nigerian scam!
But rather than wasting a lot of time on the phone explaining why this is a good deal for both you and me, (because it in not right for everyone, just certain people) I will explain it here and you can read it over and over again until you get it rather than trying to remember everything I say in a phone conversation.
I am an investment banker. I buy companies and take them public. A lot of people don't realize you can take small companies public on the OTC Market in the US and you don't have to be a big company making 100+ million a year to go public. In fact you can go public and raise money on the OTC without any income at all. However that is not my formula. I am looking for companies that are profitable and making at least $250 k a year income.
You see public company valuations are much higher than private company valuations, so I am not going to try to hide this fact from you as you can find it out for yourself and figure out how I make money on this deal. I will be upfront and tell you I will buy your company at 125% of the current fair market price because I will them put in it a public vehicle and increase the valuation at least 4x and possibly as much as 10x to 20x or more.
So it is simple math at even the small 4x valuation. I will sell off 40% of the company's stock which will net me 1.6x the fair market value out of which I will pay your 1.25x, put money in my pocket, and still own 60% controlling interest in the company.
This whole process will take me about 2-3yrs to complete. And I will collateralize your note during the term of the loan.
How is this a good deal for you?
1) You get a high sale price above market.
2) Unlike a private sale with a note attached, you will not have to worry about my running your business into the ground and not being able to pay you in 3 years. Why? Because with a public company and public stock I will have access to top management that your company can not afford right now. They will work cheap for me because top execs want and work for stock bonuses in PUBLIC COMPANIES. It is one of the advantages of a public company. I will not have to personally manage the business as I can hire top management - someone as good as you to take over the reins of managing the company. (Of course I will ask you to stay on for about six months to a year so we can groove the new exec in, but it won't take any longer than that.)
As a public company I will also have the ability to raise money to pay off your loan in the event something did go wrong with the industry you are in or the management I hire and mess up my plans.
3) I will collateralize your note with stock in the public company to hold until I pay off the loan.
So in the final analysis you get an above market sale without having to worry about whether you will get paid in 3 years. I get a company that I can fully delegate to be run by others, that I will own 60% or more in after I pay you off your 125% of market value purchase and put some money in my pocket.
So if you are like some people who read this you might be thinking by now, "I don't need this guy to buy my business, I can just do that public thing myself and get 160% of market value, retire with fully competent management taking over and still own 60% controlling interest in my company, and if anything happens to me my controlling pubic stock interest can easily be divided amongst my heirs without destroying the business I developed for all these years."
And you are right, some of you won't need me and can do the above all by yourself, if you know the right people, and aren't looking to immediately retire. Hell, write me and ask and I will even introduce you to the attorneys etc. that can do the legal process for you if you want to go that way. I am not worried about you guys. More power to you if you can do it yourself.
You see I am interested in those of you who really need me, those of you who are ready to retire and that is it - no more work. You see I will do all of this for you, you will get a more than fair return, and you will willingly allow me to make a profit for putting this all together.
SO that is it. That is what I am offering and if you are interested, get back to me with a one page description of your company and financial summary - assets and profit and loss for the last three years. Nothing fancy - just a one page summary. If you are not interested, thank you for reading this and have a good life. And if you are not interested in my offer, but would like to go public and do the above yourself, more power to you. I admire your spirit and you too are welcome to email me with a short description of your company and I will make introductions to the appropriate people.
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