Are You Long on Ideas But Short on Cash?

Have you been having trouble finding money for your business venture? This short explanation will likely shed some light on why funding sources are ignoring your business. Chiefly, in this article there are several links to government-hosted web sites. The reason we provide these government web sites is two-fold: first to show you how the BreadStreet program works, and, second to allow you to follow a proven method of getting the funding you need. Therefore, it is important to pay very close attention, because what you are about to learn has funded more businesses -- by-far -- than any other method of funding. Further, this method of funding does not require good credit. This process is well known by all successful corporate executive officers (CEO's) and has been the primary method utilized to get funding for the VAST MAJORITY of start-up businesses. In fact, this method is so effective it is also widely used by large companies too. For example, International House of Pancakes (IHOP) recently raised thirty million dollars using this method. Additionally, over the next few minutes you will get the knowledge and investor resources to allow you to get funding like an expert.

To start, you must understand that talking to the right type of investor is paramount. You can talk to the wrong people all day every day, and get nowhere. For example, many clients come to us telling us how they have spoken to banks, venture capital firms and credit unions and how they have been denied repeatedly. That is because banks, credit unions and venture capital firms combined fund less than four percent (4%) of the start-up businesses. However, according to a comprehensive US Government study, led by the Small Business Administration (SBA), the most proven method of obtaining startup capital is, without a doubt -- private investors. In fact, the SBA says "ninety-six percent (96%) of all seed-stage and start-up businesses are funded by private investors." Therefore, to effectively get funding it is vital that one knows precisely how to locate private investors. That's where we come in, to help companies like yours get in touch with qualified interested investors. In brief, we have thousands of wealthy investor members, and we have new investors join daily. Moreover, our investors are screened for total net worth, current cash on-hand and their interest in specific industries.

For example, when a company like yours is seeking funding, and contacts one of our investors, the investor will have an interest in your specific industry and have the money to invest. Above all, we get financial data verified in writing from the investor -- subsequently, it is documented by the investor's financial professional. Also, we provide you a copy of the investor's signed verification. Simply put, our investors provide us absolute confirmation of qualification and interest. Therefore, you never have to worry about calling unqualified investors again. Further, when you call the investor he or she is willing to discuss the investment in your company. The above, coupled with the fact that the investor has verified in writing his or her ability to make an investment in twelve days or fewer makes for a much greater likely-hood for success.

But, even though getting private investors is the main objective, we must point out, seeking private investments is governed by all fifty states. What's more, each state has a securities board that regulates private and public investments (example) . And frankly, no one wants to get funded only to end up giving the investment money back to the investor. Securities and investment regulators enforce the investment laws, even for investments in small start-up companies. Therefore, you do not want to make any mistakes, because, if you do things wrong, you will have to give the money back to the investor and, possibly get hit with fines -- or worse, get barred from seeking capital for your company. Not only do we show you how to get interested investors, but we make sure you do everything right from start to finish!

In addition to the state regulators discussed earlier, the federal government has The Securities and Exchange Commission (SEC) which enforces the federal investment laws for investments in start-up companies. Of vast importance, all of the states and the SEC require you to report any money invested in your start-up company. Further, the investment you receive must be reported within fifteen days from the date you get the investment -- it's the law. Moreover, the penalty for not reporting can be so extreme, you may get barred from ever raising capital for ANY company again. Many people have said, "They would not do that to me." But, it is best not to ask what will the government do, but rather, ask yourself what they can do. By violating securities and investment laws you could lose everything and even be charged with a crime. In other words, compliance with the law is NOT a matter of choice.

Therefore, one must comply with all authorization and filing requirements, and report investments to the state in which he or she obtained the investment, and the SEC. It is much like how people are required to report income to the IRS, but far more strict. Many people don’t know these rules regarding getting investments or what the definition of a security is. SO, JUST TO BE CLEAR, A SECURITY IS ANY TYPE OF PRIVATE INVESTMENT OFFER IN ANY COMPANY, SMALL OR LARGE, PUBLIC OR PRIVATE.

Therefore, to do things right your company must either register as a public company with the SEC and state governments or be exempt from registration regardless of how small or large the company is. But, most beginning companies can’t qualify to register due to lack of operating history and lower budget and it can cost well over two hundred thousand to register. So, smaller companies with less cash flow and time in business must find, qualify and file for an exemption. Furthermore, even if you plan on using an exemption, your company must prepare a legally compliant investment offering prospectus and file the proper forms to show it qualifies for the exemption, All things considered, identifying  the right exemption and following the law is the only legal way to get private funding. Remember, investors report investments made for tax purposes; thus, the concept of a truly private or secret transaction really does not exist. YOU CANNOT JUST RAISE MONEY AND NOT REPORT IT. AN SEC OR STATE ENFORCEMENT AGENT WILL FIND OUT SOONER OR LATER! 

