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Great Hill Partners Makes All Cash Offer to Acquire VersaPay Corporation

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Great Hill Partners Makes All Cash Offer to Acquire VersaPay Corporation

TORONTO, Dec. 13, 2019 /PRNewswire/ – VersaPay Corporation (TSXV: VPY) (“VersaPay” or the “Company”) and Great Hill Partners (“Great Hill”), a leading growth-oriented private equity firm, are pleased to announce that the Company and an affiliate of Great Hill have entered into a definitive arrangement agreement (the “Arrangement Agreement”) whereby Great Hill will indirectly acquire all of the issued and outstanding common shares of the Company (“VersaPay Shares”) by way of a statutory plan of arrangement under the Canada Business Corporations Act (the “Transaction”).

Under the terms of the Arrangement Agreement, each VersaPay shareholder (the “VersaPay Shareholders”) will receive cash consideration of C$2.70 for each VersaPay Share held (the “Consideration”), valuing VersaPay’s total equity at approximately C$126 million on a fully diluted basis. The Consideration represents a 47.5% premium to the closing price of the VersaPay Shares on the TSX Venture Exchange (the “TSXV”) on December 12, 2019 and a 64.5% premium to the volume weighted average price (“VWAP”) of the VersaPay Shares over the last 30 trading days.

Benefits to VersaPay Shareholders

  • Immediate and significant premium of approximately 47.5% to the closing price of the VersaPay Shares on December 12, 2019, and approximately 64.5% based on the 30-day VWAP.

  • All cash offer that is not subject to a financing condition.

“We are very pleased to be able to recommend this transaction to our shareholders, employees and customers,” commented Art Mesher, Chairman of the Company, “With their deep knowledge of our industry and focus on supporting growth companies, Great Hill is uniquely positioned to understand our business and its long term potential, and help the Company to achieve that potential”.

“Great Hill is excited to partner with the VersaPay team and provide the capital to execute on their growth strategies” stated Matt Vettel, Managing Partner at Great Hill Partners. Craig O’Neill, CEO of the Company added, “I’d like to thank our employees who have worked so hard to achieve the growth and success we’ve experienced to date, our customers who have put their trust in us, and our shareholders who have supported us as a public company.  We’re equally excited about our future working alongside Great Hill.”

Independent Committee and Board of Directors Recommendations

An independent committee of VersaPay’s Board of Directors (the “Committee”) comprised of Arthur Mesher, Sheldon Pollack and David Dobson was constituted to consider the Transaction.  Capital Canada Limited has provided a fairness opinion to the Committee (the “Fairness Opinion”) stating that in its opinion, and based upon and subject to the assumptions, limitations and qualifications set forth therein, the Consideration to be received by the VersaPay Shareholders pursuant to the Transaction is fair, from a financial point of view, to the VersaPay Shareholders.

The Board of Directors, after receiving financial and legal advice, and following receipt of the Fairness Opinion and the unanimous recommendation of the Committee, has unanimously determined that the Transaction is in the best interests of VersaPay and is unanimously recommending that VersaPay Shareholders vote in favour of the Transaction.

In addition, directors and senior officers of VersaPay, who as of the date hereof collectively hold approximately 3.7% of the VersaPay Shares, have entered into agreements to support the Transaction and vote their VersaPay Shares in favour of the Transaction.

Transaction Conditions and Timing

The Transaction will be implemented by way of a statutory plan of arrangement under the Canada Business Corporations Act and will require the approval of 66 2/3% of the votes cast by VersaPay Shareholders at a special meeting of VersaPay shareholders to be called to approve the Transaction (the “Special Meeting“).

The completion of the Transaction will also be subject to obtaining required court and other approvals and satisfaction of closing conditions customary for a transaction of this nature.  The Arrangement Agreement includes customary deal-protection provisions.  VersaPay is subject to non-solicitation provisions and in certain circumstances, the Board of Directors may terminate the Arrangement Agreement in favour of an unsolicited superior proposal, subject to the payment of a termination fee of C$5.67 million and subject to a right of Great Hill to match such superior proposal.  The Arrangement Agreement also provides for payment by Great Hill of a reverse termination fee of C$7.56 million if the Arrangement Agreement is terminated in certain specified circumstances, including if Great Hill does not satisfy its obligation to provide sufficient funds to complete the Transaction.

It is anticipated that the Special Meeting will be held in February 2020. Following closing of the Transaction, the VersaPay Shares would be delisted from the TSXV. The Transaction is expected to close in the first quarter of 2020.

Advisors and Counsel

INFOR Financial Inc. is acting as exclusive financial advisor to VersaPay in connection with the Transaction. Capital Canada Limited provided the Fairness Opinion in connection with the Transaction. Cassels Brock & Blackwell LLP is acting as Canadian counsel to VersaPay and Arnold & Porter Kaye Scholer LLP is acting as U.S. counsel to VersaPay.

Blake, Cassels & Graydon LLP is acting as Canadian counsel to Great Hill and Alston & Bird LLP is acting as U.S. counsel to Great Hill.

Additional Information about the Proposed Transaction

A copy of the written Fairness Opinion, and a description of the various factors considered by the Board of Directors of the Company in its determination to approve the Transaction, as well as other relevant background information, will be included in the management information circular to be sent to the Company’s shareholders in advance of the Special Meeting. The management information circular, the Arrangement Agreement, including the plan of arrangement, and certain related documents will be filed with the Canadian securities regulators and will be available on SEDAR at www.sedar.com.

