CommonWealth Capital Advisors - Architects of Finance

Investment Banking Advisory Services

Investment Banking is a professional industry that is comprised of companies (Investment Banks and Securities Broker Dealers) that are registered as such, with the Securities and Exchange Commission, are NASD Members, and registered with the various states where they conduct business. These investment banks sell securities to investors to raise capital for their client firms. The investment banks require client firm candidates to meet certain levels of criteria to be considered for an investment-banking relationship. Such criteria generally include:

  1. The length of time that the company has been in business;
  2. Minimum annual sales levels;
  3. Minimum profitability levels; and
  4. Experience of the management team.

Most start-up and early stage companies do not qualify for an investment banking relationship. Therefore, most of these companies must raise sufficient capital from personal and professional contacts to reach the criteria level needed to establish an investment banking relationship. Henceforth, the need for start-up and early stage companies to engage with professional services designed specifically for their capital raising needs. Enter Commonwealth Capital Advisors (CCA).

We can help your company raise between $100,000 and $20,000,000 in capital. If warranted, we will prepare your company for an investment banking relationship and will continue to serve your company in a fiduciary capacity.

Below is a brief explanation of our premise, process, and position.

Our Premise.

  1. As you may be aware, submitting business plans for substantial amounts of funding, to institutions, such as; venture capital firms, commercial banks, investment banks, and private equity groups, simply doesn't work for most start-up, early-stage and some seasoned companies. When it does work for the few, there are often too many "strings" attached to make the funding worth it.
  2. Most entrepreneurs want and expect someone or some entity to raise the capital for their company on a straight commission basis with no up-front fees. The problem is that only SEC Registered/ NASD Member Broker Dealers can legally solicit and sell your company's securities for a commission. SEC Registered Broker Dealers always charge prospective companies up-front in due diligence fees, that can range between $35,000 to over $100,000 depending on the complexity of the company, before they commit to an engagement and most will not engage start-up and early stage companies, under any circumstance. There is only one other alternative and that is to create an "In-House" Finance Department and staff it with those from the securities industry or those that have the ability and the financial contacts to get the job done. Working for your company, they do not need a securities license. How do you find these individuals? Put an advertisement in the local newspaper or by other employment solicitation means. How do you afford the staff? They need to be able to raise capital to keep their positions. They are a self-funding expense.
  3. Please be advised that all institutions raise capital from individual investors and your company can, as well. The key to a successful capital-raising effort is to build an "In-House" Finance Department that can compete with these institutions for individual investor funds by advertising and selling securities in high demand according to the individual investor market environment. If your company's securities are well engineered to meet current market demand and if the marketing of the offerings are well orchestrated, and in compliance with federal and state law, you can compete with traditional institutions for individual investor capital. Once your company's Finance Department is fully operational, you will be surprised at how much capital you can raise and how easy it can be. As former institutional financiers, we will assist you in building an effective in-house Finance Department that can be funded primarily with proceeds from the sale of your company's securities.
  4. Another significant benefit of establishing an in-house Finance Department is that it can function as the catalyst for an exit strategy for the owners' shares, when they are ready to retire, or if the owners simply would like to cash some of their positions out. The Finance Department can manage franchise operations, bank relations, product lease options, investor relations and so on. The point being that it is not a temporary department. On the contrary, if built correctly it will become a permanent department within the company.
  5. 5. Selling securities to raise capital is like selling anything else, except you are doing so in a highly regulated environment. It takes time, money, and effort. We have streamlined the process to save you time, money, and effort, while further assuring that you keep in compliance with the regulations.

