Staying Private
A company can stay private and attempt to acquire capital through private placement memorandums (PPMs), venture capitalists, angel groups, or loans.
PPMs have been difficult to obtain lately, as the requirements for being an accredited investor have increased, and non-accredited investors cannot, for the most part, participate. PPMs are time consuming in their creation. A company that is trying to access capital through a PPM cannot by law advertise that the PPM is available. It is strictly through a business owner’s warm leads (friends, family, and business associates) that a PPM can be offered.
Venture capitalists and angel groups will often invest in ideas and businesses that they believe in. However, extensive business plans and PowerPoint presentations are often requested in order to get an audience with them. Once business owners find a venture capitalist or angel who is willing to invest, agreements of ownership and interest rates must be made. Often, these investors request a significant amount of the company to participate and/or a significant amount on interest. However, business owners who feel desperate and who believe that this is the only way to obtain the capital they need often take this route.
Many banks today are not investing in businesses that do not have the collateral to secure the loan. Business owners that do not have assets to cover the amount of capital that they need cannot, in most cases, get a loan. If you are a business owner that has sufficient assets to use as collateral to secure a loan, and you need to raise capital, this is a viable option.
Going Public
A company can pay hundreds of thousands, if not millions of dollars to have the privilege of participating in the traditional stock market arena. The Securities and Exchange Commision requires extensive state and federal filings and reports for publicly held companies. Often, the waves of trading (whether high and then low, or low and then high and then low again) in traditional markets have not reflected the comparative state of the companies being traded.
These factors and others, such as the risk of losing control over the direction and orchestration of the now public company has made private business owners hesitant to take part in the traditional public markets. In fact, out of more than two million companies who could qualify to post with NYSE or NASDAQ, less than ten thousand companies are actively being traded.
Being Independent
The Independent Stock Market provides a marketplace for business owners to offer their personal stock for sale. Owners no longer need to look at PPMs as options, as ISM allows the advertising and the use of accredited and non-accredited investors to participate. Owners no longer need to seek out venture capitalists, angel investors or banks for loans to find capital, since with ISM they can access the capital they need without giving up a significant portion of their company, without paying interest, and without having assets to use as collateral.
The Independent Stock Market provides a venue for private business owners wanting the benefits of the traditional markets without many of the risks and additional reporting they require. Owners can find the capital they need and receive the liquidity they want in a marketplace that provides a simple buy/sell model without the twists and turns of outside influences.
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