About Great Hill

Great Hill Partners is a Boston-based private equity firm targeting investments of $25 million to $500 million in high-growth companies across the consumer, digital infrastructure, financial technology, healthcare, and software sectors. Over the past two decades, Great Hill has raised nearly $8 billion of commitments and invested in more than 75 companies, establishing an extensive track record of building long-term partnerships with entrepreneurs and providing flexible resources to help middle-market companies scale. For more information, visit www.greathillpartners.com

About VersaPay Corporation

VersaPay is a Fintech company and leading provider of cloud-based invoice-to-cash solutions, enabling businesses to provide a superior customer experience, get paid faster, streamline financial operations, and dramatically reduce DSO and costs. VersaPay ARC is the first platform to provide Customer-Centric AR™ with a customer self-service environment to view invoices online, collaborate on inquiries and disputes, and facilitate secure online payments (EFT/ACH and credit card). Businesses gain access to a suite of powerful tools that enable efficient collections, cash application and real-time insight into accounts receivable. VersaPay ARC automatically reconciles payments and account information through integrations with a wide range of ERPs and accounting software providers.

More information about VersaPay is available at www.versapay.com or under the Company’s profile on SEDAR at www.sedar.com.

FORWARD LOOKING INFORMATION

This press release contains “forward-looking information” which may include, but is not limited to, statements with respect to the  anticipated meeting date, timing for completion of the Transaction and delisting from the TSXV.

Generally, forward-looking information can be identified by the use of terminology such as “anticipates”, “believes”, “expects”, “plans”, “intends”, “estimates”, “schedules”, “forecasts”, “budgets”, “proposes”, or variations or comparable language of such words and phrases or statements that certain actions, events or results “may”, “could”, “would”, “should”, “might” or “will”, “occur” or “be achieved” or the negative connotation thereof.

Forward-looking information is based upon certain assumptions and other important factors that, if untrue or incorrect, could cause the actual results, performance or achievements of the Company to be materially different from future results, performance or achievements expressed or implied by such information. Such information is based on numerous assumptions regarding present and future business strategies and the environment in which the Company will operate in the future, including: the Company’s plans with respect to its products and services, including timing, content and pricing; market and industry expectations; a continuing increase in the number of customer relationships; the length of the sales cycles; the competitive environment; the ability to maintain or accurately forecast revenue from the Company’s products or services; the ability of the Company to identify, hire, train, motivate and retain qualified personnel; the ability of the Company to develop, introduce and implement new products as well as enhancements or improvements for existing products that respond, in a timely fashion, to customer/product requirements and rapid technological change; general economic, business and political conditions; stock market volatility; anticipated costs and ability to achieve goals; the impact of any changes in the laws and regulations in the jurisdictions in which the Company operates; and the effect of new accounting pronouncements or guidance. Although the Company believes its expectations are based upon reasonable assumptions and has attempted to identify important factors based on its current expectations, estimates and projections that could cause actual actions, events or results to differ materially from those described in forward-looking information, these are subject to a number of significant risks and uncertainties and there may be other factors that could cause actions, events or results not to be as anticipated, estimated or intended.

Forward-looking information is subject to known and unknown risks, uncertainties and other important factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking information, including but not limited to risks related to: taxes, reliance on third-party service providers, potential failures of VersaPay and third-party systems, failure to develop or market new products or services, intellectual property, third-party claims for intellectual property infringement, privacy breach by service providers, merchant fraud, security breaches, service interruptions by cyber-terrorists or fraudulent or illegal use of services, competition, additional financing, variable revenues/earnings, dependence on key personnel, merchant attrition, loss of sales partners, increases in interchange rates, non-sufficient funds, market demand for products and services, changes in consumer spending, operating risk and insurance, conflicts of interest, stock price volatility, government regulations, litigation, general economic conditions, foreign exchange, liquidity, interest rates, internal controls and acquisitions strategy, as more particularly described in the section entitled “Risk Factors” in the Company’s Annual Information Form for the year ended December 31, 2018 dated April 2, 2019. The foregoing list is not exhaustive and other risks are detailed from time to time in other continuous disclosure filings of the Company. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking information prove incorrect, actual results may vary materially from those described herein as anticipated, believed, estimated or expected. Accordingly, readers should not place undue reliance on forward-looking information.

Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking information, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. Forward-looking information contained herein are made as of the date of this press release and the Company disclaims any obligation to update any forward-looking information, whether as a result of new information, future events or results, except as may be required by applicable securities laws. There can be no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on forward-looking information.

SOURCE VersaPay Corporation

Related Links

www.versapay.com

Weatherford Successfully Completes Financial Restructuring

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Weatherford Successfully Completes Financial Restructuring

Emerges from Chapter 11 and Appoints New Board of Directors

HOUSTON, Dec. 13, 2019 /PRNewswire/ — Weatherford International plc today announced that it has completed its financial restructuring and emerged from chapter 11 protection.

The Company emerges with a stronger financial foundation having reduced approximately $6.2 billion of outstanding funded debt, secured $2.6 billion in exit financing facilities, including a $450 million revolving credit facility, secured a $195 million letter of credit facility, and secured over $900 million of liquidity.

“This is a notable day for Weatherford as we have emerged as a stronger, more focused organization,” said Mark A. McCollum, President and Chief Executive Officer of Weatherford. “With renewed balance sheet strength, a strong customer base and a portfolio designed to meet the needs of our industry, we believe we are well-positioned to build on our reputation as a leader in the oilfield services sector and to capitalize on the growth opportunities ahead. I want to thank our dedicated employees, customers and suppliers, who continued to believe in Weatherford and worked with us to achieve this successful balance sheet recapitalization.”

Weatherford expects its newly issued ordinary shares will initially resume trading on the OTC Markets with the Company ultimately planning to transition trading to the New York Stock Exchange, subject to the receipt of applicable approvals. The transition to the New York Stock Exchange is expected to occur after the Company reports results for its fourth quarter ending December 31, 2019, holds an investor call, and completes the fresh-start accounting process, which are expected to be completed by early March (details to follow).

