On4 Communications Inc (ONCI)

[N.A.T.]

You'd be right, if all he wanted was shares. This type offering gives needed cash to the company directly, for new shares, to be used in a specific way to benefit growth. The billionaire (your words) could buy shares on the market, but his purchases would not help the company. Steve has to "sell" the reason behind the offering to the new investor to show the value the investor is getting for this investment, why he should spend it in this way, and how he will eventually profit from executing the offer.

The new investor is basically backing the growth in a needed area, thereby increasing the value of his/her investment. Just buying shares on the open market would have much greater risk, if the company could not continue to grow because of lack of funds.

At least, this is how I see it. Hope it helps.