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Let Us Help You To Raise Up To $12 Million Per Year Through Private Stock Offerings
Our exclusive computer software programs print out all the legal documents you need to get the money you want for your new or expanding business. Take Advantage of our over 30 years experience in stock offering software and review services.
Our software products now offer all 5 methods of raising capital.
- Regulation D 504 - Raise up to $1 million in a twelve month period.
- Regulation D 505 - Raise up to $5 million in a twelve month period.
- Regulation D 506 - Raise up to $12 million in a twelve month period. (Can raise over $12 million with additional registration)
- Limited Partnership Offerings - Raise unlimited amount of capital.
- SCOR Stock Offerings - Raise up to $1 million in a twelve month period.
If you are ready to find out how our software packages can make it easy for you to acquire the capital you need, visit our software overview page now. Or call us for more information on which stock offering will best fit your needs. We are here to help.
If you are unclear on the Basics of Private Placement Memorandums (PPMs), read on. If at any point you have questions or would like more information or a customized recommendation, please give us a call.
What Is A Private Stock Offering?
There are two basic types of stock offerings: public stocks and private stock offerings. Public Stocks are traded openly on the New York Stock Exchange (NYSE), the Pacific Stock Exchange, NASDAQ, and over the counter (OTC). Private Stock Offerings provide a powerful alternative to raise capital for business ventures. While a lesser known option, private offerings are a great way to raise necessary capital. With the right tools, it has become simple to produce these private offerings. This is where Cambridge Financial Services can help you. With our software packages, we can provide the information and resources you need to complete your private offering. In addition, we are available for Financial Consulting and Stock Offering Review Services. We would be happy to prepare your stock offering and/or review your stock offering. Please call for pricing.
To simplify the process, a private placement is EXEMPT from federal registration. In 1982, the SEC adopted Regulation D, which set forth objectives and rules for exemptions from federal registration. Offerings exempt under rules 504, 505 & 506 have become the most common methods for small and growing businesses to raise capital from private investors.
How Do Private Stock Offerings Work?
Private offerings offer the perfect solution for entrepreneurs looking to raise significant amounts of capital. By selling only 15-45% of stock in their venture to wealthy private investors and institutions, they retain complete control of their company and the money raised.
Investors are in the business of looking for opportunities where they can purchase stock for a low price now and sell for a higher price in the future. They understand the risk involved and are willing to take the risk for the potential payoff. They look for opportunities where stock can be purchased for less than $10 per share now with the possibility of being sold a few years down the road for $50 to $100+ per share when the company becomes public or is acquired.
There are several things needed to pitch an opportunity to prospective investors. The following items are necessary to raise capital through a private stock offering:
- Since you will be raising money by selling stock in your company, your business will need to be incorporated before the stock offering is completed, as Business Incorporation is a requirement for Private Stock Offerings. However, you can get started with the stock offering preparation before being incorporated. The sooner you get started with the preparation, the closer you will be to raising the business capital you need.
- Most private offerings involve a Private Placement Memorandum (PPM), which contains important legal language that satisfies all requirements of the SEC, state and federal laws. It should also include an overview of your business plan that will let potential investors know what you do and what will make your business successful. The offering will need to include an opening date and closing date for the offering as well as terms and conditions. The private placement memorandum (PPM) document is usually between 55-75 pages and should be put together in a certain way to be sent to investors. There is a specific format that should be followed when creating the offering documents. Cambridge Financial Services is familiar with this format and we can provide the software to simplify the process. In addition, we offer Stock Offering Review Services, so that you can benefit from expert advice before sending your offering documents to investors. Please contact us today to further discuss these options.
- So now the offering document is complete. The next step is locating investors for your venture. In certain cases, you may be able to sell stock to your friends, family and business associates. However, this is not always an available option. For the majority of private stock offerings you are not allowed to solicit or advertise, which makes direct contact to interested investors the key to successfully raising the capital you need.
- If you are not one of the lucky ones who can sell stock only to friends, family and business associates, you will need to contact investors. In a private offering situation, you will deal directly with the people who will be investing money into your venture. The best way to do this would be to send completed Private Placement Memorandums (PPMs) or summary letters to a list of investors. You may be wondering where you can get a list of investors. This is an important question as finding the right investors is key to a successful private stock offering. We help you over that hurdle by providing a list of active, accredited investors with our software packages.
- Getting the Money. After receiving your offering documents, investors may contact you directly to purchase stock or they may contact you to find out more information about the opportunity, your company or your business plans.
If you are using a minimum/maximum approach, no money can be spent until the "minimum" amount stated in the offering has been met (this is generally between one quarter and one half of the total offering amount). Once the minimum is reached, that amount can be used and the offering continues until either the full offering amount has been raised or the closing date is reached. To purchase stock, investors will send you the completed qualification forms, the subscription agreement and a check. All checks are to be deposited into an escrow account upon receipt.