New Board of Directors
A new Board of Directors was appointed upon the Company’s emergence, providing critical expertise and experience to Weatherford as it enters the next phase of growth and innovation. The new Board of Directors consists of seven members, including Chairman of the Board Thomas R. Bates, Jr., John F. Glick, Neal P. Goldman, Gordon T. Hall, Mark A. McCollum, Jacqueline Mutschler, and Charles M. Sledge.  Regarding the new Board, Mr. McCollum continued: “The knowledge and engagement of our new Board of Directors will better enable us to deliver on the opportunities in front of us and remain focused on achieving objectives that are in the best interest of all the Company’s stakeholders.”

Weatherford was represented in the recapitalization by Latham & Watkins LLP, Matheson, Hunton Andrews Kurth LLP, Lazard Freres & Co. LLC, Alvarez & Marsal and Conyers Dill & Pearman.

Forward-Looking Statements
Certain statements in this press release are forward-looking statements. In addition, our management may from time to time make oral forward-looking statements. All statements, other than statements of historical facts, are forward-looking statements. Forward-looking statements may be identified by the words “believe,” “expect,” “anticipate,” “project,” “plan,” “estimate,” “may,” “will,” “could,” “should,” “seek” or “intend” and similar expressions. Forward-looking statements reflect our current expectations and assumptions regarding our business, the economy and other future events and conditions and are based on currently available financial, economic and competitive data and our current business plans. Actual results could vary materially depending on risks and uncertainties that may affect our operations, markets, services, prices and other factors as discussed in the Risk Factors section of our filings with the Securities and Exchange Commission (the “SEC”). While we believe our assumptions are reasonable, we caution you against relying on any forward-looking statements as it is very difficult to predict the impact of known factors, and it is impossible for us to anticipate all factors that could affect our actual results. Important factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, management’s expectations of plans, strategies, objectives, growth and anticipated financial and operational performance; financial prospects; anticipated sources and uses of capital and other matters that are not historical facts. For a more detailed discussion of these and other risk factors, see the Risk Factors section in our most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q and our other filings made with the SEC. All forward-looking statements are expressly qualified in their entirety by this cautionary notice. The forward-looking statements made by us speak only as of the date on which they are made. Factors or events that could cause our actual results to differ may emerge from time to time. We undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law.

About Weatherford
Weatherford is one of the largest multinational oilfield service companies providing innovative solutions, technology and services to the oil and gas industry. The Company operates in more than 80 countries and has a network of 620 locations, including manufacturing, service, research and development, and training facilities and employs more than 24,000 people. For more information, visit www.weatherford.com and connect with Weatherford on LinkedIn, Facebook, Twitter and YouTube.

Contacts:       

Stuart Fraser
+1.713.836.4208
Interim Chief Financial Officer

Karen David-Green 
+1.713.836.7430
Senior Vice President Stakeholder Engagement and Chief Marketing Officer

SOURCE Weatherford International plc

Related Links

http://www.weatherford.com

Warning Issued For Millions Of Google Chrome Users

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warning chrome users

Warning Issued For Millions Of Google Chrome Users

Google’s seamless Chrome updates are one of its most appealing features thanks (unlike Windows 10) to their reliability. Until now. The latest version of Chrome has already automatically rolled out to hundreds of millions of users around the world is causing some serious problems for Android users.

Picked up by 9to5Google and expanded upon by Android Police, Chrome 79 has been found to delete data from Android apps which access Chrome via Android’s built-in WebView. As 9to5Google notes, users and developers are furious and Chromium’s bug tracker lists comments describing it as a “catastrophe” and “major issue.”

The problem stems from Chrome 79 switching the location it stores web data and a failed migration process has caused this data to be lost. Google has confirmed the issue and paused the rollout, but acknowledges Chrome 79 has already reached approximately 50% of devices (there are 2.5 billion Android users worldwide).

One Chromium engineer revealed “We are currently discussing the correct strategy for resolving this issue,” and said the company is working on a pair of strategies:

a) continue the migration, moving the missed files into their new locations.

b) revert the change by moving migrated files to their old locations.

“We will let you know which of these two options have been chosen soon,” the engineer continued and also asked for users to “collect a list of affected packages” which suggests there is still some way to go in identifying and fixing all the impacted apps. At this time, there is still no official list of the affected apps.

“I understand that losing data puts you in very difficult positions,” admitted another Chromium engineer. “This issue is marked P0 [highest priority] so, at this point, we don’t need more reminders about how important this is for you 🙂 Please understand that the team is working on a solution that minimizes the data loss, and that can be rolled out safely… After we deploy the best mitigation that we can, we’ll figure out how to do better in the future. Thank you for bearing with us!”

If you’re already running Chrome 79 (check your Chrome install version in the Play Store) there’s little you can do other than sit and wait. With no official list of impacted apps and serious risks of data loss accessing those that are, there’s no obvious way to protect yourself and the data of affected apps.

Hang in there.

Here’s what JP Morgan thinks are among the top trades for next year

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Forget about a 2020 recession.

JPMorgan Chase & Co. JPM, -0.88%  picked equities, U.S. agriculture and hedges against next year’s U.S. presidential election as three of its longer list of top trade picks to kick off the new decade.

Analysts at the nation’s largest bank by assets see the Federal Reserve’s recent “mid-cycle” adjustment, or series of three rate cuts this year, as going a long way to reverse last year’s hikes that nearly pulled the country into a slump.

“Our risk-on stance is supported by the improvement in growth indicators over the past couple of months,” wrote a team of analysts led by Nikolaos Panigirtzoglou.

“In particular, we believe that the bottoming out of global manufacturing PMIs and the strength of U.S. labor markets are lowering U.S. recession risks and are boosting confidence to the mid-cycle adjustment thesis,” they wrote.

That thesis assumes stocks will follow the path of the 1995-1996 “mid-cycle” Fed rate adjustment and produce “5% or so upside for equities over the next six months.”

Here is their chart showing the S&P 500 index SPX, +0.01% bounce after the 1995 rate cut.

JPMorgan data

Like in the 1996 rally, a lift to stocks in the coming year still will need help from spending consumers and resilience in the U.S. job market, which in November saw the unemployment rate match a 50-year low of 3.5%, as well as a bounce in the manufacturing sector, JP Morgan analysts said.

