03.27.2014 Raising Capital webcast

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Information about 03.27.2014 Raising Capital webcast

Published on March 27, 2014

Author: ExpertWebcast

Source: slideshare.net

Moderator: Alexander B. Kasdan, Managing Director, DelMorgan & Co. Expert Panel: Neil Morganbesser, Co-Founder, President & CEO, DelMorgan & Co. Leib Orlanski, Partner, K&L Gates LLP Ronald S. Friedman, CPA, Partner, Marcum LLP Organizer: Anna Spektor, President and Founder, Expert Presence RAISING CAPITAL FOR COMPANIES: WHAT ENTREPRENEURS AND THEIR ADVISERS NEED TO KNOW

2 ORGANIZER & HOST: Anna Spektor, Founder, Expert Presence / Expert Webcast Anna is organizer and host of Expert Webcast leading thought leadership platform delivering knowledge and insight on current issues and the latest developments in law, accounting and finance. Expert Webcast produces the industry’s leading webcast panels covering corporate, M&A, restructuring and finance topics. Our speakers address most pressing issues for business owners, C-level executives, corporate advisers and institutional investors locally, internationally and cross-border. Anna is also a seasoned business development consultant and founder of Expert Presence, a leading management consultancy dedicated to helping professionals generate new business and increase brand awareness. Founded upon creativity, accountability and delivering results, Expert Presence specializes in new business development, corporate communications, strategic positioning, event and digital marketing for law firms, accounting firms, investment banks and other professional services firms. 100 Wilshire Blvd. Suite 750 Santa Monica, CA 90401 (310) 995-6579 anna@expertpresence.com www.expertpresence.com www.expertwebcast.com

3 Moderator: Alexander B. Kasdan is a Managing Director at DelMorgan & Co. Mr. Kasdan has more than twenty years of investment banking, real estate, corporate law and corporate strategy experience. Mr. Kasdan has executed over 100 domestic and cross-border transactions totaling more than $10 billion in overall volume in a variety of industries. Prior to joining DelMorgan, Mr. Kasdan founded Convergence Capital Partners, LLC, a boutique investment banking advisory and real estate investment firm and was an investment banker at Barrington Associates, Peter J. Solomon Company, Credit Suisse First Boston and Merrill Lynch. Mr. Kasdan practiced law with O’Melveny & Myers LLP (formerly O’Sullivan Graev & Karabell LLP) and Paul, Hastings, Janofsky & Walker LLP (formerly Battle Fowler LLP), where he specialized in mergers and acquisitions, private equity and corporate finance transactions. In addition, Mr. Kasdan served as Corporate Counsel in charge of business development at Schlumberger Ltd., a global oilfield and information services company. Mr. Kasdan graduated magna cum laude from Middlebury College with a B.A. degree in Economics and Italian and was elected to Phi Beta Kappa during his junior year. In addition, he holds a J.D. degree from Columbia University Law School and has studied at the University of Florence in Italy. Mr. Kasdan is admitted to the Bar in the State of New York. Mr. Kasdan is a Senior Advisor to Governance and Transactions LLC, an advisory firm established in 2003 by Mr. James L. Gunderson, former Secretary and General Counsel of Schlumberger Limited, to assist boards, management and owners with corporate governance, compliance, structuring and strategic transactions. 100 Wilshire Blvd. Suite 750 Santa Monica, CA 90401 P: (310) 935-3826 M: (310) 980-1718 www.delmorganco.com ak@delmorganco.com