- Once the minimum amount has been reached, stock certificates are issued to the investors and recorded in the corporate records according to your corporate bylaws and the requirements of your state of incorporation.
- The SEC allows you to do an offering every twelve months. There is no limit to the number of times this process can be repeated, so you could raise money through a private offering every year until all money needed is raised. Keep in mind that an updated Private Placement Memorandum (PPM) would be required for each new offering. If you need more money, give us a call and we can discuss additional opportunities to get you where you need to be.
- Regulation D Series (Private Placement Memorandum P.P.M.)
- Limited Partnership Offering (L.P.O.)
- Form U-7, Small Corporate Offering Registration (SCOR)
The paperwork varies for each type of stock offering, so it is important to know which offering is best for you and which forms will be needed to correctly complete your stock offering documents. Cambridge Financial Services can help you with this process. We would be happy to walk you through the pros and cons of each option for your particular business objectives.
Because there are three distinct types of private offerings, we have a software program available for each one. This will help you create the necessary documents that will confirm to the rules and regulations specific to the private stock offering you have selected.
Types of Regulation D Offerings
Rules 504, 505 and 506 have different rules and requirements that stipulate how much money you can raise, the number of investors that can purchase stock and the investor status. The investor list that we will provide upon purchase of our software package(s) includes only active and accredited investors, which will remove most potential issues involving investor status.
- Rule 504 – Allows you to raise up to $1 million in a 12 month period.
- Rule 505 – Allows you to raise up to $5 million in a 12 month period.
- Rule 506 – There is no maximum to the number of dollars that you can raise in a 12 month period.
- Quick, easy and low cost offering process
- You will not need an underwriting company, brokers or agents, further simplifying the process
- Either yourself as founder or owner of the company or employees that are also officers of the company are able to sell the stocks.
Each software package we offer includes all necessary paperwork to make sure each investor has all the information required to make an informed investment decision. Also included are the forms that help you qualify potential investors and make sure that they understand the risks involved with purchasing stock in your venture. This helps protect both you and your investors through all business contingencies.
As a part of our software packages, we provide an up-to-date list of accredited investors. We also provide a sample introductory letter, so when your stock offering is completed, all you do is mail it off to active investors. What could be easier than that?
Note: Cambridge Financial Services does not sell Investor lists separately. You will need to purchase the software to receive a free list of accredited investors. To maintain our long standing relationships with active investors, we need to make sure that we are only sending them quality investment opportunities in the correct format.
Although there are several steps involved, Private stock offerings can be put together rather quickly using our software. We also offer Stock Offering Review Services if you would like to have us review your offering before sending to investors. Since we also provide you with a list of active, “accredited” investors and all necessary paperwork (sample introductory letter, etc.), the process can happen in little time.
Private Offering Options
There are three popular and distinct types of private (non-public) stock offerings:
Rule 506 requires detailed disclosure of relevant information to potential investors. The extent of disclosure depends on the offering amount.
Please contact us for additional rules and requirements specific to each offering type.
Benefits of Regulation D (Reg D) Offerings
Why use a Limited Partnership (LPO)?
The Limited Partnership can offer liability of the investors limited only to the amount of the investment and protection of assets of the business from charging orders (liens). Today's business environment is characterized by lawsuits against "deep pockets". Today's entrepreneurs are well advised to take preventative action to prevent loss of assets or their personal time as a result of legal actions. In a limited partnership you would be the general partner with full responsibility for running the company, and the investors would be the limited partners, with legally no say in how the company is run.
SCOR Offerings (Small Corporate Offering Registrations)
SCOR offering registrations are handled on a state-by-state basis. Each state will review your offering to make sure that it meets specific requirements set forth by that state. SCOR offerings are legal and available in over 40 states and rising.
SCOR Offerings will allow you to raise up to $1 Million in a 12 month period to an unlimited number of investors. In addition, they have no restrictions on investor sophistication. They can be accredited or non-accredited.
We have found that the competition does not tell you everything you need to know. We provide you with every detail for you to make an informed decision.
Be careful of anyone telling you the only way or the best way to raise capital is by using a SCOR offering.
SCOR offerings have their place and at times may be the proper method to use to raise capital, but don't be led into believing that SCOR is a one size fits all method. In many cases it is not the best method for a business. Due to the fact that each state you wish to sell stock in requires a comment and review process and each state charges fees for you to submit your offering, you can have a time consuming and costly procedure.
Call us today and we will help you evaluate which method will be best for your business objectives.
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Regulation D Offerings - Reg D 504, 505, 506 Offering - PPM Private Placement Memorandums, Limited Partnerships, SCOR Offerings
Acquire the business capital or venture capital needed to startup or expand your company through private stock offerings. We offer software programs to help in the preparation of Regulation D Offerings, Limited Partnerships and/or SCOR Offerings to raise business capital. Business plans are not always enough -- be sure to read our Business Plan Legality page for more information. Whether you are an entrepreneur looking for start-up money or you are involved in a business looking to expand, we can help you get the business capital you need.
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