But JP Morgan also see the stars aligning for a powerful “Great Rotation II” into stocks from bonds in 2020, after investors pulled some $203 billion out of global equity funds this year and plunged some $789 billion into bond funds.

Their forecast already baked in a de-escalation of the protracted trade dispute between Washington and Beijing, in no small part due to the looming 2020 presidential race.

Trade optimism got a bounce Thursday following reports that an interim U.S.-China “phase-one” trade deal had been reached in principle. The Wall Street Journal, citing a presidential adviser, said the preliminary deal calls for China to buy $50 billion worth of agricultural goods in 2020, along with energy and other goods. In exchange the U.S. would reduce the tariff rate on many Chinese imports, which now ranges from 15% to 25%.

President Donald Trump tweeted Thursday that a “big deal” with China was “very close,” which helped propel the S&P 500, Dow Jones Industrial Average DJIA, +0.01%  and Nasdaq Composite Index COMP, +0.20%  to record closes.

All that could bode well another JP Morgan top pick: staying long agricultural commodities via an index that provides broad exposure and diversification away from any idiosyncratic moves in agricultural markets.

U.S. farmers have been reeling from the loss of China as a key buyer of agricultural goods as a result of the two-year trade war. But the phase-one element of any pact is expected to ease some of their pain.

“This would be a materially bullish development for the agricultural complex, which is not priced, and if agreed by heads of state will drive our price forecasts into the bullish scenario,” JP Morgan analysts wrote.

The UBS ETRACS CMCI Food Total Return ETN UAG, +0.89% which tracks a popular an index of 10 agricultural commodities, lost 2.72% on the year to date as of Thursday at $15.72 per share.

Shares of iPath Series B Bloomberg Agricultural Subindex Total Return ETN JJA, -0.11%  were down 1.5% for the same period at $44.18.

The biggest risk of 2020?

It’s the U.S. presidential election, according to JPMorgan analysts who recommend adding hedges by going long on baskets of assets that could benefit if a progressive Democrat like Sen. Elizabeth Warren is elected.

Barclays analysts put a chart together in November listing eight different areas, from taxes to Big Tech, that could be impacted if Warren won the White House.

Earlier this month, analysts at Jefferies pointed out that the Health Care Selector SPDR ETF XLV, -0.07%  could help predict a Warren win, according to this CNBC report.

What The Charts Say About Bitcoin

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bitcoin prices

For now, Bitcoin is just another trading toy

Ah, Bitcoin. The stuff of dreams. The new frontier in currency and commerce. The gateway to a world dominated by blockchain technology, with newly-minted zillionaires lining of streets of urban and rural sites across the globe. Or, the speculative arm of a legitimate evolution of financial transactions.

Now, before you get all defensive about how amazing Bitcoin is, and tell me how out of touch I am (after all, at age 55, I am way too old to understand this stuff, right?), hear me out. I do see the role of blockchain technology in the global economy going forward.

However, I think of Bitcoin, the most famous of cryptocurrencies, like “Band-Aids” are to adhesive bandages (hint: same thing, but one is a brand name, the other is just what the product is). Bitcoin is the proverbial poster-child for this new way to hold money. That is all fine with me. My point, though: just don’t pretend it is a substitute for traditional hard currencies. Not yet, anyway.

Bitcoin: what it is and what it isn’t

My evidence for that statement: the price of Bitcoin is not at all stable. Its price is more volatile than most stocks. You wouldn’t take the money you need to pay this month’s mortgage or buy food for your family’s dinners this week, and put it in an S&P 500 Index Fund, would you? Actually, I am afraid of the answer from too many investors. But I digress. The point is that Bitcoin still appears to be a trading tool (toy?), rather than a “store of value,” which is the textbook definition of a stable asset.

For that reason, I refuse to look at Bitcoin as a currency when following its price movement. However, as a vehicle to trade to make profit on over periods of time, I see it the way I see stocks and ETFs: as something to chart, and to evaluate its reward/risk trade-off at any point in time.

And, while I have not yet invested Bitcoin for my clients or myself, I am willing to consider it if it meets my usual investment criteria. One of those is that it can be charted.

What do the charts say about Bitcoin now?

Click to enlarge

Remember that time when Bitcoin ran up to seemingly impossible heights, then dipped below 8,000, then crashed to under 4,000? Above, you see the price of Bitcoin over the past couple of years. It shows that last dizzying episode from 2018. And to me, it appears to be setting up for a repeat downward performance in 2020.

Now, technical analysis (charting) is more precise when there is deeper data and history behind the price activity. With Bitcoin’s limited history as a popular asset, and the fact that it is not a business like a stock, we have less to work with than we would with a stock or commodity. However, if you look at the right side of the chart, you see an orange line—the 50-day moving average of Bitcoin’s price. That line is falling, and it is close to falling below the red line—the 200-day moving average. This is occurring while Bitcoin is quietly in the midst of repeating its early 2018 price pattern.

That last round of Bitcoin price drama had a similar pattern, as you can see in May of 2018. At that point, the orange line crossed below the red line, just as it is poised to do now. That “death cross,” as chart geeks often call it, is happening now at about the same Bitcoin price level (8,200) as it did then.

Will history repeat?

I don’t know, but I wouldn’t simply blow this off as a coincidence. After all, the downside risk of ignoring the chart pattern in Bitcoin was about $5,000. Bitcoin fell from that 8,200 level to about 3,250 at its December, 2018 low, before quadrupling in value 7 months later.

And that brings me back to my main point: Bitcoin is not an “investment” at this stage of its development as a marketable security. Neither are small marijuana companies and penny stocks. They are trading tools for virtual rooms of speculators. It is somewhere between a casino and the latest version of the “greater fool theory,” where you can profit from owning it as long as someone is willing to buy it from you. I would insert an analogy to tulip bulbs here, but suffice it to say, just look that up yourself.

