Chapter 1: Introduction

“When it comes to raising capital, there are no guarantees…only degrees of probability. To ensure success, simply increase the probability to the highest degree possible.”

 Timothy D. Hogan, Founder & CEO: Commonwealth Capital Advisors

This book is designed to show you how to increase the probability of successfully raising capital to the highest degree possible.How can we -my colleagues and I- make such a claim? We have simply brought the “Wall Street” process to “Main Street” companies and without this process, Wall Street wouldn’t exist.  

This book was written as the precedent to a revolutionary change in the ability, not the way, capital is successfully raised.  The fundamentals on the way capital is successfully raised rarely changes, if at all. The ability to perform the necessary tasks to ensure success, have. I will introduce you to complex processes that have been substantially streamlined and simplified.  I will divulge many secrets, strategies and techniques used by Wall Street investment banking firms to further the goal of raising capital for your company. The most difficult part of writing this book was to take an enormously complex set of processes and simplify them as best they can be, without denigrating them. 

The true value in what you are about to discover does not necessarily lie within your ability to successfully raise capital, but more importantly in your ability to make a qualified decision if these processes contained herein are right for you and your company. Only you and your team can make the decision if you’re are ready to take on this challenge.  The process of selling securities to capitalize a company is not for everyone.  This is not child’s play.  Too often, I joke about this book being a tool to scare away the vast majority of entrepreneurs – who are simply at the “Dreamer” stage in their journey.  We know these processes work for those who are ready and do not work for those who are not.  Many come back later in life, when reality has set in and their ready.  When the student is ready the teacher appears.

The processes outlined, discussed and clarified herein are for serious professionals who need substantial amounts of capital for a start-up or early-stage company or commercial project for which they want to maintain voting control and the vast majority of equity ownership – whether they choose to remain private or go public, later on. These processes are used by Wall Street investment banks to raise capital for their client companies and you can use it to capitalize your company, as well. As you will see, once you are successful at raising capital in the private markets, opportunities will abound and you may decide to take the company public someday. You do not have to take your company public to raise capital. These processes give you options, not restrictions!

When speaking of raising capital for start-up and early-stage companies, my primary focus is how to raise passive rather than active capital. “Passive” capital means attracting capital from investors who are not interested in any active management of the company, but seek relative safety with a better than average rate of return on their investment. These investors are commonly known as “Angels.” “Active” capital means attracting capital from professional investors who seek active management and or strategic support (or actual control) of the company and will structure the deal (offer terms of financing in a term sheet) to achieve relative safety, while seeking a substantial return on their investment. This type of capital is referred to as “High Octane” capital, because of the demands for speed and performance put on the recipient company’s management team.  These investors are typically known as “Institutional,” “Professional” or more commonly known as Venture Capital. I will address both types of investors throughout this book. Both sources of capital have their place, but in the early stages for most companies, passive capital is normally better for entrepreneurs who seek the freedom of control without having to answer to another type of boss. In other words, too many cooks in the kitchen can distract from realizing the entrepreneur’s dream. 

To increase your company’s chances of raising capital successfully, it will be to your advantage to know how other entrepreneurs are successfully raising capital and what trends are taking place in the private, as well as, the public capital markets to get ahead of those trends to take full advantage of them.  More importantly, to increase your company’s chances of raising capital correctly you should understand the nature of the regulatory environment for issuing securities to capitalize your company.  This, I explain throughout the book.  Many concepts have been repeated to help you understand the full magnitude of the process.  For most, this is a lot to digest.

A Brief History of Time that Led to this Book and the Process Defined Throughout.

