Monday, March 13, 2017

What is an Accredited Investor?

As defined in Rule 501 under Regulation D, refers to the type of investor that is not required to receive detailed offering materials in a Regulation D offering.  Generally means an individual with $200,000 in recent and expected annual income (or $300,000 when combined with one's spouse) or $1 million in net worth, a broker dealer, bank or institution, any entity not formed for the purpose of the investment in question with at least $5 million in assets, or an entity all of whose equity owners are accredited.  

In 2016, the U.S. Congress modified the definition of an accredited investor to include registered brokers and investment advisors. Also, if a person can demonstrate sufficient education or job experience showing his professional knowledge of unregistered securities, he is also considered an accredited investor.

Hope this was helpful, feel free to comment below,

-Nick Coriano

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About the Author: Nicholas Coriano is a Business Consultant.  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 is currently a partner at Cervitude Intelligent Relations, which specializes in Investor Relations for companies valued under $1 Billion USD.

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 for micro cap companies and penny stocks.  If there is a particular topic you would like to see covered on The Blog, email us. If you would like to advertise on The Blog, click here. 

Monday, March 6, 2017

Why You're Title Doesn't Matter As Much As You Think...Or Does It?

A conversation with a client and the book "The Hard Thing About Hard Things" by Ben Horowitz has made me ponder about the importance of titles.  Or how non-important titles could be. 

In the conversation with my client, she was debating with herself on what title to call herself.  She is the owner of a boutique consulting firm and has a big pitch in the coming week and decided to call herself an "Organizational Phycologist".  When she asked me what I thought about the title as compared to the title of "CEO" I gave her very straight forward advice:
When you are pitching a potential client, the client doesn't care what you call yourself.  More importantly, the client cares about how you make them feel and what you can do for them.  At times, it may be better to call yourself "chief problem solver" or "the person that helps you make more money".
In this context, where she is pitching other business owners on how to help them grow, truly what you call yourself is not as important as what message comes across.   If the person sitting across from you doesn't believe you can help them, they won't care what you call yourself.

In the book "The Hard Thing About Hard Things" by Ben Horowitz, the author goes into examples of how titles are given in organizations and how they may effect the organization and it's output.  Even how it may effect the culture of the organization and the humans working therein.  He offers two ways to think about it.
  1. Titles are free and it is the cheapest way to attract talent to an organization, after all, you don't have to pay extra to call a particular person something or another.
  2. Titles should be held to represent the job function and the position in the organizational structure of the company. 
These two ways of thoughts are completely at odds with each other and the author goes on to state that sometimes one way is better than the other.  After all, at some point people need to know where they fit into the pyramid of the business. And sometimes, it doesn't matter as long as the work is getting done. 

When I worked for Merrill Lynch my supervisor was a Vice President.  Fresh out of college I tried to flatter her by saying "Wow, a Vice President!  I'm honored to be working for you!" to which she quickly quipped back "They give out titles like water here" followed by a chuckle.  Indeed she was right, over my next few weeks at the company it seemed as though there were 8 associates and 30 Vice Presidents at the office.  Although I knew who my supervisor was, I could imagine this being a hierarchy nightmare for those looking from the outside in.  But in a field where all that mattered was how many "accounts" you had, the title was not important.  The measure of progress or how well someone was doing was delineated by how much money each money manager had under management..not their title.  This is not the case in other companies where the jobs are strictly measured by title; such as in the military. 

In my career at multiple startups, titles where the only compensation were we actually had leverage.  In one startup where we could not afford to pay anyone; everyone was President of this or that.  Now this may seem confusing when it came time for decision making but in a startup the decision making process was so democratic and flat that it didn't matter if there was a hierarchy of title. 

So do titles really matter?  Yes they do!  Depending on the organization depends to what degree they actually matter.  Have an opinion, story or comment?  Please continue the conversation below in the comment section. 

Hope this was enlightening. 

-Nick
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About the Author: Nicholas Coriano is a Business Consultant.  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 is currently a partner at Cervitude Intelligent Relations, which specializes in Investor Relations for companies valued under $1 Billion USD.

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 for micro cap companies and penny stocks.  If there is a particular topic you would like to see covered on The Blog, email us. If you would like to advertise on The Blog, click here. 

Monday, February 27, 2017

How The Economic Machine Works by Ray Dalio

In this video, we hear from Ray Dalio. Mr. Dalio is an American investor, hedge fund manager, and philanthropist. Dalio is the founder of investment firm Bridgewater Associates, one of the world's largest hedge funds.  As we have mentioned time and time again, we like to learn investing and business from the best and brightest minds.  Here is his take on how the economic machine works:



-Nick Coriano

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About the Author: Nicholas Coriano is a Business Consultant.  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 is currently a partner at Cervitude Intelligent Relations, which specializes in Investor Relations for companies valued under $1 Billion USD.

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 for micro cap companies and penny stocks.  If there is a particular topic you would like to see covered on The Blog, email us. If you would like to advertise on The Blog, click here. 

Monday, February 20, 2017

What is a Nano Cap Stock?

A nano cap stock is a stock with a market capitalization of less than $50 million dollars.  While some industry firms such as market markers, venture capital, investor relations firms and other wall street firms have different definitions and some companies bunch nano cap companies with micro cap companies (firms with market capitalizations under $300 million. 

A nano-cap stock has very similar features to micro cap companies in that they at normally thinly traded and trade on smaller stock exchanges or over the counter on the OTCBB or the OTC Markets Inc. 