“Big shots”

Last point: one of my personal investment tenets, and what I say to clients who tell me they are investing in Bitcoin or some other trading toy, is this: “It’s OK to take big shots, as long as you do it with small amounts of money.” Just don’t confuse speculation with investing.

Rob Isbitts is founder of Sungarden Investment Research.

Original article at IRIS.xyz

How to attract Accredited Investors and convert investor leads

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Accredited Investor

Is your company attractive to investors

How long will it take to get returns on investment? Accredited investors or high-net-worth investors focus on ROI more than what your company does.

All entrepreneurs have one thing in common. They really believe in their company and its future. Most entrepreneurs have their heads in the clouds and live in the future of prospective sales, clients and the company’s success.

How to approach potential accredited investors or angel investors.

  1. Make sure you have your company registration filed and legal.

    This is essential. Registering your company and having all your legal forms ready is the most essential requirement. Your company may need a sales license and other state requirements. Ensure they are filed and ready. Your company name should be files with the state, sellers permits and EIN numbers ready. A bank account should also be set up for the company. Without these basics. Don’t go any further.

  2. Get your company message right.

    Your team should all agree on what your company does and its value proposition for investors. Practice and rehearse your elevator pitch. Deliver 3 sentences that describe what problem your company addresses and how it addresses it.

  3. Don’t over-hype your company

    Don’t describe your company in terms of Amazon, Google, Facebook, etc. It makes no sense when looking for an investor to discuss how you will become the next Unicorn. Talk realistically about your team and their experience. Talk about your company’s successes and your timeline for major accomplishments.

  4. Respect investors’ time.

    Accredited Investors are usually inundated with companies looking to get their attention. If they seem like they are not interested, simply ask if you can follow up with them at a later time and ask for their information. There is nothing more annoying than following them around at conferences or approach them at every social occasion. You are wasting your time when you can try to source an investor who may be interested. If the investor is interested you will know.

  5. Have your website and investor deck ready.

    1. Have a website, that is not made on wix or squarespace. These tools may be ok for some businesses but in general an investor wants to see something more than just a basic site.
    2. Have business cards handy. This should be a basic thing, but there are times that your business cards are in your jacket, briefcase or you didn’t get any. If you cannot hand your business care, it is better not to approach an accredited investor. They are not going to take notes to look at your website on your phone.
    3. Create an easy to see link on your site to your Public Pitch deck. If you have videos have links clear. Don’t ask the investor to watch your youtube video pitch with your phone in his face.
    4. Ensure that your pitch deck is polished and that you have all the necessary information and financial modeling investors need to make an informed decision. Hire a professional to ensure that your investor deck will deliver the most accurate and concise information for investors. Your team should also be able to discuss all this information, don’t say “Our CFO is not here but let me call and see if we can get them on the phone.”
    5. Your team should rehearse and discuss so everyone delivers the same message. Enter pitch battles or other public forums to get feedback on your pitch. This is a great way to learn what questions your team will encounter from investors and help your team deliver a consistent message.
    6. Don’t lie about who may invest. Don’t discuss other investors or lie about interested investors in your company. There is nothing worse than saying there is another investor interested to try to close the deal. Suddenly, your current prospective investor can call or verify the information. This will make you or your company look ridiculous.

Investors focus on team experience, company progress and timelines to exits

Ensure that your team can engage the investor in light conversation at first. There is no need to ask how much they are willing to invest in your company during the first discussion. If the potential investor brings it up, then that is all the better. The best course of action is to discuss how much your company is looking to raise and how much it has raised so far. This makes it easier for the investor to gauge interest in your company from other parties. Don’t lie about how much you have raised.

Marketing to investors online.

Engage a professional investor marketing company with a background and seek legal advice before you begin any investor relations or investor marketing campaign. Engaging investors will require legal and financial advice. Make sure you can get all legal documents signed and delivered quickly. You may be required to issues shares and deliver legal compliance information. This should not be done as needed. These documents and legal representation should be already agreed upon and selected by your team.

Delivering late information or not having an agreed-upon term sheet ready will delay any investments and will also look very bad.

Email marketing to investors is not a numbers game. The more emails you send the less likely you are to achieve your goals. The rule is that you engage only warm investors. Cold accredited investor leads and investor email lists are not going to work

Hire and professional investor relations or investor marketing company that understands how to get your company message in front of the right investors. Targeting accredited investors is a difficult task. Emailing cold leads will not work and can cause serious issues for your company.

Here are things that your company should consider. Engaging 30,000 cold accredited investors will not get any investment. Connecting with 100 accredited investors who can see your website, read your pitch deck and are looking for your type of company will lead to 30% of these investors actually putting money in your company in the first round or further rounds. Most accredited investors will invest $100,000 to $250,000 or more in companies when they are approached in the right way.

These are real numbers that entrepreneurs need to understand with every interaction they have. Don’t ruin your company’s potential by not delivering the right message in the right way.

If you engage multiple accredited investors who seem interested but then do not invest. This may be a message that your company is not on track and your team should look into the reason why. Simply ask the accredited investor, they may tell you. Don’t take it personally. Take it as constructive criticism.

 

Here are some answers that you may hear from the accredited investor who doesn’t invest:

  • Company Valuation is off
  • Company is not ready yet
  • Your team is not experienced enough
  • Your company strategy is not focused
  • A team member may be toxic
  • There has been no personal investment
  • There are too many similar competitors
  • Too hard to sell the idea to others
  • Legal issues
  • Terms sheets
  • No track record for the company

For companies looking to attract accredited investors and get angel investors, take the advice from investors who may add more critical criticism than you are used to getting. If your team is not a team, cracks will show. If you hide anything or lie about anything, this may also be uncovered and you may face fines or legal issues form lying to investors.

