Tuesday, July 1, 2014

Raising Your First $1,000,000 from Investors for Financing Your Venture

Raising money for your venture is no easy task.  Raising $1,000,000 is even harder.  There are somethings you should know before you even attempt to do this.  Below is a video from Google Ventures that explains some of the pitfalls and technical aspects of Series A financing.  While the entrepreneur focuses on raising money for a "tech" company, many of the principles are applicable to all fundraising.  Check it out and let us know what you think....



The MicroCapCompany Team

Monday, June 23, 2014

A Micro Cap Companies Remedies for Breach of Contract Lawsuits

As we wrote before, a valid contract for a micro-cap company can be the difference between a profitable quarter and a quarterly loss.  If the case becomes that you must take another party to court for a "breach" of contract, there are remedies that the court will implement to make the non-breaching party whole again.  These remedies for breach of contract include:
  1. Specific Performance
  2. Damages
  3. UCC Remedies
  4. Avoidable Damages
  5. Restitution
In the above five remedies, the courts weigh what kind of contract, how the parties acted, whether it is a service or good at issue and many other factors in deciding which remedy to grant.  

The remedy of Specific Performance is never granted in services contracts.  Specific Performance makes the breaching party perform as if he or she did not breach.  In other words, the courts orders a Specific Performance, usually the sale of a good already promised to the buyer.  The Specific Performance of "services" amounts to involuntary servitude and thus the courts never grant this remedy for services. 

The remedy of Damages consist of (1) compensatory damages and (2) liquidated damages.  

Compensatory damages include expectation damages (benefit of the bargain).  Expectation damages generally put the parties in as good as a position as if the parties had performed the contract.  Compensatory damages also include consequential damages, which are only available if they where foreseeable.  Consequential damages are damages suffered as a consequence of the breach such as storing expenses, shipping expenses etc.

Liquidated damages are those stated in the contract in the case of a breach.  Liquidated damages will be granted by the court if (1) they were difficult to calculate at the time the contract was formed (2) they are a reasonable forecast of the damages likely to occur and (3) they are NOT punitive.  

The UCC Remedies govern the sale of goods.  For the seller they include (1) commercially reasonable resale damages (2) market price damages (3) profit and (4) action for price.  For the buyer they include (1) cover damages (2) market price damages (3) specific performance and (4) breach of warranty.

The last two remedies are "Avoidable Damages" - "Duty to Mitigate" and "Restitution".

Avoidable Damages or Avoidable consequences doctrine is a legal principle that places the responsibility of minimizing damages upon the person who has been injured. The plaintiff after an injury or breach of contract should make reasonable efforts to mitigate the effects of the injury or breach.

Restitution is usually awarded where one party has provided a benefit to the other party and it is awarded to repay the party providing the benefit the reasonable value of the benefit he gave. Typically, restitution is awarded in situations where one party has provided a benefit to another party under a contract and that contract turns out to be unenforceable.

A micro cap company should be aware of these Legal Remedies and take advantage of situations where contracts are in place and they are not at fault for the breach.

The MicroCapCompany.com Team
Author: Nicholas Coriano

Feel free to add meaningful comments, questions or concerns below in the comment section.  If you are a law firm or micro cap consulting firm that would like to advertise with us, please click here. 

Monday, June 16, 2014

2014 Summer Review of Business Plan Writers and Consultants

This post mainly focuses on firms that can develop and write a business plan.  This post is meant as a directory of a few business plan writing firms that can finish the job.  In 2011 we reviewed a few business plan writers and this list will include them as well as some new Business Plan Writers we have found.  Of course we are a bit bias considering we write and develop business plans, research reports and marketing plans...but nevertheless;

NicholasCoriano.com: Nicholas Coriano is the founder of several businesses and online websites and has written business plans professionally since 2010.  He has a degree in Business Finance and a Law Degree as well as experience on Wall Street and runs several successful businesses.  He offers several business plan solutions as well as financial forecasting, business formation and investor leads.  He is located in NY/CT