Fortunately, on September 1st 1996, congress enacted “The National Securities Markets Improvement Act” (NSMIA), to make it much easier for private companies to get funded, it amended the Securities Act of 1933 to exempt from state regulation any offer or sale of "covered securities" offered under 4(2) and 4(6) of the Securities Act. What this means is one can eliminate a vast amount of paperwork and expense that used to occur. But, if you fail to file properly for the exemption with the SEC you will likely get in trouble before you get funded. In particular, you would get in trouble for seeking private funding without proper authorization to do so. See Section 18(b)4(d) and 18(b)3

We point out so strongly the mandated requirements because too often people under-estimate how serious the government is about protecting investors. State and federal governments want to be sure persons like yourself inform investors of any and all possible risks or liabilities that may occur. Plus, there are standard notices that states require to be delivered in writing prior to you accepting any investment from investors. We have provided just two examples below of what states require in an investment package. This type of notice is to be presented when you provide any information to ANYONE excluding your attorney or accountant. Remember the below are just two examples of what states require; there are fifty other states. These notices are specific to each state, so one general notice won't do. A properly written investment package contains these notices along with many, many other very important legally required notices and features.

FLORIDA INVESTORS THE INVESTMENT HAS NOT BEEN REGISTERED WITH THE STATE OF FLORIDA UNDER THE FLORIDA SECURITIES AND INVESTOR PROTECTION ACT AND THEREFORE CANNOT BE RESOLD UNLESS THEY ARE REGISTERED UNDER SAID ACT OR ARE EXEMPT FROM REGISTRATION UNDER SAID ACT. PURSUANT TO THE FLORIDA SECURITIES AND INVESTOR PROTECTIONS ACT, WHEN SALES ARE MADE TO FIVE OR MORE PERSONS IN FLORIDA, ANY SALE IN FLORIDA MADE PURSUANT TO SECTION 517.06(11), FLORIDA STATUTES (THE APPLICABLE PROVISION OF THE FLORIDA SECURITIES AND INVESTOR PROTECTION ACT), SHALL BE VOIDABLE BY THE PURCHASER IN SUCH SALE EITHER WITHIN THREE DAYS AFTER THE FIRST TENDER OF CONSIDERATION IS MADE BY SUCH PURCHASER TO THE ISSUER, AN AGENT OF THE ISSUER OR ANY ESCROW AGENT, OR WITHIN THREE DAYS AFTER THE AVAILABILITY OF THAT PRIVILEGE IS COMMUNICATED TO SUCH PURCHASER, WHICHEVER OCCURS LATER.  INVESTORS ARE HEREBY NOTIFIED OF SUCH PRIVILEGE. A PURCHASER MAY EXERCISE THIS VOIDING PRIVILEGE WITHIN THE AFORESAID APPLICABLE THREE-DAY PERIOD BY SENDING A TELEGRAPH, FAX OR LETTER TO  YOUR COMPANY NAME AND ADDRESS  GO HERE  SENT AND POSTMARKED, PRIOR TO THE END OF THE AFOREMENTIONED THIRD DAY.   IN THE EVENT THIS PRIVILEGE IS EXERCISED, IT WOULD BE PRUDENT TO SEND LETTERS BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED TO THE ABOVE ADDRESS TO EVIDENCE RECEIPT AND TIME MAILING.

NEW YORK INVESTORS THIS OFFERING CIRCULAR DOES NOT CONTAIN AN UNTRUE STATEMENT OF A MATERIAL FACT OR OMIT TO STATE A MATERIAL FACT NECESSARY TO MAKE THE STATEMENTS MADE, IN THE LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY WERE MADE., NOT MISLEADING.  IT CONTAINS A FAIR SUMMARY OF THE MATERIAL TERMS OF DOCUMENTS PURPORTED TO BE SUMMARIZED HEREIN.  THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT PASSED ON OR ENDORSED THE MERITS OF THE OFFERING.  ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL

After exploring the facts, most capital seekers realize the seriousness of the situation, and ask how they be sure to avoid soliciting investors in an improper fashion or break any laws. Additionally, it dawns on many people that the lack of a proper investment package is probably not helping them attract serious investment offers.

To improve your image, get you in compliance and make sure you avoid breaking securities laws, you must.

As you may be aware , most investors are business experts and know what good investments are all about -- good management! The Small Business Administration says fifty percent of all businesses fail due to one thing -- "incompetent management" -- and real investors know that incompetent or uninformed management is bad news.