I started my career in the securities industry in April of 1985 with Merrill Lynch, a venerable giant in the investment banking and securities industry at the time.  After the stock market crash of 1987, I joined the legendary E. F. Hutton in February of 1988, which was bought shortly thereafter by another industry giant, Shearson Lehman Brothers, which subsequently was acquired by Smith Barney, which was then acquired by Citicorp.  Needless to say, I was heavily involved in an industry that was still in turmoil, due to the market meltdown on Black Monday, October 19th, 1987.  I left the major firms in 1990 and joined one of the fastest growing regional investment banks in the Midwest.  There, I rose up through the ranks to Director of Compliance within a year and a half.  In that position, I oversaw the securities brokerage end of the firm and created and managed the investment banking division, the registered investment advisory division and was in the process of creating the commodities division.  As I have said in the past, “my dollar to headache ratio went sour” and I was looking to get out of the industry – for good.

In-vest-ment Bank-ing: vb ME, fr. MF or It: banca MF: banque 1: The process of creating financial instruments (securities) and capitalization structures for companies, institutions and governments. 2: The procurement of capital through the sales of securities, normally through an association with a broker-dealer. 3. The financial management of mergers, acquisitions and divestitures.

Shortly thereafter, I was contacted by my then step-father, a professional golfer, who had a need to raise several million dollars in equity to secure adequate debt to build, own and operate an 18-hole championship golf course with a surrounding real estate development project.  In January of 1993, I left the regional firm and the securities industry for a short time.  I created a $2,000,000 private placement memorandum (PPM) for selling securities under Regulation D 506 (an exemption from registration of those securities – the least expensive way to go).  The PPM was complete by March 3rd and I immediately proceeded to solicit and sell the $2,000,000 in stock using techniques I learned working for those large Wall Street investment banks.  I successfully closed the $2,000,000 in 5 ½ months, by August 14th of 1993 and obtained the necessary debt financing ($527,000) with a commercial bank shortly thereafter.  I was able to push the debt amount to the federal legal limit the bank could lend (a small community bank) and I obtained it with no personal guarantees, as well.  I was able to do this because I was in the process of creating another PPM to sell debt in the form of 1st mortgage notes to the general public.  When the bank caught wind of what I was up to (attempting to compete for their depositors) they quickly assured me that they would fund the debt portion of the financing with no personal guarantees.  More shall be revealed on this technique later.

Incidentally, the reason why it took that long to raise the capital was that we did everything on a shoestring.  I managed the company’s overall administrative and construction operations as its CFO and Vice-Chairman in the morning, and physically managed the construction process by operating heavy machinery in the afternoon – it was a blast!    One last thing, we built the golf course on time and under budget by $386,000.  Not meaning to brag, but the point is to simply illustrate an answer to the most important question and entrepreneur can ask me:  “What separates those who succeed in this effort and those who don’t.”  Those who succeed do whatever is necessary to get the job done…period. 

Suffice it to say, I received a lot of attention from the local professional community.  The next thing I know I’m getting referrals from attorneys, accountants and commercial bank presidents, who had clients that needed an extra million or so in equity capital.  So, in the subsequent years following, up until Commonwealth Capital Advisors was created in the Spring of 1998, I served as a “serial CFO” of sorts, assisting a handful of companies with their capitalization needs.   

I founded Commonwealth Capital Advisors in 1998 with a handful of managing directors, which included a corporate and securities attorney and a CPA.  We threw up a website (an old one, not the one we use now) and the next thing I know we have entrepreneurs, primarily from California and almost exclusively in the “Dot Com” industry, hiring us to produce the appropriate “marketable” deal structures and creating securities offering documents to sell securities to raise millions for their start-up companies.

Things couldn’t be better.  At the ripe old age of 40 I’m playing a lot of golf; we were producing documents and assisting these entrepreneurs in their capitalization efforts.  Success was everywhere – until February of 2001.  That period started what is generally regarded in the securities industry as the “Tech Wreck” or the “Dot Bomb” era.  The “small cap” public markets fell apart and brought start-ups to a screeching halt.   Now what to do?

I realized that through that high-flying era of hot dot com speculation, also coined by the then Federal Reserve Chairmen Alan Greenspan as “speculative exuberance” we had far too many prospective clients who simply didn’t have a clue on what we did or how we did it.  More importantly, even for those who did know how easy and successful a securities offering to raise money could be, most simply could not afford the process.  Something desperately needed to be done.

