Look at NEOM who obtained financing in 2002 from Cornell and read the excerpt below...Thought this would be of interest
Pipes have often been perceived negatively, particularly by shareholders, since the company's share price drops in the short term and the stock is diluted. Indeed, some companies using Pipes have ended up bankrupt as their value diminished so rapidly. As a result, some hedge funds have tweaked Pipes to have a broader appeal to small-cap companies and, in turn, less volatile returns for investors.
One such fund is Cornell Capital [see story, this issue]. Dave Dodge, CFO of NeoMedia Technologies, a mobile phone software developer, was looking to raise additional funds for acquisitions and operations growth three years ago when he heard about the financing structure offered by Cornell. "We looked at private placements and debt but were intrigued by the equity-line financing Cornell offered. The structure allows us to control cost of capital by giving the company, rather than the fund, the ability to draw the cash when we need it. Our shareholders were worried about dilution. But when we did our first drawdown at the end of 2002, our stock was about 2 to 3 cents. This year our stock has been as high as 72 cents. And our market cap has gone from a few million dollars to as much as $250 million over that period."
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