Security Token Offerings the ways to avoid financial crisis

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Security Token Offerings the ways to avoid financial crisis for 2019 and beyond

The world economy is still struggling to recover from the 2008 Financial Crisis. Years after the massive economic collapse of countries wealth and the loss of $ trillions, we are still balancing the world economy on this same house of cards.

The world financial system is set for another downturn, many experts feel this will be even more catastrophic than in 2008.

The markets are at an all-time high and we have seen this before in the 1970s and 2008  before the massive crash that came. The time for a better, more secure investment system is already here, but, sadly mainly disregarded due to negative publicity.

The causes for the 2008 financial meltdown are still debated among experts but most agree that the deregulation of residential mortgage-backed securities (RMBS) portfolios mixed with overreaching government policies that drove lenders to issue subprime mortgages.

Distributed ledger technology offers a transparency and liquidity solution that through security tokens can achieve a better investment alternative.

Security Tokens and Security Token Offerings

Security tokens serve as a digital representation of any other tradable financial asset, including equity shares of a company, interests in funds, contracts entitled to a specific slice of future revenue streams, ownership of intellectual property, fractional ownership of real estate and other physical assets, and derivatives themselves. Security tokens can be easily regulated and managed. Security tokens deliver an easier way to form capital and set the stage for a new reformed financial service infrastructure.

Private Placement through a security token offering (STO) traded legally on exchanges, which comply with existing regulations will become a better investment alternative over the coming years.

Security Token Offerings (STO), should not be confused with the initial coin offering (ICO) craze that was so popular in 2016-2018. Over 95% of the ICOs launched have either failed or become embroiled in legal issues. While security token offerings are a form of initial coin offerings there are many differences that should appeal to investors.

SECURITY TOKEN OFFERINGS CAN SAVE A FUTURE FINANCIAL MELTDOWN

Recent downturns and corrections in the stock market are heightening fears of an impending financial meltdown. For some, this looming financial crisis will see the biggest single stock market crash in history along with the huge downturn in global economy.

To address this the adoption of security tokens should be the talking point on every economists and financial networks radar, yet, sadly, they are being ignored by the media and financial institutions.

Many see cryptocurrency as just Bitcoin or have recently heard about Facebooks Libra coin and are not too impressed with the speculative qualities associated with many of the cryptocurrencies, that were promoted.

In 2018 the cryptocurrencies market plummeted from $800 billion in January to $121 billion in December, giving rise to cynicism, skepticism and mass exits from the cryptocurrency market as a whole. Furthermore, the mass ICO market that yielded the simple agreement for future tokens (SAFT) confused many as these were not security tokens but utility tokens and many were created only for pump and dumps on exchanges.

Security tokens are in fact offering an alternative and more importantly can help provide a base level for a reformed financial service infrastructure that can address the flaws and weaknesses that led to the financial crisis. Security tokens offer the benefits of liquidity and transparency while resolving the issues experienced through flawed ICOs by embracing compliance, protecting privacy and automating regulatory reporting.

SECURITY TOKENS PROVIDE THESE KEY FINANCIAL BENEFITS:

  • Portfolio transparency:Security tokens offerings give investors direct, real time software driven access to portfolios and underlying financial assets. Therefore, investors can make their own assessments regarding portfolio performance, letting the market play out naturally as conditions change. Furthermore, these securities exist on the blockchain ensuring a transparent, immutable record of transactions, preventing users from “cooking the books”. Token holders are given the ability to manage their portfolios via direct access to transaction records that cannot be altered. Transparent record-keeping of transactions, investments, portfolio performance and origin of assets at every step along the way. Demonstrated clarity around how more complex instruments have been pooled, broken up into tranches, rated – and by whom and when -directly for both investor and the regulator, who have the ability to track the lifecycle of the asset, security or financial instrument.
  • Decentralized ratings: A direct result of transparency of security tokens means many entities are emerging with competing technologies to rate the value and viability of the offerings in the security token industry. This trend in decentralized rating combats the massive trust issues created from easily manipulated ratings in traditional financial sector. This “decentralized analysis” also provides the basis for innovative new models to rate offerings in real time and employ advanced techniques, such as machine learning.
  • Efficient, objective pricing: As institutional adoption grows and STO market comes out of its infancy, more influential and available security token offerings backed by key players will enter the market. STO platforms will offer an ideal convenient model for access, trading and monetization. Market makers and other tools offered by these platforms will improve buying and selling opportunities, even with minimal market participants. Furthermore, this will provide efficient, market-based pricing for almost all tokenized assets.
  • Elimination of “too big to fail” offerings: Security token platforms offer a streamlined compliance models and access to secondary markets. These capabilities deliver and substantially reduce the costs of capital formation, creates lower barrier to entry for all securities offerings and encourages innovation – leading to more investment choices and opportunities for diversification.
  • Liquidity at all market levels: Security token platforms offer seamless market access and dramatically reduce the cost of compliance and reporting. Therefore, assets of any size can be brought to market and, in many cases can be made available to masses in a more scalable and inclusive way. Institutional and retail investors will have the ability to efficiently monetize their investment interests, rebalance their portfolios and access opportunities previously unavailable to the majority of investors. Broader liquidity pools brought on by interconnected global secondary markets and streamlined liquidity that allow for instant settlements and atomic swaps. STOs would be the best answer to the complying with legislation written in the 1930s, by opening liquidity in secondary market leaving out retail investors from owning assets prior to IPO and only allowing institutional and accredited investors.
  • Control: Retail, accredited investors and institutional investors gain greater control over the management of their assets through transparency, direct access to further empowerment to control the parameters of their investment portfolio. Coupled with streamlined compliance frameworks and interconnected secondary markets, delivers more effective market making that promotes cross-border liquidity at range levels.
  • Access: The cost of completing an IPO in the U.S. is prohibitive and the continuing compliance does not make economic sense for most companies in today’s financial systems. More readily available and accessible investment opportunities at both the primary issuance and secondary markets on investments and trading size, reduce costs, provide more diversified opportunities to hedge risks related to investment portfolios.
  • Compliance: Real-time regulatory reporting on cash flow, allows discrepancies and risks to be easily and upfront identified to allow measures to be taken by central banker and policy makers, to counteract stresses to the financial system through monetary policy. Security tokens can be coded autonomously comply with relevant regulations and laws.
  • New Assets: Emergence of new financial instruments vehicles such as contingent capital in token form, which are essentially IOUs that imitate bonds and generate a return until maturity will reduce lag time in needing to quickly and effectively pivot to absorb market shocks.

