"University Incubators could be the most powerful pre-IPO deal-creation machines in America, but there's one problem standing in their way..."
University Incubator Advocacy™
Our Program Mission is to become your greatest advocate in properly incubating pre-IPO companies.
Most securities industry professionals would agree that U.S. Public Capital Markets are the most liquid with the highest level of integrity in the world, due to the strict “Standardization of Process” for all of the players within the securities industry.
They would also agree that the U. S. Private Capital Markets are a highly fragmented problem that has become nearly impossible for anyone to navigate, due to a lack of “Standardization of Process” at any stage.
Resultantly, this lack of Standardization has now become the greatest challenge affecting all players across the entire industry, creating foundational problems that perpetuate an already fragmented market,
Solving private capital markets fragmentation through standardization is the solution to unlocking the hundreds of billions now growing annually in capital overhang.
We believe that becoming your strongest advocate will not only serve to unify all market players, but galvanize efforts in growing your incubator and helping reshape the industry as we move well into the 21st century.
The Problems for Entrepreneurs
The vast majority of privately-held companies have no idea what it takes to be the “Quality Deal Flow” professional investors seek.
1) Legally Constrained. There are only two ways to legally raise substantial amounts of equity capital in the United States:
Produce a business plan and send it off to venture capital firms and family offices for a 1.5% success rate or,
Conduct a securities offering compliant with federal and state securities laws. Success rates vary from 70 and 99% depending on the stage of the company.
One effort works the other doesn’t.
2) So why doesn’t everyone just do a securities offering?
Lack of Awareness. Many don’t know that they can legally compete in the private capital markets to raise capital for their company;
Prohibitive Cost. For those who do know they can, the traditional legal and accounting costs to join the game has been prohibitive, until now.
Bad Deal Structure. For those who can afford those costs, most sell way too much of their common equity ownership and voting control, too early, for too little, due to a bad deal structure they’ve created.
Burnt Capitalization Structures. In addition, these privately-held companies have no idea that one wrong move anywhere along the journey can ruin their capitalization structure, beyond repair. For instance, crowdfunding platforms most certainly have their place in the jungle, but one must set pre-determined limitations on many metrics to be considered viable “Quality Deal Flow” for investment from other heavyweight players further up the food chain.
The Jungle is Dangerous. One must know how to legally and effectively, go from: tapping personal assets and debt, then onto equity funding from crowdfunding portals to broker dealers, to venture capital, to corporation investors or private equity firms for acquisitions, or to Wall Street Investment Banks for an IPO as an exit while always dealing from a “relative position of strength”.
The Solutions for Entrepreneurs
The solution for entrepreneurs is 3-fold.
1) Up-Front Cost Virtually Eliminated. Now, any entrepreneur anywhere in the world can join the game at a mere fraction of the traditional cost involved, saving at least $50,000 to $100,000 in legal and accounting fees—up front.
2) Time-to-Market Reduction. The time-to-market has been significantly reduced, as well. To create hybrid securities, build a proper deal structure and house it in a securities-offering document used to take a few months to complete. With the EPEC Platform™ those processes now only take a few weeks to complete. In addition, by creating the legally required securities-offering document to raise capital, entrepreneurs reduce the Due Diligence time for professional investor by 90%.
3) Equity Ownership & Voting Control Maximized. Through the use of hybrid securities, founders maintain the vast majority of equity ownership and voting control. This could result in savings of tens, if not hundreds of millions of dollars for founders, upon exit.
Historically, most achieve up to a 70% success rate of actually raising the capital sought, through an “In-House” effort using the elements and processes we suggest in our Financial Architect System™, and up to a 99% success rate, by engaging a broker-dealer.
However, most do not qualify for a broker-dealer engagement, but we have closed that gap.
Our system prepares one’s company for a broker-dealer engagement, as well as a direct investment from us, or our co-investors.
Incubator and Accelerator Issues We're Hearing from Around the Country
The issues and challenges being faced by University Incubators and Accelerators that we are hearing from around the country can collectively be summed up as follows:
1) Due Diligence Costs. Like other professional investors, Incubators and Accelerators are experiencing increasing due diligence costs associated with funding or supporting these young companies, which of course is arduous, costly, and time consuming.
2) Dilution. Incubators and Accelerators that do invest in common equity often experience extreme equity dilution of liquidation value. Buying 5% of a company’s common voting equity for $100,000 for instance, means 95% or $95,000 of the that capital is diluted away to the founders’ common voting equity on the balance sheet.
3) Capital Lock-Up. Most lock up their investment capital indefinitely or worse, they simply lose it.
We understand these challenges and our program has been designed to effectively tackle these conccerns.
The Solutions for Incubators and Accelerators
The solution for Incubators and Accelerators is 5-fold.
1) Incubating Quality Deal Flow. As Alliances, Affiliates or Associates and/or Co-Investors of Commonwealth Capital, University Incubators and Accelerators can now add another source of consistent monthly revenue from commissions on subscriptions and create their own quality deal flow of well-engineered companies organically, with no effort, risk, or cost, to invest in by simply referring companies to Commonwealth Capital’s EPEC Platform™.
2) No Dilution. Hybrid securities reduce or eliminate any dilution of capital invested.
3) Due Diligence Cost Reduction. This process serves as serious deal flow filtration, doing 99% of the due diligence work for them.
4) Resurrection of Past Investments. In addition, by referring us their previously stalled investments, Commonwealth Capital’s EPEC Platform enables them to re-engineer and re-capitalize these privately held companies for further capitalization, which may result in these Angel, and Individual Investors, receiving a return of all, or a portion of, the original capital invested.
5) Increased Probability of a Positive ROI. We’ve engineered this entire process so that the entrepreneur never sells too much of the company, too early, for too little, while increasing the probability of successfully raising capital to the highest degree possible.
How can we make such a claim? Simply because this is the Wall Street process engineered for main street companies.
If this didn’t work, Wall Street wouldn’t exist.
We're Here to Help You and Your Entrepreneurs Win
As former Wall Street Investment Bankers and experts in accounting, audit, corporate governance, deal structuring, securities offering document production and regulatory compliance, as well as information technology experts,
Commonwealth Capital management is intimately familiar with the criteria employed by institutional sources of capital looking to fund “quality deal flow”, and how your organization can benefit by monetizing its efforts.
Your incubator or accelerator program, when combined with our EPEC Platform™, can double, if not triple, their chances at funding success, and help get them on a much better-charted path to IPO or future high-value liquidity event, especially as they first begin their business.
Our EPEC Platform™ is the one single solution to all of those problems. Dovetailing with your incubation and accelerator programs, entrepreneurs immediately jump to the next level, learning and applying the skills truly needed to master the legal and effective procurement of substantial amounts of equity capital in the private capital markets.
If you feel your students could benefit from access to such a platform and would like more information on how we can partner with your incubator to support your efforts and student success rate, let us know.
Book a call, and our Executive Program Director would love to discuss how we can help you and your students achieve unprecedented success to monetize your University Incubator or Accelerator efforts.
Executive Director, Educational Resources