Monday, December 8, 2014

Professor of UC Berkeley Steve Blank Talks to Dan'l Lewin of Microsoft on How to Build a Great Company, Step by Step

This video has a candid conversation on Start-ups and building businesses.  The idea of business plans in the "start-up" phase is challenged and replaced with conversation of "business models".  A must see for all CEO and Entrepreneurs.

The Commonwealth Club presents:

Join Silicon Valley serial entrepreneur-turned-educator Blank in a lively discussion with Dan'l Lewin of Microsoft. This program will introduce best practices, lessons and tips that have swept the startup world, offering a wealth of proven advice and information for entrepreneurs of all stripes. Hear about a tested and proven Customer Development Process, helping get it right --and how to "get, keep, and grow" customers.

Steve Blank, Serial Entrepreneur; Founder, E.piphany; Professor, UC Berkeley and Stanford Engineering; Author, The Startup Owners Manual

In conversation with Dan'l Lewin, Corporate Vice President of Strategic and Emerging Business Development (SEBT), Microsoft


The MicroCapCompany Team
Posted By: Nicholas Coriano 
Follow Nicholas Coriano on Twitter

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About the Author: Nicholas Coriano is a Business Consultant and Planning Guru.  He is a graduate of The University of Connecticut Business School and the John Marshall Law School in Chicago.  He has worked at Merrill Lynch, The New York Stock Exchange and as an Investor Relations Agent & Consultant to Micro Cap Companies and Penny Stocks.  He is the founder and author of The MicroCapCompany.com a blog focused on providing information and advice to Micro Cap Company Executives and Investors.  You can also find him blogging about Social Media, SEO, Web Development and Tech on PushYourRank.com

About MicroCapCompany.COM: MicroCapCompany.COM (The Blog) is a blog focused on providing articles, news and information on the micro cap sector and start-ups.  The Blog is a free service offered by Cervitude™ Investor Relations (a micro cap investor relations firm) and offers compensated research reports and business plan writing services for micro cap companies and penny stocks.  If there is a particular topic you would like to see covered on The Blog, email CervitudeNetwork@gmail.com, If you would like to advertise on The Blog, click here

Have tips, advice, comment or suggestions about this article??  Comment below or start a conversation by mentioning us on twitter!

Saturday, November 8, 2014

The True Cost of being a Publicly Traded Micro Cap Company or Penny Stock

If you believe the hype on the Internet, an IPO (or taking your company public) is the answer to all of your company problems.  You will get boat loads of cash, investors will our in from all over the world and the prestige you gain from being listed on a stock exchange will make your email inbox fill up with offers to sit on other company boards.  Maybe....

The truth is that in the micro cap sector, this is rarely the case. If you are a start-up or a company looking for financing, you will probably run into a consultant that advises you to reverse merge or take your company public by listing over-the-counter on an exchange such as OTCMarkets. They may show you some success stories and proclaim that financing is easier to come by when you are listed publicly.  Be wary....

The true cost of going public is one of countless expenses that a company should factor before taking the plunge.  A quick search on the Internet will have you believe that you can list your company on a stock exchange (either in the USA or abroad) for $60,000-$100,000.  This may be true, but this is just the start of an on-going expense list that CEOs and managers should be aware of before making the decision to take a company public, especially as a penny stock.  The true cost of going public includes but is not limited to:

  • Filing Fees with The Stock Exchange: Depending on where you list your company, the fees vary as well as the requirements.  Over-The-Counter exchanges often have less nominal fees than the major stock exchanges such as NYSE or NASDAQ and often times (depending on what tier you list) will not have disclosure requirements.  
  • Professional Fees associated with an IPO or Reverse Merger: Lawyers, Accountants and "Consultants" are all part of the mix when going public.  Normally an Attorney will have to file your paper work with the SEC and your company will need an audit from a professional accounting firm.  
  • Investor Relations Fees: A good IPO or Reverse Merger will need a strong Investor Relations teams to introduce the company to Investment Bankers, Broker Dealers and handle Press Releases and "Road Shows".  These companies can charge between $5,000-$15,000 per month and some of the best IR Firms want equity or stock options which can amount to in excess of 10% of your company.  
Now these fees vary but if paid at once, which is advised, they quickly add up to $100,000-$200,000 depending on the size and notoriety of the firms hired.  Keep in mind that all these fees are before you become public or raise money such as in a traditional IPO.  Micro Cap Companies and Penny Stock IPOs are significantly different than the average IPO on NYSE, for example, the investment bankers and broker dealers commonly do NOT buy the stock pre-IPO and rather buy the stock at a discount after the company has gained liquidity on the public markets.  This is often a conundrum because liquidity is formed when multiple buyers and sellers are in the market and many penny stocks and micro cap companies begin trading over the counter with minimal to no shareholders.  

So now your company is public...and the fees listed above will continue.  The (1) Filing Fees with the Stock Exchanges come quarterly or annually (2) Professional Fees continue monthly whenever the company needs to make an important disclosure or file quarterly reports and (3) Investor Relations fees are billed monthly.  (Often times Investor Relations fees include warrants, stock options, or common stock in the trading company; these form of "fees" cause downward pressure on the stock when the IR Firm goes to "cash-out" of their position, thus increase the true cost of the IR Firm)

If the only reason you are considering an IPO or Reserve Merger is for easier access to financing, please reconsider.  Especially in the Micro Cap Market and Penny Stock Market, financing can also be more difficult than in Private Equity.  In most over-the-counter markets for example, the purchaser of your company stock must be an "accredited investor" thus limiting the pool of investors to those classified as "accredited" by the SEC.  In these situations, you actually do not have access to the "public" markets but rather to a select few groups or individuals of high net worth.  

If you are not well versed in the public markets, the best advice is to take it slow and ask many professionals in the industry for their advise.  Keep in mind their biases (a lawyer for example will most likely always tell you that you need an Attorney for certain filings when in fact this may not be the case).  If you can afford it, hire a third party outside consultant whom will make sure that every move is the best for you and your company-even if it means you do not take your company public.  

Follow Nicholas Coriano on Twitter

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About the Author: Nicholas Coriano is a Business Consultant and Planning Guru.  He is a graduate of The University of Connecticut Business School and the John Marshall Law School in Chicago.  He has worked at Merrill Lynch, The New York Stock Exchange and as an Investor Relations Agent & Consultant to Micro Cap Companies and Penny Stocks.  He is the founder and author of The MicroCapCompany.com a blog focused on providing information and advice to Micro Cap Company Executives and Investors.  You can also find him blogging about Social Media, SEO, Web Development and Tech on PushYourRank.com

About MicroCapCompany.COM: MicroCapCompany.COM (The Blog) is a blog focused on providing articles, news and information on the micro cap sector and start-ups.  The Blog is a free service offered by Cervitude™ Investor Relations (a micro cap investor relations firm) and offers compensated research reports and business plan writing services for micro cap companies and penny stocks.  If there is a particular topic you would like to see covered on The Blog, email CervitudeNetwork@gmail.com, If you would like to advertise on The Blog, click here

Wednesday, October 8, 2014

Evaluating a Micro Cap Company's "Going Concern Assumption"

