Financing Structure - In the world of finance there are a relatively small number of financial structures that investors can use when funding a company, but there are an infinite number of variations. The basic financing structures are debt and equity. The various debt structures include secured and unsecured debt and can involve personal or corporate guarantees, promissory notes and equipment or real estate based lending.
The basic equity structures include common stock, convertible preferred stock, Warrants, debentures convertible into common stock and equity lines. With a pure equity based structure there is no worry about making principal and interest payments like there is in a pure debt financing, however, now management is giving up a piece of its company in exchange for the privilege of not having to make payments.
Additional variations may include a combination of debt and
equity, Warrants, right of redemption, clawbacks, most favored nations clauses,
lock-ups, right of first refusals, and many, many more combinations of
structures. A term sheet for funding from a private equity firm or hedge fund
is usually several pages long, while final documentation usually runs anywhere
from 25 to 100 pages depending on the amount of funding and complexity of the
deal.
Management of Reverse
Merger Funding has dealt with many different structures and numerous
variations over the years. If your existing Company is looking for funding
please Submit A
Funding Request. We can help middle management in structuring and
funding the purchase of a company and obtain a public listing. Also, if
your company is looking for growth capital for expansion, acquisition funding
to acquire a competitor, or funding to pay down debt and increase its net
income we can help.
We especially like business located in the Tri-State area (
