Global Business Group

Regardless whether you're starting a business or already have an established company, there's a good chance that at some point you will be looking for money, either debt or equity, or combination of both. This article should help to properly prepare the materials presented to investors, thus increasing chances of successful funding.

Investors have money, but they don't have much time to sit and read through 27-pages business plan. If your initial presentation is more than 2-3 pages long, most likely it will end up in a waste basket. Under best circumstances you will receive a call from investor asking to briefly explain what do you actually want. Therefore, lengthy business plan is just as effective as a business card with contact information. It doesn't mean that eventually you won't need a comprehensive document, but not for the initial introduction.

Most people are familiar with JOBS Act in connection with crowdfunding. However this document also has sections related to other topics, particularly "Access To Capital For Jobs Creators". Not being a securities lawyer it's hard for me to fully understand the upcoming changes. My feeling is that it should ease securities broker-dealer requirements for being able to perform small services related to connecting investors with investment opportunities.

What is your interpretation of this portion of JOBS Act (H.R. 3606)? My feeling is that it will allow in some cases to offer intermediary services to investors without current requirement of being registered as securities broker-dealer. Here is the excerpt.

‘‘(b)(1) With respect to securities offered and sold in compliance
with Rule 506 of Regulation D under this Act, no person who
meets the conditions set forth in paragraph (2) shall be subject
to registration as a broker or dealer pursuant to section 15(a)(1)
of this title, solely because—

Besides obvious benefits of offering alternative source of financing to small businesses, crowdfunding has one side benefit that may be just as important as funding itself. I am talking about organization and accountability of a business that decided to take crowdfunding route. 

Lets compare two similar start-ups: ABC company is funded exclusively by the owner and XYZ company funded through crowdfunding. We are talking about very small companies, with start-up capital of under $100,000. About 85% of all business start-ups fall under this category.

ABC owner is a classic entrepreneur type, doesn't have a clear vision where she is going, or business plan, or financial projections, or sales and marketing strategy. She basically has nothing but enthusiasm and entrepreneurial spirit. Such startups are the main reason for 60-75% of small businesses to fail within first five years. Moreover, ABC owner is not reporting to anyone and in many instances doesn't ask for advice or hire a professional consultant to help with business organization.

LOTO Oil and Gas Development – Phase 1 – Osage County, Oklahoma

Principal of the company is third-generation Oklahoma oil and gas explorer and producer with 35 years of experience in drilling wells and making millions for himself and the investors.

Required Investment for Phase One is $4.4 million will buy 65% of Working Interest from net production. The initial investment will be paid out in 11 months. The calculated production life is 15+ years, however many wells are still operational and profitable far beyond. Cumulative Return On Investment (ROI) is 4.29 to 1. There are 6 more phases available for additional $26+ millions. Current investors will have the right of first refusal.

We are looking for High Net Worth Individuals and small Private Equity Groups. We won't be interested in selling the mineral rights or allow you to bring your production crews. We only work with investors or intermediaries directly connected to investors. No daisy chain, please.