Further, investors don't usually want to take all the risks alone by being the only investor one has. Therefore, it is much easier to syndicate an investment offer among multiple investors. Thus, investors look for dividing risks. A private securities offering allows investors to invest all or part of the funds you are seeking. To give you an example, if one is seeking, say, a million dollars, it's far more likely that it would be easier to find five investors willing to invest two hundred thousand than to find one investor willing to invest the full million. Even though the investors we provide to you will have cash on-hand ranging from about a hundred thousand on up to as much as twenty-five million, it is well known that dividing the investment offer into smaller increments makes getting the money faster and easier.

Therefore, investors begin by analyzing a business owner's competence the moment the business owner begins presenting the investment offer. Be aware, investors usually know if a company is violating securities laws. If you do not have a properly prepared and properly filed investment package, it shows potential for incompetence. It is viewed as foolish to not know these serious laws that govern getting capital. After all, serious investors will ask serious questions. For example, they will ask if you have a prospectus and so forth, and, many times they will ask by what name your company is listed with the SEC so they can check you out. What that means is, smart investors generally don't want invest with a company unless it can show them it is legitimate, informed and very competent.

When you submit your investment package and file your forms with the Securities and Exchange Commission (SEC), the investors can go to the SEC Database and see you are informed and doing things by-the-book. The investor sees you have filed and are not likely to be a novice or scam. We at BreadStreet have a very simple method to help you do things right. Under our program you get the forms prepared, filings done and the verified investors you need to be proficient. The documents and filing are prepared and filed by a licensed securities attorney. Further, the attorney was an enforcement attorney for a state securities commission for over 12 years, and is in you corner from the very start. Likewise, as things progress each investor and each filing is done to legal specification. Furthermore, all the attorney's work is covered by malpractice insurance. Therefore, you and the investors know you are compliant, competent and professional.

Most people get excited at this point, and get curious about how much time is required to get everything done and get funded. Click here for a time line and methodology study performed by the Kauffman Foundation. Though no one can guarantee whether or how soon funding will occur, there are three reasons that make this method a great choice for start-up companies.

• Most companies get funded by private investments (source: SBA)
• You must obey the law "compliance is not a matter of choice"(source: SEC and State Governments)
• Being legitimate and having a competent, legal image will certainly make investors more apt to invest in your company (Self Evidencing)

The BreadStreet Investors' Union Time Line and Process

The below list is designed to exemplify the daily duties to facilitate a private securities offering under Rule 506 section 4(2) of of The 1933 Securities Act in accordance with the Securities Market Improvement Act of 1996. The list of daily activities and approximate time frames are below. However, time frames can vary -- this is only an estimate.

Day 1 Payment and contract signing to hire BreadStreet Investors' Union

Day 2 Introduction to law firm and transfer of documents

Day 3 Beginning of preparation of documents

Day 4 Draft Form D filled out By Client delivered to attorney

Day 5 Oral review of document preparation and status report

Day 6 Index investor list for appropriate industry interests

Day 7 Preparation of script for investor relation employees

Day 8 Status report from attorney and review of draft of Private Offering Documents

Day 9 Review and report on Form D

Day 10 Documents final approval and filings with Securities and Exchange Commission along with preparation for state filing

Day 11 Investor relations training/preparation

Day 12 Soft probe investors for interest

Day 13 BreadStreet begins contact with investors

Day 14 investor relation instruction and training for Client

Day 15 Delivery of the first qualified and interested investor prospect to Client.

If for any reason the first investor does not invest or you don't get all the needed funds, BreadStreet will provide an additional well- qualified investor within a few days. This service comes with a five month guarantee!

BreadStreet is an organization of thousands of private investor members and a complete array of licensed service providers. All legal work will be performed by a properly qualified licensed securities attorney, and your investor relations training is administered by a licensed securities dealer who has over 10 years of success in raising funding for private businesses. BreadStreet coordinates the process to allow maximum efficiency and effectiveness.

Under The Radar--Bad Idea

"Negligent failure to comply with state and federal law is an easy trap for fast moving executive teams who weigh the costs required for typical compliance methods against the risks of getting caught." And that's because it can be expensive. According to the SBA It's not uncommon for a company to spend upwards of $50,000 for multi-state offerings of just $500,000". But BreadStreet offers a much better value than the national average. We are affordable for virtually any budget.

 "For entrepreneurs, properly registering or filing proper exemptions of  their investment offerings vitally protects them against strict rescissory liability, not to mention the potential for civil enforcement and criminal actions. And without initial compliance, the costs of raising the next round of capital becomes dramatically more expensive and complex."

Google's 2005 IPO was delayed five months, and cost millions of dollars in additional legal costs to remove unaccredited investors from the early-rounds of investment. Google is one of thousands of examples that negligently failed to comply and got in trouble. Think about it, Google had been raising capital since 2000 they got in trouble five years into company development. What if they had not had the money to give back to investors or pay legal costs?

Source: ACE-NET which is the cooperative effort between SBA and nine universities, state-based entities, and other non-profit organizations.

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