4 Panelist: Neil Morganbesser is co-Founder and President & CEO of DelMorgan & Co. where he provides senior leadership within the firm and helps oversee all client engagements. Mr. Morganbesser is also CEO of Globalist Capital LLC, DelMorgan’s broker-dealer affiliate. Mr. Morganbesser has over 20 years of experience providing financial and strategic advice to a full range of clients, including entrepreneurs, large corporations, governments, family businesses, private equity funds, and special committees of public companies. Mr. Morganbesser has been affiliated with some of the leading institutions in the world, and his experience ranges from representing the offshore owners in the sale of a small, private U.S. company for $10 million to representing the special committee of a large, public company in a $9 billion negotiated management buyout with a highly complex financial structure. Mr. Morganbesser has truly global experience with the most sophisticated transactions, across a broad range of industries and in a large number of jurisdictions, as the lead banker on a wide variety of transactional and other advisory assignments, including domestic and cross-border mergers, acquisitions, joint ventures, sales and divestitures, restructurings, special committee assignments, unsolicited acquisitions and hostile defense. With transactional experience in over 30 countries, Mr. Morganbesser has successfully advised on over 75 transactions. Until May 2008, Mr. Morganbesser was the head of West Coast and Asia Mergers & Acquisitions at Bear Stearns & Co., as a Senior Managing Director based in Los Angeles. Prior to joining Bear Stearns in May 2001, Mr. Morganbesser was an investment banker in the Mergers, Acquisitions and Restructuring Department at Morgan Stanley (in New York from 1993-1998 and in Los Angeles from 1998-2001). From 1990-1993, Mr. Morganbesser was a corporate and M&A attorney at the preeminent New York law firm of Wachtell, Lipton, Rosen & Katz. Mr. Morganbesser graduated with an A.B. magna cum laude in Applied Mathematics / Economics from Harvard University (Phi Beta Kappa) in 1986 and received his J.D. and M.B.A. degrees (Order of the Coif, with honors) from Stanford University in 1990. 100 Wilshire Blvd. Suite 750 Santa Monica, CA 90401 (310) 319-2000 nm@delmorganco.com www.delmorganco.com

5 Panelist: Leib Orlanski is a Partner at K&L Gates. Mr. Orlanski helps companies and management teams find acquisition targets to buy, brings in private equity firms to finance buy-outs or growth capital, and structures and documents the terms of the M&A and investment transactions that he originates. He also represents companies seeking to find underwriters for an IPO or a follow on public offering or a PIPE financing, structures the terms of the public offering or the private placement, and represents either the issuer or the underwriter in public stock offerings. He was named a Southern California "Super Lawyer" by Los Angeles Magazine in 2006, 2007 and 2008. Mr. Orlanski represents issuers and underwriters in their public stock offerings. He has been a member of the State Bar Corporation Committee; a Lecturer, California Continuing Education of the Bar; Los Angeles County Bar Association Annual Update on Developments in Securities Law; he has been a member of the Corporation Commissioner's Blue Ribbon Adversary Committee, and a Lecturer and Chairman for the University of California, Los Angeles Extension Courses on “Going Public,” and “Off-Balance-Sheet Financing.” Mr. Orlanski holds a J.D. from University of Southern California Law School, 1967, (Order of the Coif; Editor, Southern California Law Review) and a B.A. from University of California at Los Angeles (UCLA), 1964. ca Blvd.7th FloorLos Angeles, CA 90067310-552-5044 tes.comwww.klgates.com

6 Panelist: Ronald S. Friedman is a Partner in the Southern California region of Marcum LLP. As a member of the Firm’s National Retail/Consumer Products Industry group, he provides consulting services for closely-held and emerging businesses in the apparel, manufacturing, distribution and retail industries. Mr. Friedman works very closely with his clients providing assistance with many aspects of their businesses. His services include forecasting and budgeting, profit enhancement, succession planning, exit strategies, preparation for sale of a business, assistance in procuring financing, and workout and reorganization consulting. Mr. Friedman’s expertise also includes assisting in the negotiations for the purchase or sale of a business. Additionally, for more than 30 years Mr. Friedman has served as an expert witness in numerous apparel industry cases ranging from valuations in divorce proceedings to disputes between partners in business dealings. ngeles, CA 90067P: (310) 432-7414C: (310) 629-0827Ron.Friedman@marcumllp.com

7 WEBCAST LOGISTICS: The audience is in listen-only mode Attendees are encouraged to type questions into the “chat” field Questions will be addressed at the end of the program Power Point link is available at www.expertwebcast.com MCLE / CPE processing link is available at www.expertwebcast.com For technical support, please contact GoToMeeting support: 800 263 6317

