Capital Sourcing

What Investment Banking Services Do We Provide to Raise Capital for Microcap Clients?

Through Exemplar Capital LLC, our FINRA registered broker dealer, our investment bankers will make introductions to our network of small venture capital firms, small investment banks, angel investment groups, high net worth individuals, and other institutional investors. Unlike other firms in our industry, we charge a very reasonable monthly retainer fee for our service, and our success fee compensation is highly competitive in the investment banking industry.

We work with our clients to evaluate the key factors that institutional investors will consider in making an initial investment determination:

    • Investment Banker Introduction to Investors: After making certain that our client’s message properly communicates the value of their offering (the “message”), it is our job to sift through our database of approximately 5,000 investors to find the ones that will be most receptive to our client’s offering. Unlike the multitude of unlicensed “funding intermediaries,” inexperienced broker dealers, and newly formed investment banks, our database isn’t comprised of purchased leads, it has, instead, been largely created through the establishment of relationships over our broker dealer’s thirty years in business–it was formed in 1980. Next, we submit our client’s investment package only to investors that we believe would potentially be interested in that particular client offering and follow up with each prospective investor on a weekly or periodic basis. Early indications of “no interest” are expected, but the feedback we receive from investors is indispensable in assisting us with ways to modify the deal structure and message, as is necessary to sell the offering. Our offerings are made mostly introduced to other broker dealers, small investment bankers, and small institutional investors.
    • Institutional Quality Business Plans: Approximately 60% of a client’s offering message is conveyed through a well drafted institutional quality executive summary and business plan. The remaining 40% is communicated verbally by our investment banking team. We will craft institutional quality business plans and executive summaries or we can greatly improve existing materials to better suit institutional expectations. However, we cannot overemphasize that a business plan is a necessary supporting document in an institutional investment package.
    • The Overlooked Offering Executive Summary or Pitch Book: Most companies seeking institutional funding experience repeated and frustrating rejection. Our experience has shown us that there are generally two reasons for this:
    • Too many companies try to fit round pegs into square holes: That is, most companies seeking capital don’t know which of the thousands of institutional investors in the country might have investment criteria that match their business type. Each of these institutional investors typically maintains a very narrow set of criteria – a “box”. By way of analogy, it is a waste of time and energy to submit a retail product company to an institutional investor that only invests in technology. Our years of experience in the industry and our deep contacts provide us with access to the investment criteria of hundreds of institutional investment firms throughout the country.  We know which firms may have an interest in your business.
  • Companies are just plain wrong to assume that any business plan and executive summary is sufficient to create a level of interest on the part of institutional investors. Companies have too many deals and too little time to sift through sterile, commonplace, and uninspiring documents, such as a majority of executive summaries and business plans. Companies must have materials that truly sell their business, not just describe it. Additionally, the materials must clearly and visually describe why our client’s business proposition is different from the clutter of other deals in the market. We provide institutional quality selling packages (ie. executive summaries and business plans), which incorporate your company’s value proposition, inputs from management, and high level selling approaches, to create a tool that is designed to inspire investor interest in your business. Moreover, our consulting team has successfully used this proven approach in raising over $200M in capital over the last three years. So if you ask why you might need or want it, the answer is simple–because it works!

Our business consulting team works closely with our client companies to create the above described business planning and presentation materials. In the alternative, we can simply attempt to improve the quality of your existing materials but  our experience is that this often proves to be more difficult (and hence, more expensive) than creating new materials.

Additionally, described below are four capital raising infrastructures that can be installed or utilized to assist companies in raising capital outside of the institutional investor community. The following are some of the “self help” approaches to raising capital that we can employ. We refer to them as “self help” because they don’t require “buy in” from any institutional firm or investor. Instead, the company would be guided by our management consulting and legal team to sell investments in its business directly to the retail investor market. There are wonderful control advantages to these options:

Issue Company Securities Through A Public Offering

We will create a public offering and guide your firm in issuing and selling these securities.

This method of distribution provides our clients with a high degree of control and flexibility in the sale of its securities. Clients will be able to sell to the public at large without being constrained by “general solicitation” and “accredited investor” restrictions.

Issue Company Securities Through A Reverse Merger Into A Public Shell

We will assist in securing a shell, crafting a public offering, and guiding your firm in issuing and selling the securities through a private investment in public equity (“PIPE”) and later through the public markets.

This distribution option provides the same flexibility as one would find in a traditional public offering, but this method of distribution is faster. Additionally, our firm will utilize its network to attempt to provide PIPE financing to its clients. We are able to assess the availability of such funding prior to accepting an engagement.

Build A Single-Sponsor, OR Join An Existing Multiple-Sponsor, Selling Infrastructure

We will guide and manage the creation of an affiliated broker-dealer relationship and will build a captive wholesale and retail sales force for your organization. In the alternative, we may introduce your organization to an existing multi-sponsor selling infrastructure, seeking a synergistic match between your offering and that of two or more other sponsors.

This avenue is somewhat time intensive at the onset but provides the ultimate control in raising capital. Unlike distribution through an existing network of national broker-dealers, the client will have a level of capital raising control and sales dedication that can only be created through this type of infrastructure. Simply put, it is a great feeling to know that you can meet your capital needs without having to “beg” broker-dealers to sign selling agreements.

Distribute Offerings Through An Established Wholesale Infrastructure Of National Broker Dealer

We can assist your company in obtaining a satisfactory due diligence review and develop a marketing infrastructure that enables distribution through a nationwide broker-dealer network.

This distribution method is one of the least expensive methods and one of the fastest. However, the challenges that our clients will face with this approach is that they will have to undergo an extensive due diligence process, and the threshold for most established broker-dealers to agree to execute a selling agreement is relatively high.