Member, Shareholder or Private Equity Offering
What is the best method to bring new investment capital into your existing San Diego LLC or corporation? How do you attract the capital necessary to expand your business or help to smooth the way through cash flow variations? You’ve built your company to a point where additional investment or capital is required to succeed, but you don’t want to relinquish control of your business in order to do it. How do you navigate the balance of attracting an investor or group of investors with issues related to key business decisions and operations?
Generally speaking, a company either must incur debt or offer equity to bring in operating capital. In addition to obtaining loans or lines of credit there are three primary ways that an LLC or Corporation brings investment into the business:
- Add Member(s) or Shareholder(s)
- Private Equity Offering
- Take Your Company Public (IPO)
One of the most common and effective strategies is simply to add a new member or shareholder to the company. This will require creating or amending your LLC’s operating agreement or your corporation’s shareholders agreement. The experienced business attorneys at the Watkins Firm will help you to evaluate how the new member(s) or shareholder(s) will be integrated, and even assist with negotiations to ensure that your company is protected and your interests are preserved. We will guide you through the associated legal and business issues, and ensure that your new member or shareholder seamlessly transitions into your company.
What is Private Equity Offering?
While an Initial Public Offering or IPO places stock in your company for sale to the open market, the cost of the transaction and the stiffening requirements of investors means less than 100 companies a year are “going public”. What is an alternative for small to mid-sized business clients to raise capital and the process to maintain complete control of your company without having to meet expensive and extensive legal and financial reporting requirements? The Watkins Firm will help your business to remain “privately held” while offering an equity position in the company through a private equity offering.
There are strict federal and state securities laws that businesses must fully comply with, so this is not something to ever attempt without experienced legal and business counsel. Our attorneys will help you to build a prospectus and all associated legal documents such as subscription agreements and offer a share of your company to a small group of investors in return for operating capital. We will help you to meet all legal requirements, while clearly defining the risks involved and how you intend to use the funds to be raised. We will discuss issues of control, passive versus active investment and the various vehicles that will help you to attract new investment while maintaining control.
Attract Investment Through New Members, Shareholders or a Private Equity Offering
We have helped thousands of San Diego LLCs and corporations to raise needed capital and take the next steps in their growth. If you are interested in attracting investment capital to your business we invite you to contact the Watkins firm, or call us at 858-535-1511 for a free consultation. We will discuss your business objectives, and establish options to accomplish those goals and budgets for each option.