With years of success working with asset backed and equity based securities, we can create and implement a wide range of methods to approach the capital markets and grow your company. These strategies do not always involve giving away equity or taking on substantial debt. Ranging from angel investors all the way to public markets, our capital markets team has raised millions of dollars for projects like yours.
Use cash flow producing assets to regenerate capital.
Offering memorandum method of efficient capital raises.
Build offerings to institutional investors and private equity funds
Get listed on the TSX and TSX-V through acquisition existing listing.
Access the TSX Venture or NEO Exchanges to raise capital.
Fund smaller projects quickly and efficiently.
Find opportunities for buyout or expansion.
Pitch to venture capital and angel investors.
Access to government sponsored business funding programs.
Experience and knowledge to guide you to the most efficient approach to raising capital.
Resources, connections, and experience to access the capital markets.
The potential of raising large amounts of capital quickly and efficiently.
Effective sources of capital even for startup businesses.
Capital can be non-debt, requiring no monthly payments.
No personal owner guarantees, or collateral required.
Limited personal liability for owners and directors.
Off-balance sheet strategies permit future bank financing.
A finance company had successfully used all of its available early stage capital to build its business and develop a portfolio of performing loans. Less than three years in the business and with assets under $15 million, the firm was looking at a slow, evolution, carefully managing its portfolio, looking for new investors and reinvesting its profits, until it grew large enough to achieve a bank loan or some other significant source of capital at low cost-of-funds.
Investment markets have an appetite for private investments, that are not directly correlated to the public markets and offer assessable risk, medium yield and stable cash flow. Investors were able to subscribe to secured corporate bonds of a corporation, designed as a special purpose entity (SPE). The bonds provided regular quarterly interest returns to bondholders and were collateralized by an approximately equal value of performing loans, sold to the SPE by the finance company who originated and serviced them. The bonds were eligible to be purchased through registered plan funds (RRSP’s and TFSA’s) and sold to investors via exempt market and IIROC dealers and managed by an investment fund manager. By partnering with investors in this way, the finance company was able to gain administration and servicing fees, retain a growing residual interest on the loan portfolio, handoff part of its risk to investors and replace its capital as required. It was able to grow the volume of loans that it originated from $13 million to over $60 million, pay back its founding investors and earn $1.2 million in net profits for the company, in just the first year. The finance company financial statements did not need to show any debt, in connection with the sale of bonds, only the successful sale of originated loans and the resulting service fees and residual interest income, it retained. With no significant debt on its books, the finance company was free to approach banks or other institutional lenders for low-cost operating lines, to expand its business and profits even further.
Selling your cash flow producing assets to a SPE, while retaining servicing and residual interest income, is a well-defined method of exponentially growing your business and revenues.
An experienced custom home builder wanted to expand his operations to developing a sixteen-unit townhouse development,potentially in high demand in his hometown. He had identified and put an option payment on an appropriately zoned parcel of land, available for sale. To proceed with the project, the builder required $1.2 million to complete the land purchase and $4.7 million for servicing and construction costs of the townhouses. The final sale price, once the entire project was sold to homeowners, was estimated at least $9.60 million, for a minimum net of $3.70 million. The builder was confident that with sufficient funding, he could complete the project within three years. Local banks and finance companies would only offer a maximum of 35% of the project, in staged advances, all secured by a first mortgage.
To fund this worthwhile project, a private mutual fund trust was created, using an offering memorandum, allocating a maximum of $6 million worth of trust units. These trust units were eligible to be purchased within registered plan accounts. A full exit was targeted at the end of 3 years and investors were paid the equivalent of 12% per annum, totalling 36% of their investment, at the end of the three-year development plan. Mutual trust units were sold primarily to local investors, with the additional privilege of allowing investors to have first rights to purchase one or more townhouse units, at retail value. The mutual fund trust was fully subscribed to in just 3 weeks, largely through local word-of-mouth. Local investors proved to have a high level of interest in a project, knowing that they could drive by and see the progress everyday. The townhouses sold slightly higher than expected and ultimately produced $1.32 million in gross revenue for the builder. The mutual fund trust was reused for another development project, just a few months later.
Banks are not the only, or even the best, way of trying to finance real estate development projects, no matter how large or small.
A privately held software company owed some of its success to providing equity participation to its employees. After almost 5 years of growth, building to 130 highly valued employees, the company now had substantial assets based on the value of its patented applications and resulting contracts. The company needed ways to attract more capital, grow the firm to a world class enterprise, and make the company shares more liquid for its employee and owner shareholders.
The best way to create liquidity for the company’s shares, was to have the company go public and become a reporting issuer on the Toronto Stock Exchange. That way, the company’s stock could be freely traded and the equity incentives given to owners and employees would have real value. The company would also be able to use a TSX listing to raise additional capital, if required, and be noticed on the world financial stage. While embarking on an IPO was considered, the market for IPO’s was deemed too unpredictable and the time frame to execute was considered too long. It was decided instead to take a simpler, faster backdoor approach to the market, using a reverse takeover of an already listed but dormant shell company, known as a Canadian Pool Company (CPC). Several CPC’s were available and, after due diligence, a oil and gas shell company listed on the TSXV exchange was selected. The reverse takeover process took less than 75 days to negotiate and resulted in arenamed TSXV listing for the company.With a market value of $21 million, the reborn listing was fully tradeable and open to future further share issuances, to raise capital, as the company continued its growth.
Public stock market listing can give a company better access to liquidity, raise its profile, increase its ability to grow and expand and generally increase its value. Public companies often trade at higher multiples than they did when they were private. Founders and employees are also able to benefit from the opportunity to invest in their company or cash out some of their stake. A reverse takeover of a CPC may be a faster and cheaper approach to becoming a public entity.
We are a one-stop source of domestic and international bespoke financing solutions for your enterprise. Out team has success across the entire spectrum of SME financing and capital acquisition.
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