NASDAQ PREDICTS 2019 WILL BE THE YEAR OF THE STO

The Nasdaq predicts that 2019 and beyond will see the STO becoming the ne norm as regulators in global markets work to set the stage for adoption and stable regulatory environments.

The adoption and education on the best practices for the STO is urgently needed and should be adopted by more institutions and investors quickly, before the global economy is at its knees again.

Reg A+ will gain momentum in 2020

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Reg A+ 2019

Reg A+ Investing will become big in 2020 and beyond for public and private companies

Before 2015, a business looking to raise money had very limited options. The most common avenues were an initial public offering or raising capital privately. This left only seasoned companies and accredited investors to reap the benefits leaving a pool of investors.

The JOBS Act in 2012, rang in new era for companies and investors. Specifically, Title IV, known as Regulation A+, which is essentially a “Mini-IPO”. Reg A+ has opened opportunities for small-cap U.S. and Canadian companies looking to raise capital and investors looking for new access to pre-IPO investment deals.

The Benefits of Reg A+

In a Reg A+ offering, a company raises investment capital by creating a new class of stock that can be bought and sold on a secondary market (such as national exchange or OTC Markets) by the general public. The offering can also be combined with venture capital, allowing the company to create an even larger raise during the funding round.

A key feature of the Reg A+ process is the ability for companies to “test the waters”. This gives the company the ability to confidentially submit and offering circular to the SEC while also gauging potential investor interest to see if there is enough public interest to justify the offering.

THERE ARE TWO TIERS TO REG A+ OFFERINGS. 

REG A+ TIER 1

Tier 1 Reg A+ offering, allows for companies to have a public offering up to $20 million in a 12 month period, no more than $6 million of which can be raised from affiliates of the issuer company. Reg A+ offerings as subject to both federal and state requirements, and there is no limit to how much any one investor can invest in the offering.

Furthermore, companies raising through a Tier 1 Reg A+ offering have to disclose and submit their financials for review, but are not required to continuously report them once the Tier 1 offering is complete.

REG A+ TIER 2

A Reg A+ offering have more stringent regulation that their counterpart. They allow for a company to raise up to $50 million in a 12 month period, not more than $15 million can be raised from affiliates of the issuer company.

Unlike Tier 1, the Tier 2 offerings are subject to federal review only, but they do require addition and ongoing reporting requirements such as audited financials with semi-annual and annual reporting. Furthermore, no investor or group can invest more than 10% of their annual revenue or net worth in a Tier 2 offering.

WHY WOULD COMPANIES FILE FOR A REG A + OFFERING

The process of setting up a Reg A+ offering is less complicated and more cost effective than a traditional IPO. This makes to appealing to small-cap, micro-cap market sized companies who wish to raise capital without going public.

Initially, Reg A+ offerings were only available to non-SEC reporting companies. However, in 2017, a provision was added allowing for SEC-reporting companies to raise capital through an online offer under Reg A+.

The new amendments to Reg A+ lower the barriers to entry for small-cap companies seeking public offerings. They also allow for added flexibility when structuring transactions – bridging the gap that exists between public and private offerings, reducing the costs and complexity of running a public entity.

SECURITY TOKEN OFFERINGS

Reg A+ offerings will also be the go to investment vehicle for STO (security token offerings), as more companies opt to raise through the new ICO compliant raising model.

Facebook Libra Cryptocurrency is really aimed at accredited investors! Don’t be fooled

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Facebook Libra Cryptocurrency is really aimed at accredited investors

Facebook announced their Libra Cryptocurrency but there are two coins being “minted”.

Libra coin has 2 very distinct and separate uses, it is in fact two separate coins. While one coin will be used for mass adoption for the unbanked approx. 2 billion people globally the second is aimed directly at the institutional and accredited investors.

Facebook newly announced cryptocurrency reeks with everything that Facebook is, or has become, it is lack of innovation and lack of foresight backed by Billionaires who have no connection with real world issues.

Facebook Libra Coin

The humanitarian Libra coin which Facebook will tout and be applauded for is nothing new, cryptocurrencies are being used in countries like Venezuela and in developing countries in Africa. Furthermore, Facebook has more to gain by delivering a global crypto currency and digital central bank.

To look at their lack of innovation since 2014, one could argue, that this is just another great way for Facebook to track, monitor and grow their business. Let us be aware of the many concerns about privacy, hacking and tracking that are looming over Facebook in many countries including their issues with 2016 US Election advertising scandals thanks to Russia.  Mr. Zuckerberg sat in the Congressional hearing like a kid who had stolen a car, but, had no idea how it worked.

Their head long jump into global cryptocurrency domination is naive at best. It will generate a mass adoption in cryptocurrencies, but will have so many issues on roll out it will take 2 – 3 years for it to really become a purchase vehicle.

The hype surrounding the crypto currency and the simultaneous order by the SEC that US citizens cannot hole alt coins after September is really a worrying scenario for true cryptocurrency evangelists and early adopters.

Bitcoin, will stay in and slowly grow, it is after all the Granddaddy of all crypto currencies, and Ethereum will become the true innovator of the landscape delivering the real crypto landscape to the enthusiasts and developers. Facebook, however, will be the behemoth that will create nothing new and keep many in ignorance of real developments in the blockchain and crypto universe.