Putting this extremely arduous and costly process into a do-it-yourself system and selling it over the Internet at an affordable price so that millions of entrepreneurs could use it to create their “dream” company was a great idea.  But, I wanted to put it into a workable system “so easy a child could do it” because, as an entrepreneur myself, I can appreciate the fact that the last thing we all need is another big hurdle to overcome.  Bringing it to this level was a daunting task indeed.  In addition, to create a system that is seamless is most improbable, as well – no matter the degree of technological sophistication of the platform used for delivery.  However, Financial Architect® is as easy as it gets, continues to evolve, and is becoming easier to use each and every year.

During the creation of Financial Architect®, I also wanted to grow our firm in several ways. I placed a career advertisement in the regional Wall Street Journal for a Managing Director in the greater Chicago area. Charles D. Dreher was one of the respondents with an investment banking background that I had a keen interest in hiring. During our several interviews, Charles asked me how many securities offering documents the firm created in the past four years, I told him, “Twenty-three.” Then he asked, “What were the amounts of the capital raises?” I responded, “From $500,000 to $20,000,000 and everything in between.” Lastly, he asked, “What percentage of the clients raised all the capital they were looking for?” I said, “78.2%.”  He said, “That’s amazing. How’s that possible?”  I knew no difference so I hadn’t had an opinion up to this point, but after some contemplation, I answered, “Probably the proper deal structure combined with the client’s commitment to the process.”

Charles then proceeded to tell me that there are 25 million small business owners in America and that approximately 600,000 new businesses are formed every year – these entrepreneurs are the backbone of our country. Can you imagine all the great ideas that go unfunded? Ideas that could eliminate or lessen world hunger, protect the environment, create advances in medicine, and revolutionize communications, not to mention thousands of brilliant inventions that could prove invaluable. Just think how by helping all these entrepreneurs succeed we strengthen the U.S., as well as, the world economy. 

He said, “Why not make your system available over the Internet and see if we can drive down the cost?” We spoke to our attorneys and accountants and all agreed we should build Financial Architect®. It has taken over seven years and $700,000 to create and beta test the system. What has been accomplished thus far, is the creation of a premier system that addresses the most important issues needed to complete the process while it affords every entrepreneur a chance at a reasonable cost, both in time and money.  The book you are now reading is the first and smallest of three interdependent components of Financial Architect® - the educational component.  You can judge the balance of Financial Architect® based on the entire contents of the Expert Edition of this book.

Because customer requests are vetted and used to shape Financial Architect®, it has become much bigger than us in a collective effort or a consortium of sorts of ourselves, our clients and our customers. It is, in our humble opinion, as good as it gets and gets better everyday, not because of us but because of you.

Although we are former Wall Street financiers, we, too, are entrepreneurs.  We saw a need for both sides of the capitalization issue.  Entrepreneurs need capital and financial institutions want to invest it, but only into “quality deal flow”, which means companies that have a real chance of becoming very large, very soon.  The problem is that there is a huge gap between start-up and early-stage companies’ need for substantial amounts of capital and the financial institutions’ desire to fund quality deal flow.  The main mission of Financial Architect® is to revolutionize the way capital is raised by start-up and early-stage companies, not only in the U.S., but around the world. 

Financial Architect® is a patent-pending process designed to significantly reduce the cost and time involved in raising substantial amounts of capital through the issuance of securities and to do so in meaningful ways.

Financial Architect® is not a business-planning program – although it can be used as one if a business plan has yet to be produced.  Financial Architect® evolves a business plan into a very expensive securities offering document, using the deal structuring and securities offering document production software templates, for a mere fraction of the standard cost. 

More importantly, Financial Architect® instructs the entrepreneur on how to legally and effectively solicit and sell securities in compliance with federal and state securities laws to actually attract investors and raise capital in any market environment, while maintaining voting control and maximum equity ownership of their company. 