Our Process. Most successful capital raising efforts are orchestrated as follows:

  1. For most start-up and early stage companies the process begins with conducting a "Seed" capital round, for $100,000 to $500,000, using a private placement securities offering under Regulation D. Producing the deal structure and the securities offering document is relatively quick and inexpensive. It enables the management team to raise capital from personal and professional contacts, as well as, from friends and family. An ample amount of seed capital is a must to launch a successful capital raising effort. Seed capital is generally raised through the issuance of 2 to 3 year Notes with Equity Kickers, which enables the company to provide the potential investor with a quick exit strategy, upon Note maturity, with a small amount of equity for long-term capital appreciation. Seed capital can also be raised through the issuance of participating preferred stock, which can be engineered to provide some of the same benefits to the investor while giving the issuing company unlimited time to raise capital, as opposed to issuing Notes, which eventually mature and the principal comes due.
  2. A portion of the seed capital is used to: a.) further the protection of the company's assets, i.e. intellectual property; b.) expand business operations; c.) provide ample working capital to pay executive and staff compensation and d.) more importantly, to hire or fund a V.P. of Finance to manage the capital raising process. Remember, only SEC Registered Broker Dealers and Bona Fide Employees can legally solicit and sell your company's securities. You cannot pay a bona fide employee a commission from the sale of securities. We train the V. P. of Finance to function in the capacity of a broker dealer to build your Company's Finance Department.
  3. A portion of the seed capital is used to produce the next securities offering document to qualify for an SEC exemption from registration under Regulation A (No SEC Reporting or Audited Financials necessary). This enables the company to legally advertise the securities to compete with financial institutions to attract individual investors locally or over the Internet, globally.
  4. A portion of the seed capital is also used to fund the advertising and promotion of the securities. Advertising a security with a "Marketable" deal structure that meets current investor demand is the key here. Advertising common stock simply does not work, unless it has a stated dividend like a REIT. We generally recommend offering a participating preferred stock with a high stated dividend so that the "Yield" can be advertised because the fixed income markets, i.e., Notes, Bonds, and Preferred Stock, are 15 times the size of the equity markets (Common Stock) and is growing larger every year due to the baby boomer generation entering into retirement and looking to generate income from their investments.
  5. If your company has sufficient cash reserves or cash flow, i.e. "Seed" capital, to conduct a development or expansion capital round under Regulation A, a Regulation D, with the same terms as the Regulation A, can quickly start the process of the larger Regulation A securities offering, as a Regulation D is relatively easy to produce. This process enables your Management Team to approach their private investor contacts, while you wait for a Regulation A offering to be produced, filed and qualified by the SEC and the State(s). Also, the amount raised under Regulation D is not included in the limitation amount of $5,000,000 per 12-month period under Regulation A, so you may be able to raise more than $5,000,000 in the 12-month time period, if necessary. In addition, some or possibly the full amount of the Regulation A offering may need to be escrowed before being released. Not so under Regulation D, as the funds can be used as received.
  6. If additional funds are required for future expansion or if the founders are ready to start liquidating some or all of their holdings, we can assist your company's Finance Department in the listing of its securities on the over-the-counter bulletin board, thereby making the securities liquid or "free trading." SEC reporting and audited financials are necessary to qualify for OTCBB listing. Once your company's securities are listed for trading on the OTCBB, you can simply "float" or sell more securities into the institutional markets to raise capital, as needed. Will your company's securities sell? They will if they have a marketable deal structure and you provide a discounted price to the institutions.

Our Position. We can provide you with the tools to produce security offering documents, with marketable deal structures, on your own or you can hire us to do it. There are a few ways we can help you in your quest for capital:

  • If you DO NOT have the money, but DO have the time to go through the learning curve, we suggest you start with raising seed capital with the Reg. D - Private Placement Producer™ - Notes with Equity Kickers or Reg. D. - Private Placement Producer™ - Participating Preferred Shares Module of our Financial Architect® System, which is currently available for purchase and downloading on our website. This Module will enable you to complete the vast majority your company's "Seed Capital" securities offering document at a fraction of the standard production cost. If you are unable to complete the securities offering document, we can provide you with a completion bid. This should ensure completeness and provide you with the required documentation, in a timely fashion.
  • If you DO NOT have the time to go through the learning curve, but DO have the money, we will assist you through our full service Investment Banking Advisory Services (IBAS) Agreement. Through this service we offer speed and accuracy. The range of Contingency Fees are customized according to the quantity and quality of the information contained in your current business plan or securities offering document. For a competitive analysis of our Investment Banking Advisory Services, please be sure to have:

    1. A CPA price the cost of producing pro forma financial projection that are GAAP Complaint;
    2. An investment banker price the cost of producing a marketable deal structure; and
    3. A securities attorney price the cost of producing either a Regulation D and Regulation A securities offering document. In addition, ask them if they would be willing to work on a partially contingency basis.