Cayenne Consulting: Cayenne Consulting expanded to the entrepreneurial hub of "Silicon Alley" in 2005. The founder, Akira Hirai, has strong ties to the area - after graduating from Harvard College in 1989, he lived in Manhattan for 10 years before moving west during the Dot Com era.  Their New York business plan consultants have worked with scores of startups and emerging ventures, and have deep experience in a wide range of industries including software/Internet/mobile/social, financial services, medical devices, apparel & jewelry, alternative energy and clean tech, telecommunications, restaurants and bars, real estate, and more.  The team is located throughout the USA

GrowThink: Started in 1999, Grow Think Business Plans has created over 3,000 business plans and also creates a pathway to financing your business.  As of recently, Grow Think has expanded their team of professionals and has over 40 members to choose from for writing your business plan.  The team is headquartered in Los Angeles, CA and Mount Kisco, NY

Bplans.com: Not really a business plan writing service, but software for you to create and write your own business plan.  Many business plan writers use this software to format and layout their business plans.

MasterPlans.com: MasterPlans claim is to be "The business plan experts" and separates your business plan development among their team.  Their business plan writing service includes financial modeling and research as well as formatting.  The team is headquartered in Portland, OR

PlanitBusiness.com: The website has been in business since 1996 and claims to provide the link to Investor Funding.  The team has an Ivy League MBA at the helm and has written business plans for celebrities and athletes.  The team is headquartered in Dallas, TX

Butler Consultants: Butler Consultants writes three main levels of business plans: Level 2, Level 3, and Specialty Plans. Our Level 2 Plan is designed for Small Business Association (SBA), Bank, or Grant funding. The Level 3 Plan is designed to attract Angel Investors, Private Investors, or Venture Capitalists. Our Specialty Plans meet additional needs that may not be covered in the Level 2 and Level 3 business plans. All business plans include our custom financial statements and invaluable market research. Butler Consultants provides attentive, personalized service while consulting with you to build a professional plan that fits your unique needs.  The team is located in Plano, TX

MicroCapCompany.com: We write and research business plans, research reports and case studies for small and large companies.  Are focus is on public companies trading over the counter and penny stock companies looking for solid investor presentations and business plans that can be formatted as power points and elevator pitches.  The team is headquartered in Westchester, NY

This list is not meant to be a recommendation to use any services listed above, but as a lead introduction to several business plan writing services.  There are plenty of others online and offline.  When developing a business plan, make sure you know what you are trying to accomplish, for example are you looking for:

  • an "elevator pitch" - a three minute summary of the business plan's executive summary. This is often used as a teaser to awaken the interest of potential funders, customers, or strategic partners.
  • an oral presentation - a hopefully entertaining slide show and oral narrative that is meant to trigger discussion and interest potential investors in reading the written presentation. The content of the presentation is usually limited to the executive summary and a few key graphs showing financial trends and key decision making benchmarks. If a new product is being proposed and time permits, a demonstration of the product may also be included.
  • a written presentation for external stakeholders - a detailed, well written, and pleasingly formatted plan targeted at external stakeholders.
  • an internal operational plan - a detailed plan describing planning details that are needed by management but may not be of interest to external stakeholders. Such plans have a somewhat higher degree of candor and informality than the version targeted at external stakeholders. 
All of these items listed above can be considered a business plan, but will end up being formatted differently.  Some services are all encompassing, leaving you with all of the above, and some will target their report (and pricing) to exactly what you need.  Hope this was helpful, any comments, suggestions or questions, just leave a short message in the comment area below:

Monday, June 9, 2014

A Look Into How Google Ventures Chooses Start-ups & Companies to Invest In

A recent interview with Bloomberg explains what Google executives look for when investing in start-up companies and small businesses.  Google Ventures provides seed, venture, and growth-stage funding to the best companies — not strategic investments for Google.  They have invested in more than 225 companies, including Uber, Nest, and RetailMeNot. They provide these companies unparalleled support in design, recruiting, marketing, and more.

For more information about Google Ventures, check out their website at http://www.gv.com/about/

The MicroCapCompany Team