Three Options for Finding Capital

Where there once were two options for private companies to find capital, now there are three.


1.  Staying Private: 

Private Placement Offerings – One way for a private company to obtain capital is through a Private Placement Offering (PPM). These are generally available only to accredited investors, which eliminates the majority of potential investors. PPMs are time consuming and expensive to set up. They cannot be advertised and must be offered by word of mouth. There is no market available to trade these offerings which makes them illiquid and raises the risk to investors.

Venture capitalists - They generally take control of the business in which they are investing and require a high rate of return. Loss of control would generally make this a last option for most businesses to obtain capital.

Borrowing from a bank – It can be difficult and expensive for private companies to obtain bank loans in today’s business environment. This is largely because the business does not have liquid assets to back the loan. Borrowing money will also decrease the valuation of the business.

2.  Going Public (IPO):

An IPO can cost over $1 million and take up to two years.

Public businesses are required to make extensive federal and state filings and reports which is very expensive and time consuming.

Public companies records and inner-workings are open to public scrutiny.

Private business owners often do not understand the stock markets and are fearful of losing control of their stock. 

3.  The Independent Stock Market (ISM):

The Independent Stock Market provides a marketplace for private business owners to offer some of their personal stock for sale to the public.

  • ISM allows for advertising and the stock can be sold to anyone.
  • The business owner will maintain control of his business.
  • The business will not need to borrow money to raise capital.
  • The valuation of the business will increase because the company stock becomes liquid.
  • ISM is a simple buy/sell market without any derivates or options that make the public stock markets so volatile and risky.

ISM provides the advantages of publicly traded companies and eliminates or greatly decreases the disadvantages.

 

 

 

 

 


Find out how ISM's
Orchestrated Liquidity™
is a better option for
accessing capital than:

PPMs
Bank Loans
Crowdfunding
Venture Capitalists
Angel Investors
Traditional Stock Markets



Contact ISM Today!


If you own a privately held company and are thinking about enjoying the benefits of liquidity without the challenges of the traditional stock markets, contact the Independent Stock Market.