CommonWealth Capital Advisors - Architects of Finance

Dear Fellow Entrepreneur,

As former Wall Street financiers, we have many capital sources looking to fund "Quality Deal Flow", primarily investment banks -- broker dealers, angel groups, accredited investors, hedge funds and private equity firms. Our job is to create and supply that Quality Deal Flow. If you believe your firm can become that Quality Deal Flow, then we invite you to join the many entrepreneurs who are getting the funding they need... on their terms.

Suffice it to say, there is an unlimited number of ways to seek capital. However, there are only a few ways to capitalize your company with substantial amounts of equity capital, while maintaining the vast majority of common equity ownership and voting control.

Obviously, we cannot design or illustrate an optimum plan for your company with a dissertation on a website. However, if you can understand and appreciate the process, then you will increase your probability of raising the capital you need. You'll be amazed at how easy creating and executing the proper capitalization structure and plan has now become.

Whether you have been through the capitalization process before or not, we're sure you will appreciate reading: "The Secrets of Wall Street - Raising Capital for Start-Up and Early Stage Companies."

When it comes to raising capital, there is no simpler way to explain how to effectively raise substantial amounts of capital while maintaining equity ownership and voting control. If you read just the first 2-Chapters of the EBook, it would be time well spent. By doing, so you will be able to make an informed decision if our process is right for your company's capital raising needs. At the very least, you will save a significant amount of time and money.

Our Purpose:

Our purpose is to revolutionize the way capital is raised for start-up and early stage companies, using the techniques of Wall Street. We want every entrepreneur to have a legitimate shot at raising capital and to join the game at fraction of the traditional cost.

As former Wall Street financiers, we built Commonwealth Capital Advisors with the original intent to solve a major problem for Wall Street investment banks (securities brokers) and venture capital firms. That problem is a lack of quality deal flow. On Wall Street, "Quality Deal Flow" means companies with 25 to 50 million dollars in current annual sales, an "A" management team in an "A" or "B" market, with the potential to conduct an Initial Public Offering or an outright sale within 3 to 5 years. Of course, a good story is essential, as well. Our goal was to be the "Go to Guys" for investment banks and venture capital firms seeking that quality deal flow. To accomplish this task, we needed to invest more time and money in finding candidate companies early on in their existence. Like a scout for a NFL team, we needed to go to the freshman and sophomore high school level, as opposed to the junior and senior college, as everyone else was doing. By taking this approach, we inadvertently became the "Go to Guys" for start-up and early stage companies seeking their first few million dollars in capital.

We have many capital sources looking to fund "Quality Deal Flow." We know what that means. Therefore, we engineer start-up and early stage companies' financial structures so that they become quality deal flow. To accomplish this task, we needed to ensure that these young companies: 1.) Do not sell too much common voting equity, too soon, for too little; and 2.) Do not become burdened with too much debt.

Therefore, we create hybrid securities, such as; participating preferred stock; develop a 5-year capitalization plan, which illustrates issuing a series of these types of securities over time; and oversee the training of personnel to accomplish the task of raising the capital. By doing so, we further assure that: 1.) The capital structure does not become cost prohibitive - by implementing rolling re-financing techniques; 2.) The capital is actually raised; and 3.) The company maintains compliance with securities regulations and financial results are optimized.

We enable our clients to use the power of these hybrid securities, whether privately held or publicly traded, to be sold directly to corporate buyers who may qualify for the 70% dividend exclusion allowance (tax advantages) and or to act as currency for purchasing competitors, suppliers, or strategic acquisitions.

We enable our clients to use the power of these hybrid securities, if and when publicly traded, to raise substantial amounts of capital by selling them directly to market makers at discounts to market price. Market Makers have plenty of capital and want the stability that these types of securities provide. This may seem difficult at the outset, but with the right professionals at your side, this is the easiest, quickest, and most correct way to go about the capital raising process.

Our Premise:

Problem I: Financial Institutions: Submitting business plans, for substantial amounts of funding, to financial institutions, such as; venture capital firms, SEC registered investment banks, family offices, money managers, private equity groups, or commercial banks simply does not work for most start-up, early-stage or even some seasoned companies. When it does work for the few, there is often too much equity and control given up to make the funding worth it.

Solution I: Compete with Financial Institutions: Therefore, we developed a process to enable our clients to compete directly with those financial institutions for individual investor capital using the techniques of Wall Street investment banks. All financial institutions raise capital from individual investors and your company can, as well, by conducting a series of well orchestrated securities offerings. By doing so, you compete with investment and commercial banks, venture capital and private equity firms to raise substantial amounts of capital while maintaining the vast majority of equity ownership and voting control.

