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Essentials of Corporate and Capital Formation

Essentials of Corporate and Capital Formation

David H. Fater

ISBN: 978-0-470-49656-5

Jan 2010

224 pages

In Stock

CAD $47.95


Praise for Essentials of Corporate and Capital Formation

""A very readable, hands-on tool for anyone looking to start a corporation or anyone looking to raise capital. Dave offers up the insight of front-line experience and a to-the-point directness that will aid the reader in cutting the process and gathering time in half.""—Ken McClure, Senior Vice President, Bowne, Inc.

""Essentials of Corporate and Capital Formation provides the entrepreneur a wonderful road map through the small-cap world of forming a business, raising capital, and dealing with the challenges of being a young public company. This is a must-read for all first-time C-level executives who want to build a business using investment capital.""—Lester Rosenkrantz, President, Cameron Associates, Inc.

""This is a valuable resource for anyone looking for concise information on the various tools available to launch and grow a business. Filled with real-world tips, this book speaks with the voice of a knowledgeable advisor who is himself an experienced and successful entrepreneur.""—Michael S. Blass, Managing Partner, Arent Fox LLP

""David Fater's Essentials of Corporate and Capital Formation is the book that will help transform the budding entrepreneur into the successful business owner. Clearly written and easy to understand on all levels, Essentials of Corporate and Capital Formation covers the gamut of owning a business, from the correct form of incorporation to the final profitable exit strategy.""—Andrew J. Lubin, author of Charlie Battery: A Marine Artillery Unit in Iraq (2007 Gold Medal, Military Writers Society of America), Journalist, U.S.M.C. Combat Correspondents Association,

""This book is informative and valuable for any C-level executive ready to grow his business. The author has walked many companies through this process.""—Richard M. Cohen, Chief Operating Officer, ALDA & Associates International, Inc.


About the Web Site.


1 Corporate Structure.



Limited Partnerships.

Limited Liability Companies.

Operating Agreement.




2 Initial Capital Formation.


Other Forms of Straight Debt.

Convertible Debt.

Mezzanine or Hybrid Debt.


Common Stock.

Preferred Stock.

Convertible Preferred Stock.

Mandatory Redeemable Preferred Stock.



3 Finding the Capital.

Are There Really Angels in Heaven?

Venture Capital.

Private Placements.


4 Pitfalls.

Regulation 506 D: Areas of Opportunity and Uncertainty.

Subscription Documents.

Investor Count.

Risk Factors.

Offering Documents.

Form D.

Placement Agents and Finders.

Romanian Raise.


5 Public Markets: Are They Right For You?

What It Means to Become a Public Company.

Benefits and Opportunities.


Decision to Go Public.

Advance Planning.


6 Entering the Public Markets Conventionally.

Formal Process: Underwriting.

Who Gets Involved?

Underwriting the Offering.

Selecting the Underwriters.

Beauty Contest.

Working with the Underwriters.

Registration Process.

Due Diligence.

Filing and the SEC.

Completing the Offering.



7 The Public Markets—Other Issues.

Reverse Merger (Shell Game).

Transaction Process.



Pump and Dump.

Taking Appropriate Precautions.

Making the Shares Trade.

Operating a Public Company.


8 Exit Strategies.

What Is an Exit Strategy?

Role of Management.

Entrepreneur versus Executive.

Determination of Goals and Direction of the Company.

Evolution of Executive Concerns.

Development of the Strategic Plan.

Why Is Strategic Planning Important?

Real Exit.


Historical Financial Statements.

Quality of Earnings.

Meeting with the Auditors.

Forecasts and Projections.

Structuring the Deal.

Allocating Purchase Price.

Financial Covenants.

Debt Repayment Schedule.

Reporting Requirements.

Management and Administration.

Transaction (Closing).


9 Success In the Real World.

Formation Process.

Capital Raising.

Capital Sources.

Going Public.


About the Author.