[Nikki96]

We need a private equity firm for a logistics company

looking to buy himself out of Chap 11

Needs 1.5 mill

does 2 mill a month

Has about 800k in assets but is willing to give up equity in his new co (it has not been created yet)

If anyone out there can help. shoot me a message

Thanks

[Kevin Henry-Seacoast]

We need a private equity firm for a logistics company

looking to buy himself out of Chap 11

Needs 1.5 mill

does 2 mill a month

Has about 800k in assets but is willing to give up equity in his new co (it has not been created yet)

If anyone out there can help. shoot me a message

Thanks

Nikki96,

Are you and your Company properly registered for equity transactions?

KH

[Nikki96]

we are not

[WestCoastFunding]

Uh oh.

1) if you aren’t registered to broker equities transactions, you’ll be breaking the law
2) his gross revenues don’t matter. What matters is net revenues (which he’s in the red)
3) why is he starting a new company? By stating this, debt clearly won’t be an option.
4) can’t see anyone being interested in an equity position in a logistics company

[Nikki96]

yea, I was hoping that I may be able to find a way to make this happen even though I am not licensed, possibly by working with someone who is (in a legal way obviously) But not sure how that'll work. And I get what you're saying, a hedge fund was interested but for the assets he has, they just can't give him 1.5 mill

[abfunders]

Here's the legal way to do it. A colleague of mine has been doing this for 30 years with huge multi-million dollar deals and never had a equity brokers license.

1) Make a deal in writing with the equity company that they won't close without YOU saying "fund."
2) Work the deal as it needed, get it close to closing
3) Wait for the equity money to be put into an escrow account ready for the funding
4) At this point you can make a fee agreement. Do not make it a percentage, that would be illegal. If it's a $1.5mm deal, and you want 3 points, just just a flat consulting fee of $45,000 that will be agreed that can be taken out of closing.
5) Once you both sign, send the equity partner the fee agreement along with the okay to close
6) Equity partner will fund both parties directly

My colleague does it with a Swiss entity, but I don't think that that should be a deal-breaker.

I've never done it, but I don't see why it wouldn't work.

[Kevin Henry-Seacoast]

Here's the legal way to do it. A colleague of mine has been doing this for 30 years with huge multi-million dollar deals and never had a equity brokers license.

1) Make a deal in writing with the equity company that they won't close without YOU saying "fund."
2) Work the deal as it needed, get it close to closing
3) Wait for the equity money to be put into an escrow account ready for the funding
4) At this point you can make a fee agreement. Do not make it a percentage, that would be illegal. If it's a $1.5mm deal, and you want 3 points, just just a flat consulting fee of $45,000 that will be agreed that can be taken out of closing.
5) Once you both sign, send the equity partner the fee agreement along with the okay to close
6) Equity partner will fund both parties directly

My colleague does it with a Swiss entity, but I don't think that that should be a deal-breaker.

I've never done it, but I don't see why it wouldn't work.

Still not legal. If you are not properly registered you cannot earn any compensation in any form. In some state there are rights where the equity investor can demand there money back because it was place with an unregistered party.

[abfunders]

How is charging a consulting fee illegal? As long as it's not a percentage of the amount procured and it's a flat fee.

[Kevin Henry-Seacoast]

How is charging a consulting fee illegal? As long as it's not a percentage of the amount procured and it's a flat fee.

Does not matter how you classify the fee. It is still a form of compensation and not legal. You can sell assets in some states without a FINRA license. Some require a real estate license to do so. You cannot accept any form of compensation for an equity transaction without a FINRA license. Not only will FINRA come after you for doing so, most states will have their AG after you and in some states you get a nice visit to their pokey.