Problem II: The Demand for Common Equity is Very Low. Attempting to sell common stock or membership/partnership ownership interests at the early stages of a company's existence is very difficult and expensive. It's difficult because most try to sell a small amount of equity for a relatively large amount of money. If there is very little cash or marketable inventory in the company, and an investor purchases 30% of the total ownership equity for $1,000,000 that investor just lost $700,000 due to dilution. An extreme dilution factor is very unattractive to any investor. In addition, if you assume success in your venture, selling any equity in the early stages, generally results in selling too much, too soon, for too little.

Solution II: Create Securities that are High in Demand. Consider creating securities that are in high demand that cannot dilute the common stock and are non-dilutive in disposition. Such securities would include "hybrids" or those with a "high yield" component coupled with a forward non-dilutive position, such as; short or long-term notes, non-convertible short or long-term bonds, and or participating convertible callable preferred stock.

Other significant benefits of issuing hybrid securities are: (a) Common equity ownership and voting control is not diluted or lost; (b) They are in high demand so selling them is relatively easy; (c) They can be "Callable" or redeemable making this form of equity temporary -- at your option -- therefore the least expensive form of equity; and (d) They can be used as currency for acquisition purposes ~ very important!

If you structure your company's securities offerings to meet current market demand and properly orchestrate the marketing of those offerings, you can compete with traditional financial institutions for individual investor capital.

Problem III: No Time, Money or Investor Contacts. Rarely do we meet a management team that has the time, money or investor contacts, let alone the knowledge and skill sets needed to effectively compete for substantial amounts of development or expansion capital in the private, as well as, the public markets.

Solution III: Hire a Vice President of Corporate Finance. If you are in the later stages of development and are unable to contract with a SEC registered broker dealer to sell your company's securities, consider creating an "in-house" Finance Department to compete with financial institutions for individual investor funds. Staff it internally or hire someone from the securities industry with the ability, skill sets and investor contacts to raise capital exclusively for your company. Working as a bona fide employee for your company, no securities license is required. How do you find these individuals? It is relatively easy because of the securities industry's high turnover rate -- especially in today's market. How do you afford the staff? They are a self-funding expense -- if done correctly. For Start-Up Companies raising seed or first stage development capital, this strategy may not be appropriate.

WARNING! Paying outside money finders in the U. S. that are not SEC registered broker dealers is not only an absolute waste of time and money, but potentially illegal.

Not so much for start-ups, but for early stage companies other significant benefits of establishing an in-house Finance Department are: (a) It can manage future capital raising efforts in house and/or in conjunction with a SEC registered broker dealer. It can also manage franchise operations, banking, supplier-creditor negotiations, lessee relations, product lease options, investor relations and so on; and (b) It can even function as the catalyst for an exit strategy for the owners' shares, when they are ready to divest their ownership positions. The point being, an in-house Finance Department is not a temporary department. On the contrary, if built correctly, it will be a cornerstone of your company.

Once your company's Finance Department is operational, you will be surprised at how much capital you can raise and how easy it can be.

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 the vast majority of ownership equity and voting control, all while staying in compliance with the various securities regulations.

Most savvy entrepreneurs would agree that making a small investment now to create a company that will become "quality deal flow" for much larger returns later, makes sense.

Our Process:

Conduct a Series of highly attractive securities offerings as needed.

Most will not need all the offerings as listed above.
You can stop raising capital at any time.