Financial Architect® has two programs for Operating Companies, which would include retailers, wholesalers, distributors, manufacturers, services companies, or any other type of firm that is not involved in Fund Management. Financial Architect® has four programs for Fund Management, as well. 

1. Private Placement Producer™ (for Operating Companies)
2. Public Placement Producer™ (for Operating Companies)
3. REIT Producer™ (for private Real Estate Funds and publicly traded REITs)
4. Film Producer™ (for private Film Funds and publicly traded closed end Mutual Funds)
5. Oil & Gas Producer™ (for private Oil & Gas Funds and publicly traded closed end Mutual Funds)
6. Venture Producer™ (for private Venture Funds and publicly traded closed end Mutual Funds)

Please see our website for further details. www.CommonwealthCapital.com

Although Financial Architect® evolves over time; it is currently comprised of 3 interdependent components that are designed to be used consecutively to enable one to accomplish the task of raising capital.

The E-Book:

“The Secrets of Wall Street – Raising Capital for Start-up and Early-Stage Companies,” is the primary educational piece that is designed to give one the required knowledge to correctly formulate a company’s operational and capitalization plan.  This component is fundamental in nature and it rarely changes. 

1. Securities Offering Document Production Tools:
2. The Seed Capital Bridge Notes™ module, included in the Private Placement Producer™, contains a securities offering document production template with instructions compliant to claim the accredited investor exemption 4(6) to jump-start the capital-raising process within hours. 
3. The Private Placement Producer™ and Public Placement Producer™ catapult the company’s larger development and expansion capital-raising effort.  The Private Placement Producer™ and Public Placement Producer™ include two interdependent sub-components. 
4. CapPro™ (and CapPro for Funds™. – we’ll refer to the term CapPro™ to represent both from here on).  CapPro™ is Capitalization Planner and Pro Forma Producer sub-module, which enables one to create a marketable deal structure for a securities offering compliant with GAAP (Generally Accepted Accounting Principles) standards.  This sub-module has a complete set of comprehensive instructions and an optional tutorial that are designed to lead one quickly through, what otherwise would be, a rather arduous process. 
5. PPM Producers™. These second sub-modules are, in addition to other tools, comprised of the securities offering document production text Template(s). These sub-modules have comprehensive instructions and an optional tutorial embedded into the Template documents, which one simply follows as they go through the process of converting their company’s business plan into a securities offering document.  This component is fairly fundamental in nature; however it does evolve over time, so we update the Financial Architect® System as necessary.

The Commonwealth Capital Club:

The Commonwealth Capital Club (CCC) is the third and final component.  The CCC is a password-protected area on the Company’s website, (See Members Only at http://www.CommonwealthCapital.com). The Commonwealth Capital Club contains the critical Compliance Components, Working with Professionals – Attorneys and Accountants, Financial Resource Links, Links to Accredited Investors from around the world, as well as, Securities Selling Techniques, which includes Marketing Strategies from the Zen Masters of Capital – successful Financial Architect End Users around the world.  This component is dynamic, fluid and changes often so it is important for a customer to access it regularly.

The Financial Architect® Principle:  Create highly marketable securities (deal structures); sell them directly to individual (passive) investors through a series of progressively larger offerings; expand your investor contact reach with each offering through elevated abilities of marketing (from a regulatory and affordability standpoint); and employ the assistance of professionals (your attorney, accountant and hire a VP of Finance from the securities industry – if and when warranted), as needed, throughout the entire process. 
I can cite many case studies of entrepreneurs who’ve successfully raised capital using Financial Architect® because these are the fundamental processes used on Wall Street. However, their success may not equate to your success. Without your belief in the logic, dedication and commitment to the process, the case studies are moot.

With that said if you seek case studies, look at the almost 15,000 publicly traded companies listed on the major stock exchanges in the United States.  Most have used one or more of the processes described throughout this book. Financial Architect® is a culmination of the most successful processes that have been used by the vast majority of publicly traded companies in their start-up and early stages. This system is not simply a list of processes used by these various publicly traded companies, but a focus on the combination of processes that work best in today’s marketplace for start-up and early-stage companies.