A nano cap stock with a market capitalization does not necessarily mean that the stock is a penny stock.  As we have discussed before, the market capitalization of a company does not decide whether or not it is a penny stock.  It thus follows that a nano cap stock can be priced at any dollar amount.  It should be noted that many nano cap stocks are in fact penny stocks. 

Nano cap stocks are considered extremely risky and have been subject manipulation by stock promoters and pump and dump schemes.  These stocks are among the riskiest stocks that can be purchased. While their are inherent risks in trading nano cap stocks, their are also some advantages.  Most mutual funds and institutional investors are prohibited from buying stocks under a certain market capitalization.  This means nano cap stocks leave speculators and smaller cap investors the opportunity to beat some of these fund investors. 

Hope this was helpful, feel free to comment below,

-Nick Coriano

______________________________________________________________
About the Author: Nicholas Coriano is a Business Consultant.  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 is currently a partner at Cervitude Intelligent Relations, which specializes in Investor Relations for companies valued under $1 Billion USD.

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 for micro cap companies and penny stocks.  If there is a particular topic you would like to see covered on The Blog, email us. If you would like to advertise on The Blog, click here. 

Monday, February 13, 2017

Understanding The Creation of A Contract

Contracts in general can be created either
  • expressly (by language either oral or written): this is a basic written contract or verbal agreement (remember contracts can be formed verbally).
  • implied in fact (by conduct): this is created when conduct shows that there was a mutual manifestation of assent by the parties to enter into the contract by the parties actions rather than by their words or writings. 
  • Quasi-contract: This is not a contract rather a contract is constructed by the courts to avoid unjust enrichment of one of the parties. This is the case when one party would benefit if no contract existed and it would be to their detriment to not construe a contract.
As to validity of a contact, a contract can be a:
  • void contract: this means the contract has no legal effect.  Not having any legal effect means that neither party can enforce the contract.
  • voidable contract: this means the contract is valid but can be voided by one of the parties due to some defense the party may have against the contract.
  • unenforceable contract: this a contract that would otherwise be enforceable but for a situation external to the contract such as the Statue of Frauds.
When a suit is brought by one party to enforce the contract, the courts must first decide whether a contract was in fact created.  In order for a contract to be created the court will ask the following questions:
  1. Was there mutual assent?  This is meant to mean that there was a "meeting of the minds" or a "bargained for exchange".  This is usually proven by evidence that at some point one party made an offer and the other party accepted the offer.
  2. Was there consideration or some substitute for consideration?  In order for there to be consideration there must be (a) a bargained for exchange and (b) of legal value.  This means that there must be a legal benefit to the promisor or a legal detriment to the promise.  This means that gifts are excluded from the laws pertaining to contracts. 
  3. Are there any defenses to the creation of the contract?  The last question to be answered by the courts is whether or not the contract is not invalidated by a defense.  Defenses can be the absence of mutual assent due to a mutual mistake (where both parties are wrong about the subject matter of the contract).  Valid defenses to contract also include ambiguous language in the contract, misrepresentation of the contract or terms of the contract (which include fraud, concealment or non-disclosure), illegal contracts (such as those that are against the law--like a contract to commit a crime), contract with a minor (where minors are not allowed to contract for certain items or services). 
Note on #1: Note, that in order for there to be a valid offer there must be a promise, undertaking or commitment in clear and definite terms, conveyed (or communicated) to the other party.  Also note that an offer can be revoked prior to acceptance, unless the offer is an option contract.  Generally an offer is effective when received.  Offers can be rejected either expressly or by lapse of time. 

Note on #2: Note that in situations where there is no consideration, a contract may still be construed by the courts.  Promisorry Estoppel is a doctrine that makes legal agreements via the courts to prevent injustice.  A promise is enforceable to prevent injustice if (1) the promisor should reasonable expect to induce action or forbearance; AND (2) such action or forbearance is in fact induced. 

Note on #3: Note that contracts can also be void where the parties contracting do not have the capacity of contracting whether because of their age, the fact that they are intoxicated or incapacitated or under duress or undue influence.  Some contracts may fall under the Statue of Frauds which means that the contract must be in writing.  This is the case for real estate contracts, contract over a 1 year period, contract for goods over the sale of $500 and promises to pay the debt of another (suretyship promises) ...among others.

Hope this was helpful, feel free to comment below,

-Nick Coriano

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About the Author: Nicholas Coriano is a Business Consultant.  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 is currently a partner at Cervitude Intelligent Relations, which specializes in Investor Relations for companies valued under $1 Billion USD.

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 for micro cap companies and penny stocks.  If there is a particular topic you would like to see covered on The Blog, email us. If you would like to advertise on The Blog, click here. 

Saturday, February 11, 2017

10 Rules For Investing Success From Warren Buffett The Investment Guru

We have mentioned several times here on the MicroCapCompany.com blog that your investing skills and practices as an entrepreneur or business person should follow some mentor.  And when looking for a mentor in investing, there is no one better than Warren Buffet.  Here are 10 rules that were put together by Evan Carmichael about investing by Warren Buffet.  Enjoy!




-Nick Coriano

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About the Author: Nicholas Coriano is a Business Consultant.  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 is currently a partner at Cervitude Intelligent Relations, which specializes in Investor Relations for companies valued under $1 Billion USD.

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 for micro cap companies and penny stocks.  If there is a particular topic you would like to see covered on The Blog, email us. If you would like to advertise on The Blog, click here.