CORE COMPETENCIES

  Commonwealth
Capital
Advisors		 Accountant Investment
Banker		 Attorney Stockbroker
Produces Pro Forma Financial Projections Yes Yes No No No
Analyzes & Determine Company's Valuation Yes Yes Yes No No
Establishes Price Of Company's Securities Yes No Yes No No
Structures The Capitalization Plan Yes No Yes No No
Tailors Securities Offering To Meet Market Demand Yes No Yes No No
Produces Securities Offering Document Compliant With Regulations * Yes No No Yes No
Manages Administrative Compliance After Issuance Of Securities Yes No No Yes No
Manages Capital Raising Process ** Yes No No No Yes

* Commonwealth Capital Advisors, LLC does not practice law, but it will assist its clients in managing the legal process with the clients’ legal counsel. Securities Offering Documents are prepared for legal counsel review.

** Commonwealth Capital Advisors, LLC does not solicit or sell securities for its clients, but it will assist its clients in managing the capital raising process by assisting in the marketing effort and training bona fide employees of the client firm.

Our contingency fee schedule is designed so that we and our client firms are equally committed to a successful capital raising effort. Our client firms pay as we perform certain document production, filing and training functions. Although we cannot take a commission on the sales of securities, our profits from document production and advisory fees are dependent upon successful capital raising efforts by our client firms.

Most companies that we advise believe that they only need "X" amount of capital to get them were they need to go. When in reality, 9 out of 10 times, their capital needs end up being 3 to 4 times more than originally thought. We can help your company raise as much capital as necessary on an "as needed" basis, but it can only be done through a series of securities offerings, unless your management team has the capital necessary to list the company's securities on the Over-The-Counter Bulletin Board (OTCBB) and support the creation and operation of an "in-house" Finance Department, right away. At a minimum, $500,000 in capital would be needed to do so. Don't jump to conclusions. As you will learn, you do not have to take your company public to raise capital; it is simply an option that provides additional ability to raise substantial amounts of capital, if necessary.

This process is used by Wall Street investment banks and is simply a logical progression of steps that must be taken to ensure that you always maintain a relative position of strength, maintain the vast majority of equity ownership, as well as, voting control. These are the precious elements that most business owners give up too early in the capital raising process. We have case study after case study of entrepreneurs who have successfully raised capital using various parts of this process because these are the fundamental processes used on Wall Street. Their successes will not necessarily equate to your success, because without your belief in the logic of the process, dedication and commitment, the case studies are moot.

If you chose us to represent your company as its Financial Advisor, we will engineer a capitalization plan and a series of securities offerings with marketable deal structures that will give your company the highest probability of capital attainment possible. How can we make such a claim? Because our process is simply the Wall Street process, re-engineered for Main Street companies. If you need an SEC Registered/NASD Member Broker-Dealer, we will sponsor you at the next National Investment Bankers Quarterly Capital Conference.

Our seasoned experts offer in-depth experience in business organization, deal structuring, securities offering document production, and capital procurement through the issuance of securities, matching the needs of any business structure in any sector.

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Representation in:

Ann Arbor
Atlanta
Chicago
Detroit
Harbor Springs
Honolulu
Los Angeles
Palm Beach
Phoenix
Raleigh
Sacramento
San Diego
San Francisco
San Jose

International Representation in:
Buenos Aires, Argentina
Vancouver, BC, Canada