Capitalization Process


As a principal participant and shareholder, Venture-Net Partners, by and through its general partner acting as a director of the issuer and authorized by its board of directors to perform such functions, assist entrepreneurial managements in the preparation, development and distribution of private offerings of equity securities.

Generally, this may include:

1. A preliminary analysis of a given enterprise or venture and its management team;

2. Negotiations with management concerning Venture-Net Partners’ participation in the company;

3. Cash purchase of a minority equity position consisting of common stock of the company;

4. Development of a private offering plan including management participation, employee incentives, a current and projected company valuation, a forecast of cumulative and compounded rates of return, and an analysis of various sundry terms and inducements such as preferred returns, liquidation preferences, debt-to-equity conversions, capitalization restructurings, voting rights, registrations rights, etc.

5. Coordination (with management, general legal and securities counsel) of solicitations of consents of shareholders and/or bondholders to such plan, if required;

6. Preparation of a comprehensive financial model consisting of an integrated pro forma income statement, cash flow forecast and pro forma balance sheet, compiled on a month-by-month basis, beginning with the anticipated private equity capitalization through the projected liquidity event (generally three to five years) with annual summaries, a narrative summary of forecast assumptions and concomitant valuation model.

7. Development of offering, disclosure and closing documents for the private offering plan and coordination of the efforts of management, legal counsel, securities counsel, corporate and/or independent accountants in connection therewith;

8. Identification, solution and/or removal (with management assistance) of obvious and/or subtle impediments to closing inherent in the business history, operations or structure of the issuer, i.e., so-called “housekeeping”;

9. Identification, qualification and solicitation of investors (both private and institutional);

10. Preparation, critique and coaching of management presentations;

11. Participation (with management) in presentations to prospective investors and/or their advisors and/or representatives;

12. Review and analysis of offers;

13. Development (with management and securities counsel) of response to offers;

14. Coordination (with management and securities counsel) of revised closing documents, if required;

15. Coordination of escrow procedure with management, securities counsel and non-affiliated banking institution, if required;

16. Coordination (with management, legal counsel and securities counsel) of solicitations of consents of shareholders and/or bondholders to such revised closing documents, if required;

17. Closing;

18. Post-closing media relations; and

19. Post-closing shareholder relations.