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Consulting Investment Banking Firm Looking For A Fund Interested in High Secured Returns
We are a Merchant service provider and are looking for a fund who can provide loans to our potential clients.
Estimated investment - $1m - $2m per year.
Estimated time to liquidate investment plus profit -2 to 4 years.
Estimated returns - should average about 7x
We take companies public, and we charge $25,000 to $75,000 for our services so we need a fund who can lend $25,000 to $75,000+ to each client we take public. We have been doing this for 30 years and can provide references on our business. (We are not mentioning our name in this preliminary information as our business is very competitive and we do not want our competitors to know what we are doing.)
The loans you make to our clients can be secured by a public vehicle that is worth approximately $400,000 upon completion. It usually takes 9-12 months to complete the process, but sometimes it is less and sometimes longer. We can give you a completion guarantee if needed.
In addition we can arrange it with our clients that the lender gets a 5% equity position in each public company on top of the loan.
Why would this be a lucrative business relationship for you? Because short of fraud and/or theft and/or acts of God, you can’t lose your invested money. And the returns can double to ten times your money in as little as 1 to 5 years.
How does this work?
Well, When you lend money to a private company to go public, not only do you get your money back via the loan, but we get you a percentage ownership of the public company for your investment of putting up the fees and covering the costs of taking the company public. Unlike investing in a private company, when you are the investor in one of our companies going public, we also get you the public vehicle itself as collateral.
The public vehicle is worth about four times what you invest to take the company public. Public vehicles are like owning the real estate for a business operation – like say a restaurant. Once listed, public companies have value independent of the success or failure of the business within the public company. So your investment ends up being very much over collateralized. In addition unlike a private company investment, your stock that you acquire will be free trading stock after the company is public.
Public companies typically cost about $75,000 to $150,000 to create. But once created the public vehicle (independent of the business within it) can sell for from $300,000 to $500,000 in cash PLUS a percent of the stock in the company that buys the public vehicle. (The old company is taken out and the new company is put in – sort of like a change of tenants for a real estate building.) Public company vehicles when sold can net anywhere from $250,000 to $2,000,000+ profit for a $75,000 investment. Even on an incredibly bad deal you should still always at least double your money.
When we take one of our clients public we are building a public company for them. “Building” a public company, is much like “building” a restaurant business from the ground up.
For example, if you put up $75,000 to build a restaurant and the deal was that you got your money back + say 5% ownership in the business and the whole investment was secured or collateralized by the restaurant building and real estate (and say this was worth $300,000), you would not have to worry about whether the restaurant business was successful or not. If successful you would get your money back + 5% of the income from the successful business forever. If not, you would get the restaurant building and land worth $300,000 that you could sell and make a 400% return on investment. Either way you win.
Now these kind of real estate/business deals are hard to come by because you usually can’t get $300,000 of collateral for a $75,000 investment, but these kind of deals are numerous and easy for us to find for you in the "going public" arena as this is our business for the last 30 years.
For a $25,000 to $100,000 investment you can get
· Your money back ( a loan secured by the public vehicle as collateral) and
· A percentage ownership in the company (usually around 5% – but this will be public “freely tradable stock after the company becomes public and starts trading)
· A time limit for the company to pay you back – if they don’t, then you get to repossess the collateral (the public vehicle is currently worth typically $300,000 – $500,000 in cash + you can retain your stock in the company which could be worth another couple of hundred thousand to a couple of million dollars when the new company takes over and is successful.)
· Worse case scenario (outside of fraud and acts of God scenarios) – the company is unsuccessful and doesn’t pay you back. You repossess the public vehicle and sell it for $300,000 and make $200,000 profit for your $100,000 investment. The next company is also a failure and your stock is worthless and you never see another dime from your investment. It took you three years to realize a 200% profit.
· Best case scenario – Well there are a couple of alternatives. 1) The company is successful and pays you back with interest the money you invested. You sell your stock and make another $200,000 to $2,000,000 dollars on top of that. (Unless it turns out to be the next Apple or Microsoft and your stock is worth a gazillion dollars!) Or 2) the company fails. You repossess the public vehicle. [We have set this up so that it can be done in 1 day by the way.] You sell it for $400,000 [We find the buyers and handle the sale for you] and make a quick $300,000 profit + you retain stock in the company you sold and that stock makes you another $200,00 to $2,000,000 profit on top of that. (Unless again it turns out to be the next Apple or Microsoft and your stock is worth a gazillion dollars! For reference, though, of actual upside potential, the most any of our clients have ever reported making on a subsequent sale of a 4% interest in a company they sold is $12,000,000.)
So that is how it works, we are looking for a fund that could place up to $2,000,000 a year in the above type loans.
If you think you are interested in becoming a lender to our clients as described above give us a call today.
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