8 MAJOR TOPICS •Market overview •What investors look for: industry, business model, scalability, etc. •Assessing capital requirements •Short-term v. long-term business strategy •Uses of capital •Legal and financial reporting requirements •Disclosure and due diligence •Valuation parameters •Debt v. equity •Deal structure •Maintaining control •Types of investors: financial v. strategic •Retaining investment banker, lawyers and accountants •Overview of the process •Potential landmines and war stories

9 Leib Orlanski, Partner, K&L Gates (This discussion does not cover debt or raising money from wealthy individuals) I.RAISING PRIVATE CAPITAL FOR COMPANIES 1.High Tech and Social Media Companies Stages Sources a.Seed Stage Friends / Family b.Early Stage Pre-Revenue Proof of Concept Venture Capital c.Late Stage, Generating Revenue, No Profits Venture Capital d.Pre-IPO, Generating Significant Revenue, Some Profits Venture Capital Approach above via trusted intermediary: DelMorgan & Co.

10 I.RAISING PRIVATE CAPITAL FOR COMPANIES (cont.) 2.Conventional Non Tech Non Social Media Companies Stages Sources a.All Stages Up to $10M Revenue and $1.5M EBITDA Friends / Family b.From $10M-$20M Revenue and $1.5M - $4M EBITDA Smaller Private Equity Firms / Some Family Offices c.From $20M-$100M Revenue and $4M-$20M EBITDA Mid-Market PE Firms / Many Family Offices d.Over $100M Revenue and Over $20M EBITDA Large Pool of Big Multi Billion Dollar PE Funds Approach above via trusted intermediary: DelMorgan & Co.

11 II. RAISING PUBLIC CAPITAL FOR COMPANIES 1. Raising Public Capital for Private Companies Via IPO Stage Type of Company Sources a. Tech or Social Media, Health Sciences, MedTech Smaller / Regional Experiencing Fast Growth Up to $50mm Investment Bankers – Revenue but Not Yet Profitable Examples: Roth Capital, H.C. Wainright, Maxim b. Non Tech Non Social Media Same Plus – Examples: Experienced Management Cowen, Jeffries, Baird, Fast Growth Rate - CAGR-20% Oppenheimer, William Revenues at Least $30M-$100M Blair, AEGIS, Needham c. Any Company, Revenues Over $100mm Goldman, Morgan Stanley CAGR 20%, After Tax Profit 10% Bulge Bracket Best to use intermediary DelMorgan & Co. for intro

12 II. RAISING PUBLIC CAPITAL FOR COMPANIES (cont.) 2. Raising Public Capital for Private Companies Via Reverse Merger a. Very few cash heavy shells available b. Merging with shell without cash not advisable c. Best way to reverse merger with shell is to use investment banker like DelMorgan to raise capital from small hedge funds simultaneously with consummation of the merger

13 II. RAISING PUBLIC CAPITAL FOR COMPANIES (cont.) 3. Raising Public Capital for Public Companies Criteria Sources a. Stock Price of at Least $1.50 Roth Capital b. Volume in Stock at Least 100,000 Shares per Day Wainright c. Good Projects for Dramatic Improvements in Current Fiscal Year Maxim d. For Shelf Takedown Market Cap at Least $75mm 4. Raising Private Capital for Public Companies; PIPE Criteria Sources Same as (a), (b), (c) above Same Differences in PIPE Stock Sold at a Larger Discount to Public Trading Price

14 ACCOUNTING CONSIDERATIONS Ronald S. Friedman, CPA, Partner, Marcum LLP •Annual Audited Financial Statements •Internal Monthly Financial Reporting •Detailed Projected Financial Statements for three years, including income statements, balance sheets, cash flows, operating expenses and assumptions •Strength of the company’s internal controls •Strength of the accounting personnel and supporting team members •Quality of Earnings Report, different than financial statements Tax Strategy: •Capital financing / Asset Purchase vs. Debt Financing •Capital financing, step up in basis of assets •Valuation Experts to allocate purchase price for tax and GAAP

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