The social network recruited the founding members of the Libra Association, a not-for-profit which oversees the development of the token, the reserve of real-world assets that gives it value, and the governance rules of the blockchain. “If we were controlling it, very few people would want to jump on and make it theirs” says Marcus.

Each founding member paid a minimum of $10 million to join and optionally become a validator node operator (more on that later), gain one vote in the Libra Association council, and be entitled to a share (proportionate to their investment) of the dividends from interest earned on the Libra reserve users pay fiat currency into to receive Libra.

Libra Investment Token for Accredited Investors

Facebook has a second coin the “Libra Investment Token”, their real reason for the cryptocurrency entrance. This coin will only be available to Accredited Investors and Institutional investors to be used as investment in more companies and enterprises that Facebook will slap its logo on.

If the masses are not able to use the coin then really its not a cryptocurrency at all and Mark Zukerberg and his team of billionaire VCs have not understood anything about crypto currency.

One Central Global Crypto currency, just this term should be like nails on a chalk board to any decentralized digital ledger convert.

We will see the crypto landscape become exactly what we railed against, a centralized, elitist currency that will control the worlds entire cryptocurrency value.

I am all for cryptocurrencies but I do believe if we refer to the idealism of non-governance and non-centralized systems, we should be holding our heads down now at the death of a dream.

Facebook, last year banned blockchain advertising along with ICOs, as did Google and now they are launching an assault, on many blockchain and crypto projects, while the SEC cower to the might FB Coin.

If my dreams can come true, this will fall along side the much hyped and yet to be delivered EOS platform and people who actually do not get their news from Facebook will standfast.

This will not happen and Facebook will become the controlling crypto currencies and we will all be forced in some way or another to adopt this coin. I could quote revelations in the Bible, but this mark of the beast is not real evil its just not good for people as a whole.

 

10 Reasons why STO (Security Token Offering) Will Become Huge Investment vehicle

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Security Token Offering

10 Reasons why STO (Security Token Offering) Will Become Huge Investment vehicle

In 2017 the world learned about initial coin offerings (ICO) as the start-ups began raising capital in a new and innovative way. In 2017 and 2018 more than $14 billion as invested through ICOs in Blockchain companies as investors were eager to cash in on the crypto craze. The companies too held this as a new, less complicated and expensive way to raise capitals.

Since 2018 the ICO market has gone all but bust, but the legacy of the new crowdfunded investing model will become a mainstay for many companies who will enter into legitimate raises in the future.  More start-ups will look to tokenize real assets and leverage the power of the crowd to finance their next project. The new regulation put in place by the U.S. Securities and Exchange Commission (SEC), has deemed all crypto assets except Ethereum and Bitcoin as securities for all projects seeking exposure in the U.S. Market.

The SEC has stated that it does not differentiate between so0called utility tokens and security tokens. All token offerings must comply with federal securities laws. Hence, the new investing vehicle the Security Token Offering (STO).

10 Reason why the STO will change then investment ecosystem

High-quality, compliant cryptocurrencies are a sought after commodity. Early STO investors will become a new breed of investors. As with early bitcoin and crypto investors they will have most to gain.

  1. STO Credibility

    STOs that follow federal guidelines and are approved by the SEC will become instantly credible. Furthermore, this will take more of the grunt work investors will face in evaluating the projects or the companies.

  2. Legitimizing crypto investing

    Increased regulation and credibility will help to end much of the stigma around cryptocurrencies among traditional investors. STO investors are banking on more than just institutional investors and look beyond bitcoin futures and custodial services.

  3. Micro-investments

    The main attraction of ICOs was the low barrier to entry relative to other capital markets. STOs could take micro-investing mainstream and allow more people to participate and invest in Start-Up ventures that were previously restricted to institutional, VCs and Accredited investors.

  4. Crypto as a Security

    Platforms like tZero will become more popular and familiar and help deliver new regulated STOs for trading. This will mean cryptocurrencies will be traded lie a security, giving STO investors ownership, voting and asset allocation rights. This could mean STOs being included in tax-free savings and retirement accounts.

  5. Ownership of Security

    Whereas the “utility tokens” were delivered as future access to a product or service, a security token represents actual ownership of and underlying asset. If you invest in a real estate STO, you will actually hold shares in a physical property rather than an IOU for a future date.

  6. Programmable Ownership and Compliance

    Security Tokens are programmable by nature, this ensure compliance protocols can be embedded into actual assets and amended over time. ICOs did not have this level of sophistication

  7. High Success Rate

    Most of the ICOs have gone bust or are in the process of going out of business. The early track record for STOs has been extremely positive. STOs currently have a 99% success rate. ICOs were merely pipe dreams based on white papers. STOs have something real to offer investors.

  8. Low Fees for STO Investors

    Blockchain technology reduced the need of expensive middle-men and those savings will be passed on to STO investors. The emergence of the low-fee investing will serve to strengthen the STO model with its programmable compliance and ownership features.

  9. Decentralized assets remain decentralized

    As the SEC has already noted, regulation impacting security token offerings have no bearing on assets that are “sufficiently decentralized”, such as Bitcoin and Ethereum. The truth is decentralized money is here to stay and more confidence in in cryptocurrency investing will become the norm among investors of all kinds.

  10. Increases Innovation

    A regulated investment ecosystem for tokenization will open the door for greater adoption and, ultimately, new innovations in the Blockchain arena. A more innovative environment means more investment opportunities and increased returns for STO investors. This trend is already underway as more start ups and institutions continue to utilize and develop more decentralized ledgers.

STO investor
The Security Token Offering Investor Outlook

The days of the ICO are gone, but STOs are an offshoot of the ICO just a more regulated compliant and better investment alternative.  The new paradigm will affect every industry and from standard issuance of stocks and bonds to smaller assets like business shares and real estate.

There is a lot for the STO investor to be bullish about in the future. Security Token Offerings will become more accepted and adapted. Blockchain projects are in their infancy and with companies like Facebook launching their cryptocurrency now is the time for serious investors to look at STO.

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