“Investment Banking and Consulting Servies for Growing Businesses”

The following is an excerpt from an information and marketing brochure I wrote on behalf of one of Merrill Corporation’s financial services clients. Company name and contact information has been removed from this reprint.

Your Personal Advocate

[Company name] provides investment banking and consulting services to public and private companies. We help your company finance debt and equity, prepare for an Initial Public Offering (IP0), or prepare for merger and acquisition.

PART I. Public Companies – Debt and Equity Financing

With the largest client base in the investment banking business, we have access to over $5 billion dollars in cash to invest in growing public companies. Our clients deal exclusively with companies whose market cap falls within $30 – $600 million dollars. We’ll walk you through the financing process every step of the way— from the competitive bid stage to the funding of your company.

We Tell Your Story to the Investors

As the intermediary between you and the investor, we begin by entering into an Investment Banking Agreement. Then, we show your company to the investors. It’s our job to tell your story and get your company financed at terms that meet your expectations. Typically, draft term sheets begin to arrive within a week from interested investors. Every term sheet we receive regarding your company is passed along to you.

If you have concerns about a particular draft term sheet, we’ll go back to the investor and advocate for the changes you’ve requested. We’ll help you understand each offer and decide on the package that best fits your needs.

Helping You Get to Know the Investors

With investments this large, you’re entering into a long-term partnership with the investor. That’s why, after both of you agree on the basic terms of the financing, and the draft term sheet is signed, we coordinate opportunities for both parties to get to know each other.

First, we schedule and facilitate conference calls between you and each investor that you want to pursue. Then, in many cases, these discussions are followed by face-to-face meetings, which we also coordinate for you. These meetings initiate a good working relationship by allowing you to get to know the investor’s background and ask any questions you may have.

No Advance Fees. We Don’t Get Paid Until You Do

The actual funding of your company usually occurs two to three weeks after signing a draft term sheet. You pay no advance fees for our services. We’re paid when your transaction closes. In other words, we don’t get money until you get yours.

PART II. Private Companies – Going Public

A. INITIAL PUBLIC OFFERINGS

Basically there are two ways to bring your company public – an Initial Public Offering (IPO) is the most traditional. This is a long and complicated process, but we help make each step easier, from ensuring your books and records are in order to recommending reliable accountants and attorneys to providing investor relations support.

The IPO Process at a Glance:

  • Underwriting Agreement and Filing: First, you come to an agreement with an underwriter to raise your company money. This money will be raised through the sale of registered stock that your company sells to the public. After the underwriting agreement is signed, the process of filing your registration and initial prospectus begins. This usually takes four to nine months.
  • SEC Application: After you file, you wait and hear back from the Securities and Exchange Commission (SEC) in the form of a deficiency letter.  You reply to the questions in the SEC letter and send back your application. Accuracy is crucial during this process. Mistakes may delay or jeopardize the entire process. This process alone typically costs between $30 thousand and $100 thousand in legal and accounting fees, which your company pays in advance of the IPO funding.
  • Registration Statement: After your registration statement becomes effective, you’re ready to sell your stock to the public. Provided market is cooperative, your umbrella will be ready to move forward as well. In turbulent times within the market, it’s not uncommon to see offers canceled due to market volatility. What happens to companies who have their IPO canceled? They are out the $30 thousand to $100 thousand spent on legal and accounting fees for registration.

B. Reverse Merger

A less expensive, less time-consuming method of going public is to merge with a shell company—which is a public company with no operations, no revenues or earnings. This is known as a reverse merger and can achieve the same goal of bringing your company public, at a fraction of the cost within a fraction of the time. At [Company Name], we’ve got the connections and expertise to help you through each stage, from locating and selecting shell companies to filing all the documents needed to go public.

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