As previously mentioned, Financial Architect® has become much bigger than us.  We receive many requests by our entrepreneur customers and clients, their attorneys, investment bankers and accountants to add various attributes, improvements and additions to the Financial Architect® programs and the system in general.  If these requests will benefit Financial Architect® as a system and product line we happily meet those requests with no charge, as those changes ultimately create a system that quite frankly is unstoppable.  

I also mentioned that most publicly traded companies have used one or more of these processes. What about the rest? The rest were most likely funded by venture capitalists, and in the end, the owners retained a very small percentage of the company when it went public or was sold to a strategic buyer. In my opinion, that is not a success by any measure.

To be clear, there is no magic bullet. The process involves education, application, commitment, and follow-through: e.g. “work”!  Still, it’s by far the most effective means to raise substantial amounts of investment capital while maintaining the vast majority of common equity ownership and voting control.

Anything worth doing involves work, and no one else will do this for you, no one ~ legally that is. That said, you won’t be alone because you will be hiring the right professionals (attorneys and accountants) to assist you and although you will pay for their time with the capital you raise, you’ll still be in control.  Your attorney and your accountant will serve as your primary advisors in this process, but you manage the process with the assistance of Financial Architect®.  Properly applied, the knowledge you gain using Financial Architect® will make you extremely powerful in regards not only in raising capital, but in building your company, as well.

On Wall Street, we were at the top of the proverbial food chain.  Although the issuing company (our client firm) hired us to get the capital raised, we had the access to it, the knowledge to get it and the required administrative protocol to comply with federal and state(s) securities laws, so that they could keep it, and we… our commission.  Most often, the Wall Street investment bankers determined who would be the clients’ legal and audit firms.  The point being, you will learn the basics that will enable you to stay at the top of the food chain.  Our concern is to make sure you are always in control of the process.  Seemingly unimportant when you are just beginning and seeking expertise in the field, first hand knowledge of this process will guard you from the inevitable pitfalls of success. When money starts coming in the door – greed is always present.  Without practical knowledge on how to maintain control of many matters, you could get taken down…hard.    

Our principal aim, delivered through Financial Architect®, is to give every entrepreneur a chance at building his or her dream company.  It’s for those who normally could not afford the process, in time or money, to quickly, easily, and inexpensively produce the required documents at a mere fraction of the traditional cost.  To further entrepreneurial success in the capital-raising process, Financial Architect® is not designed to be just a securities offering document production program. It is certainly not just a cheap template.  On the contrary, anyone can create a securities offering document inexpensively with ineffective securities offering document production templates and/or services available on the Internet.   Financial Architect® is a holistic system of education, document production tools, investor contacts, compliance administration and more importantly; effective securities selling techniques to further assure that you do this right the first time.  An old Wall Street mentor of mine used to come into my office at E. F. Hutton and say “Hogan…if you don’t have time to do it right the first time how much time will you have the second time?”  The point was taken. Do it right the first time or not at all.  

For those who have tried to raise substantial amounts of capital from (and only to be rejected by) financial institutions, the information in this book may, at first, serve only to remind you of the time, money, and effort you have already wasted. On the other hand, you may be glad to finally know you can control the process from now on.  For those who have succeeded in raising substantial amounts of capital from financial institutions, such as venture capital firms, only to be hamstrung by ownership and/or voting dilution, this book will show you a way to get those financial institutions off your back…unless it is simply too late!

Know that it’s only too late if you and your management team have lost voting control either through ownership and/or voting dilution or by funding agreements such as term sheets that limit your ability to raise capital or vote. If it’s too late, then next time you build a company you will be armed with a new set of strategies that will enable you to dictate the terms of the deal and maintain the vast majority of your equity ownership and voting control.

For those who are just starting out or have bootstrapped their company to the degree that it can no longer grow with internally generated revenue, you may now realize that you must raise capital to continue building the company.  If so, the information contained in this book should serve as an excellent guide for maximizing your productivity in this endeavor and to help you avoid many pitfalls you might otherwise encounter.