1. Create a 5-year Capitalization Plan. Produce pro forma financial projections to Generally Accepted Accounting Principals (GAAP) standards, thereby creating a 5-year capitalization plan illustrating a series of hybrid securities offerings with "Marketable" deal structures to further the success of each offering.
2. Produce the Required Securities Offering Documents. Produce securities offering documents that not only comply with federal and state exemptions from registration, but also with the deal structures that are engineered to sell.
3. Conduct a Private Offering of Hybrid Securities. Sell a private placement of hybrid securities, under Regulation D to raise seed and or development capital from personal and professional contacts -- including any pre-existing relationship (i.e. friends, family, personal and professional relationships, as well as, customers and suppliers). An ample amount of seed capital is necessary to launch a series of successful capital-raising efforts. Seed capital is generally raised through the issuance of 2 to 3 year "Seed Capital Convertible Bridge Notes" or "Participating Preferred Stock." Producing these deal structures and the securities offering documents is relatively quick and inexpensive.
4. Employ the Seed Capital. 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 Corporate Finance to manage the capital-raising process.
5. Conduct a Public Offering of Hybrid Securities. A portion of the seed and/or development capital is used to produce the next "Public Placement" of a Private Entity's securities offering under a SCOR offering -- - limit $1,000,000 per 12-month period; Regulation A (CA (1001) for California Companies) - limit $5,000,000 per 12-month period, if necessary. (No SEC Reporting or Audited Financials necessary). This enables the company to legally advertise the securities to the general public in order to compete with financial institutions.
6. Promote the Securities Offerings. A portion of the seed capital is to be used to fund the advertising and promotion of the securities. Advertising a "High Demand" security with a "Marketable" deal structure that meets current investor demand is the key here. We generally recommend offering a participating preferred stock (a hybrid security) with a high stated dividend so that the "Yield" can be advertised. This is because the fixed income markets are 15 times the size of the equity markets (common stock) and is growing larger every year.
7. Engage a Securities Broker Dealer. Most broker dealers will not engage a start-up or early stage company to sell its securities because of the inherent risk with such companies and the "Illiquid" nature of it's securities. However, if you mitigate the risk of an investment in the company by issuing hybrid securities and further mitigate the risk of the investment vehicle itself by providing a liquid market for it, your chances of engagement are increased dramatically. Therefore, to continue the marketing effort, consider listing your company's hybrid securities on the over-the-counter bulletin board ("OTCBB"), NASDAQ or American Stock Exchanges, thereby making the securities liquid or "free trading," then 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 institutional investors ~ market makers. Private Placement Producer™ does not function to enable you to list your securities on an exchange but enables you to plan the "Use of Proceeds" for such a listing and therefore greatly increases the probability of capital attainment. Exchange listing services are available through our Investment Banking Advisory Services.

In summary, create hybrid securities, such as; a participating preferred stock; develop a 5-year capitalization plan, which illustrates issuing a series of these types of securities over time; and oversee the training of personnel to accomplish the task of raising the capital. By doing so, you further assure that: 1.) The capital structure does not become cost prohibitive - by implementing rolling re-financing techniques; 2.) The capital is actually raised; 3.) Financial results are optimized while the company maintains compliance with securities regulations.

Sound Complicated?
Not with Private Placement Producer™.

Our Position:

• To Save You the Maximum Amount of Money, we suggest you start your capital-raising efforts with our software Private Placement Producer™ software. It is a meticulously complete system utilizing 100% of CCA's Investment Banking Advisory Process. However, if you need additional assistance, it can be provided through the "Document Review and Completion Option" as stated within the Financial Architect® End-User Instructions.
• To Save You the Maximum Amount of Time, we suggest our full service Investment Banking Advisory Services. Through this service, we offer speed and accuracy. The range of progressive and contingent fees are customized according to the quantity of the required capital sought and the processes involved.
• Do you already have a Private Placement Memorandum (PPM) but no Investors? If you have been sending out your securities offering documents (PPMs) but are not attracting investors, there may be 3 basic reasons why. 1.) The deal structure has too much dilution for attracting investors; 2.) The effort is not set-up as an ongoing well orchestrated process; and 3.) You may not be targeting enough investors that have expressed an interest in your type of offering. These issues, and many more, can easily solved with the Private Placement Producer™.

Our Promise:

We provide our Investment Banking Advisory Services with a contingency fee schedule, so we are equally committed with our client firms to a successful capital-raising effort. Our client firms make progressive payments as we perform certain securities offering document production, filing and securities sales training functions and as they raise the capital. Our clients simply are required to cover our out-of-pocket costs for the production of their securities offering documentation and although we cannot take a commission from the sale of securities, our profits from securities offering document production and advisory fees are dependent upon the successful capital raising efforts of our client firms. Our "real" money is made when we take a client firm public or assist in a strategic sale. By assisting you in maintaining the vast majority of common equity ownership and voting control throughout the entire capitalization process, we earn 2 to 5% fully diluted equity stake in your company, once we take it public or assist in a strategic sale.

When making a competitive analysis of our Investment Banking Advisory Services, please be sure to: (a) price the cost of producing pro forma financial projection that are GAAP Compliant; (b) price the cost of producing a marketable deal structure; and (c) price the cost of producing either a Regulation D 506, SCOR, Regulation A/CA(1001) or SB-2 securities offering document.

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.

In Conclusion:

Later stage companies, hire Wall Street investment banks use to assist them in this process. It is a logical progression of steps to ensure that you always maintain a relative position of strength when competing for capital, as well as, the vast majority of equity ownership and voting control. These are the most precious elements that the majority business owners give up too early for too little in the capital raising process. We can cite case study, after case study, of entrepreneurs who have successfully raised capital using various parts of this process because these are the same 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 to the effort, the case studies are moot.

If you choose 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 Broker Dealer to sell your company's securities for you, we can assist you by sponsoring your company 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. If you have an interest in executing our Investment Banking Advisory Services ("IBAS") Agreement, please email us at support@commonwealthcapital.com.