is an accomplished professional with more than 30 years of unyielding success in multiple industries serving both the private and government markets. Mr. Calaway was CEO of an Alaska Native Corporation. He guided that company successfully through the process of 8a certification to service the government set-aside provisions. Mr. Calaway has served as President, Founder, Executive VP Operations, Chief Operating Officer, VP/General Manager, Chief Executive Officer, Chief Financial Officer, VP Operations, VP Business Development and Controller of many successful corporations. These companies range from small start-up companies to Fortune 500 companies such as Kodak. One of Mr. Calaway’s companies was a government contractor that was listed as an ‘Inc. 500’ company. He was twice nominated “Entrepreneur of the Year” by Inc. Magazine
The banking and financing methods we are used to in the past have changed forever and will never come back. Most companies seeking capital cannot compete in the financial marketplace, as it currently exists. So you only have a few choices; don’t grow and limp along hoping your bank won’t call the loan, do something different, sell your business or close the business.
Engineering of a Public Company
Though there are endless possibilities of how to solve these problems, we are only going to focus on three types: (1) those profitable growth companies that need capital and can’t find it, (2) those businesses that are trying to sell but the buyers can’t find financing for the purchase, and (3) those public companies that have a poor business strategy with a poor capital structure.
The Company Needing Growth or Exit Capital. Those companies that need growth capital, or; have their business for sale and a qualified buyer but can’t find the capital are prime candidates for a Registration. In today’s economic conditions, the goals have changed as to how the aging baby boomers can transition out of their private companies or secure growth capital at an acceptable value. In order for the model to work the company must be profitable and cash flow positive and have been in business for 5 years. In addition, operations management has to stay for a minimum of 2 years.
The model works best for a public company that reflects profitable fundamentals than private companies with limited liquidity. The public markets almost always places a significant higher value on public companies than they do on a private company. It should be noted however, that it costs more to be public than private, and without certain economies of scale, it would not be justifiable. On the other hand if you assume, that the business is a well-run profitable business it will be able to bear the added cost of being public.
As a qualifier, we are not talking about a reverse acquisition model or short cut to becoming publicly traded; but rather, planning and execution of a transaction that will result in a public company thru the registration process. The company will have real earnings and sales, which is generally viewed as bullish for a stock. Many believe that being a legitimate public company is reserved for big companies that are raising huge sums of money. That is just not so! Smaller companies can be very successful as public companies and raise smaller sums of money as long as management understands why they are public, and also understands that there is no substitute for transparency and profitability.
So How Do We Do This, How Much Does it Cost and How Do We Get this Done? It cost approximately $125,000 if you use our model, if you can find an underwriter who will take the offering it will cost approximately $400,000+. The reason it cost so much less using our process is Direct Public Offering platform …. investorLYNX.
If you don’t have the $125,000 we go out and find four sponsoring partners to invest the offering costs to file the S-1 registration (IPO) along with the marketing and selling of the securities. The sponsor would receive a fully secured interest in the public vehicle in the form of convertible preferred stock. If the placement of securities were unsuccessful the sponsor would be able to sell the public company to recover their investment.
To get the registration prepared you will need legal and accounts professionals to prepare the registration. The costs associated with this part of the process are included in the $125,000. You can use our recommended professions or your own and pay the difference in the fees. Once the regulators have approved the registration we can begin the marketing of the offering using our investorLYNX platform. The cost to use the platform is included in the $125,000. Since the offering is self-directed the company officers and talk to potential investors and secure their investment.
The Troubled Public Company. Before you can move the company forward the company has to have a traditional and proper capital structured so that potential investors will even think of investing! The area of focus and resulting structure are as follows:
§ Reduce the authorized shares is below 20M.
- Reduce the outstanding shares to between 10% and 50% of the authorized.
- Target float to 15% to 50% of outstanding shares.
- Remove all “poison pill” stock series.
- Fix the balance sheet specifically the debt.
- Focus the management on business fundamentals.
- Get the company profitable.
- Secure acquisition agreements to fix the income statement.
- Management has a 2-year lockup on their stock.
Once you have these items completed now you are ready for capital. Capital can take on many different formats and how you go about that is described later in the document.
Today’s Public Market Worldwide, according to a source at Bloomberg, there are about 63,000 publicly traded companies. There are roughly 15,000 publicly traded companies in the US, of which about 1/3, are traded on exchanges and the other 2/3 traded in various over-the-counter markets. There are also about 7,000 U.S. companies, which are on the "grey market" which are companies not listed on an exchanges.
There are roughly 22,331,782 private businesses in the US! Why so few public companies? The answer is a needed streamlined process and controlled cost! What would be the economic impact on the US economy if only .005 % (1,117) on the private companies where to go public? At an average of $10 million raised you would create $11.17 billion in acquisition/transition capital.
In summary, we believe that the opportunities for small business needing growth capital and the owners of small business must migrate to new capital markets to get the job done. This is evidenced by the growing trend in the capital markets and Small Business Development Group can help you get there.
investorLYNX © is a secure Web portal providing subscribers with the qualified contacts and access to timely information necessary to complete complex business transactions. It offers a blend of technology and human interaction between all the stakeholders and participant. This portal creates the opportunity to combine the art and science of the deal structure, process and its compliance requirements.
Small Business Development Group, Inc. (SBDG) is both a public holding company and a business solutions services firm. SBDG is developing a portfolio of operating companies, through acquisition, in established industry segments. The Company has two operating units: the portfolio of operating companies obtained through acquisition; and, a business solutions service firm providing client companies the same services it employs to grow its own portfolio companies.
investorLYNX © offers its registered clients the following resources:
- A listing platform
- A community of business professionals
- A community of vetted investment resources.
The various users of InvestorLYNX pay a subscription fee to use the portal, then the subscriber’s act independently for their own business endeavors.