Raising capital from institutions or from individual investors is the biggest game in town because it involves the ultimate prize in a capitalistic system—the transference and use of “other peoples’ money.” Although you may have good or even altruistic intentions for your company, its employees, your community, your industry, your country, or for the world, at “the end of the day”, it’s all about the money.   You can give money to your employees, your community and various other charities later, but for now you need to put your investors’ money first by designing a capitalization plan that ensures relative safety and a very good return on their investment.

Now, I am not writing this book to degrade the value of financial institutions.  On the contrary, they have their place and serve many valuable functions.  I am writing this book to teach for the benefit of your company.  Once formidably capitalized through your company’s own efforts, you may eventually choose to seek funding from these financial institutions.  If so, you will be able to approach them from a relative position of strength that allows you to dictate the terms of the deal.

How do you deal with these financial institutions from a relative position of strength?  By being in a position where they need you more than you need them!

Have you ever heard the maxim: “Banks will only lend you money when you don’t need it”? In fairness to banks, that’s not entirely true.  They do lend money to those who need it; it just never seems to be enough.

The maxim should be “Banks will only lend you substantial amounts of money when you don’t need it.” Fine, how do you get to a position where you don’t need it from them in the start-up or early stages of a company’s existence when revenues, let alone profits, are slim to none? You simply compete for capital from individual passive investors just as financial institutions do.

Let’s define financial institutions. Those would include traditional banks—commercial, community, or merchant—as well as investment banks, venture capital firms, private equity groups, insurance companies, pension funds, or any other formal institution that has been organized specifically to make investments on behalf of others.

What does “to make investments on behalf of others” really mean? It means that they are chartered through regulatory authority and/or by statute to make investments with funds they raise from individuals for the benefit of those individuals, first and foremost. Being true capitalists, they are allowed to make a profit, or in the case of a non-profit such as a pension fund to create revenue to cover their costs.

These institutions have a fiduciary duty to invest “other peoples’ money” in a prudent fashion with the expectation of a return on investment from the efforts of others (primarily from the management of - publicly traded companies, commercial real estate managed by professional property management companies, and so on). The list goes on and on, but I’m sure you get the idea.
The point:  All institutions raise capital from individual passive investors and your company can as well. At the end of the day, financial institutions do not own any money—people do, through stock ownership in those institutions.  Without people, institutions cannot exist.  And if the institutions that invest other peoples’ money cannot perform to the expectations of the individual investors, (people who ultimately own and control the money) they will move it. They will invest it elsewhere.  For many, this is their full time occupation – investing.

So, if individual investors do move it, how can you capture it?  By creating and selling securities that meet individual investor demand.   More on this in Chapter 10.

Once your company has grown to the point that you have ample capital (either from a securities offering or operational cash flow) and can afford a new management team member, consider creating and staffing a finance department (headed by a VP of Finance) within your company. Hire someone who has investor contacts and the skill sets to perform the tasks of selling securities and administrative compliance. Hiring a Vice President of Finance from the securities industry with the knowledge, skill sets, abilities, and investor contacts can pay huge dividends for your company.  Early-Stage Companies should consider this strategy as an option not a necessity. Rarely can a start-up company use this strategy. However, as one moves from start-up to early-stage it should be seriously considered. More on this strategy later.

Okay, that’s all fine and good, but how do you pay for all this? You pay for it with the proceeds from your securities offerings, capital on hand and/or current cash flow. How do I know the securities offerings will be successful? You cannot know. It’s like deep sea fishing.  You know there are fish in the ocean and you know they eat.  You just need to be able to give them what they want to eat; have enough time to search for the best spot; and/or hire professionals to assist you in the process.  You can only increase the probability to the highest degree possible by training someone within your company (most probably yourself during the start-up stage) to handle the task of raising capital using Financial Architect® or otherwise.  You only hire someone new if they have the necessary qualifications and investor connections for the next round of financing.  You could hire someone from the securities industry who might have the necessary qualifications and investor connections (with liquid funds for investment in your company) to handle the task. Do they need a securities license? No, as long as they are bona fide employees of your company. Do you need Financial Architect® to go through the process? No, you can learn enough by reading this book, with the example of a Private Placement Memorandum (Exhibit B), and by perusing the Internet to get the job done.

