Special/Angel-And-Venture-Capital-Guide.com
Title
Your Angel and Venture Capital Guide for Raising Capital
Description
Excerpted from the website:
- This site by Joseph LaRocco provides useful tips and information regarding equity line funding, as well as debt and equity solutions for private and public companies. It gives advice on deal terms, negotiating with investors, preferred voting rights, and convertible securities transactions to name a few.
Equity line funding has been used by public companies working capital, to make acquisitions or to even meet their loan payments. The equity line structure is based on a formula which is used to determine the amount of funding the company will receive at the end of the pricing period.
One significant benefit of equity line funding is that the company can control the timing of draw downs. A number of terms and conditions are used to give the company additional control over the draws down and include the following:
- agreed upon discounts based on the share’s closing prices or the volume weighted average price of the common stock;
- the company controls the amount requested in each draw down;
- the company can choose its own floor price below which shares cannot be sold during the draw down period chosen by the company;
- the company controls when it wants to issue draw down notices to the investor.
Some companies use this funding structure to have in place when they need capital resources, even if they don't necessarily need capital at the time they sign the final agreement with the investor.This way it is in place when they need to draw down funds.
As Joseph LaRocco explains to his clients, “One of the key things to keep in mind is that financing transactions are constantly evolving and new structures are used each year. It is only by carefully working with a client and understanding the transaction that a funding structure can be crafted that benefits both sides. Although, it is important to understand the needs of my private investor clients, it is equally important to understand the needs of those companies that my clients will be funding, so that a mutually acceptable agreement can be drafted and signed by both parties. It is by concentrating on this goal that distinguishes a successful transaction from one that does not meet the expectations of the investor and the company being funded.”
Joseph B. LaRocco represents clients that provide equity and debt funding to private and public companies. Mr. LaRocco has been involved in numerous equity line funding transactionsequity line funding transactions, private placement closings and convertible debt offerings. Joseph LaRocco was involved in some of the first equity line funding structures and has drafted a number of versions to be used on US and non-US exchanges. He is often called upon for his advice and expertise in structuring various funding transactions in the US, Africa and Asia. He has advised investment managers on numerous trading, regulatory, compliance and anti-money laundering issues. He has structured and formed domestic and offshore hedge funds and has represented hedge funds in many private placement transactions. Joseph LaRocco is a graduate of Southwestern University School of Law and Pace University.