In publicly traded micro cap companies, as in life, death is a concern. While working with Investor Relations Firms, Publicly Traded Micro Cap Companies and Venture Capitalist; I attended a micro cap conference where smaller public companies present and Wall Street Investors convene to network and deal.  While at one of these conferences, I asked a representative of a public company (valued at about $10 Million, and with little-to-no-revenue) if he thought his company was "A Going Concern"...he like almost every CEO or company pitch-man will say "Yes".  But in the micro cap sector (and even larger market cap sectors) this question can be answered via analysis from external sources.  Let's look at a basic definition of what a "Going Concern" is...
A going concern is a business that functions without the threat of liquidation for the foreseeable future, usually regarded as at least within 12 months. It implies for the business the basic declaration of intention to keep running its activities at least for the next year, which is a basic assumption to prepare financial statements considering the conceptual framework of the IFRS. Hence, the declaration of going concern means that the entity has neither the intention nor the need to liquidate or curtail materially the scale of its operations.
 In other words a company is considered a going concern if there is no evidence that the company will have to liquidate it's position within the next 12 months to maintain financial solvency.  The easiest way to evaluate a company, to assure it is a going concern, is to hire a professional accounting firm to audit the company. But if you are not in the position to do this, here are a few tips to evaluate whether a company will remain solvent for the next 12 months (on the public markets):
  • Reviewing Company Filings with Securities Agencies, Courts, State Governments etc.
  • Calling and Interviewing Company executives, consultants, accountants and agents.
  • Evaluating company sales, market space and sector.
When performing the before mentioned bullet points, you are looking to see how stable the future of the company really is....if the CEO has been replaced 3 times in the last 2 months, this does not necessarily mean the company will go out of business, but you should take this into account.  The company's financial statements can also give a good indicator of whether the company will remain solvent as well, but especially in the public sector, take this with a grain of salt.  Many company's run in debt and while it may look on the balance sheet that the company will not be able to make it's liabilities, many find financing or have revolving lines of credit not always apparent in their filings.  

Are you a professional investor or industry veteran and have your own way of evaluating whether or not a company is a "going concern"? We would love to hear from you, please comment below and tell us your experience with Micro Cap Companies, Public Companies, Penny Stocks etc. 

The MicroCapCompany Team

Follow Nicholas Coriano on Twitter

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About the Author: Nicholas Coriano is a Business Consultant and Planning Guru.  He is a graduate of The University of Connecticut Business School and the John Marshall Law School in Chicago.  He has worked at Merrill Lynch, The New York Stock Exchange and as an Investor Relations Agent & Consultant to Micro Cap Companies and Penny Stocks.  He is the founder and author of The MicroCapCompany.com a blog focused on providing information and advice to Micro Cap Company Executives and Investors.  You can also find him blogging about Social Media, SEO, Web Development and Tech on PushYourRank.com

About MicroCapCompany.COM: MicroCapCompany.COM (The Blog) is a blog focused on providing articles, news and information on the micro cap sector and start-ups.  The Blog is a free service offered by Cervitude™ Investor Relations (a micro cap investor relations firm) and offers compensated research reports and business plan writing services for micro cap companies and penny stocks.  If there is a particular topic you would like to see covered on The Blog, email CervitudeNetwork@gmail.com, If you would like to advertise on The Blog, click here

Monday, September 8, 2014

Google Venture Workshop Video: The Science of Building a Scalable Sales Team

Google Ventures | Learn how Hubspot built out its sales team -- from their first hire to a team of over 200 employees. Learn how to recruit the right salespeople, provide consistent training, ramp up lead generation, and continuously improve your sales team. Mark Roberge is Chief Revenue Officer for Signals, HubSpot's freemium sales tool.



The MicroCapCompany.com Team

Blog Posted by: Nicholas Coriano 
Follow Nicholas Coriano on Twitter

........................................................

About the Author: Nicholas Coriano is a Business Consultant and Planning Guru.  He is a graduate of The University of Connecticut Business School and the John Marshall Law School in Chicago.  He has worked at Merrill Lynch, The New York Stock Exchange and as an Investor Relations Agent & Consultant to Micro Cap Companies and Penny Stocks.  He is the founder and author of The MicroCapCompany.com a blog focused on providing information and advice to Micro Cap Company Executives and Investors.  You can also find him blogging about Social Media, SEO, Web Development and Tech on PushYourRank.com

About MicroCapCompany.COM: MicroCapCompany.COM (The Blog) is a blog focused on providing articles, news and information on the micro cap sector and start-ups.  The Blog is a free service offered by Cervitude™ Investor Relations (a micro cap investor relations firm) and offers compensated research reports and business plan writing services for micro cap companies and penny stocks.  If there is a particular topic you would like to see covered on The Blog, email CervitudeNetwork@gmail.com, If you would like to advertise on The Blog, click here