However, if you would like to save a great deal of time, effort and money you can purchase Financial Architect® from our website to create securities offering documents with marketable deal structures. Alternatively, you can hire a team of individual professionals or Commonwealth Capital Advisors to create your finance department and lead you through the process. In any event, with us it is the same process using the same system. 

We, at Commonwealth Capital Advisors, originally conceived our firm to be the source of quality deal flow for Wall Street investment banks. To achieve that task, we had to fly under the radar to avoid competitors, and nurture companies at their very start-up and early stages.  Like NFL talent scouts, we needed to go to the freshman and sophomore level of high school as opposed to hanging out at the junior and senior level of college – where all our competition is.  We had to take a 5 to 10-year time horizon, as opposed to the 2 to 3 year time horizon. We had to do the unaffordable. We and others have the knowledge and skill sets to assist these young companies in properly preparing for the investment banking or venture capital relationship but we, nor anyone else, has the time to address the sheer demand en masse.  We needed to get out of the “judgment game” and give all entrepreneurs a chance at success.  We needed to give all entrepreneurs the knowledge and tools to accomplish these tasks and develop the related skills on their own, hence, the need to write this book and to develop Financial Architect® as a turn-key system.

By enabling start-up and early-stage companies to self incubate their capitalization needs along with developing the organizational and operational structures that make for “quality deal flow” for our Wall Street brethren, we inadvertently became the source for start-up, early-stage and most seasoned privately held companies’ capitalization needs, as well. 

To further our cause, we had to position our company so as not to compete with other professional service providers, corporate and securities attorneys and accountants, who play a key role in the securities industry.  In the natural course of events, we have become a key source of quality deal flow for those professional service providers, as well.  Because we teach entrepreneurs to raise sufficient seed capital to employ the services of those professional service providers, these well-prepared and self-incubated entrepreneurs inherently become quality prospective clients for the attorneys and accountants.
 
We are former Wall Street securities professionals and institutional financiers who have made a 180-degree turn on the securities industry. In the past, it was our job to extract as much flesh (equity ownership) from a company for as little money as possible without killing it. By federal securities law, our fiduciary responsibility rested with the investor side of the deal-making equation.

Now, in sharp contrast, our fiduciary responsibility rests with the entrepreneur’s side of the deal-making equation. We have become the proverbial guard dogs for the entrepreneur.

The true power of Financial Architect® is this: If you can successfully go through this process, you will establish an extremely strong financial structure for your company. This invariably leads to unforeseen competitive advantages.  If you can grow your company to what Wall Street considers “Quality Deal Flow”, you will have more capital available to you than you’ll know what to do with – literally.   This means that your ability to buy up your competition will be a real option.

One last comment before we move on. An irony in all this development and testing of Financial Architect® was another stark and shocking discovery to us. From the data we received during the beta testing phase, it showed the percentage of successes higher for Financial Architect® End Users than for our clients engaged through our investment banking advisory services division. Some of our entrepreneurial clients started to fail for many reasons, primarily overall market conditions for their products and or services, but some failed because they became too dependent on us.  Eventually, our services may no longer required by our clients, because we tend to work ourselves out of a job as we inherently become too expensive once the “heavy lifting” is done.  These companies failed because they didn’t invest in developing and securing the knowledge of the processes; didn’t built their own internal finance departments; didn’t securing outside additional expertise in this field; and therefore, they couldn’t sustain the capital raising process.  Most viewed the process as an event.  In hindsight, we where actually doing them a disservice by servicing them.   Therefore, the best service we can give to you is enabling you to do this yourself through Financial Architect®.  Give a man a fish, he eats for a day.  Teach a woman to fish, she eats for a lifetime.