Investor Expectations
Karl Dakin
I help you overcome challenges to raising capital. Take advantage of my Motivated Money Method to identify those investor candidates that are most likely to invest. Top expert in fundraising.
Every investment offering will create an investor expectation. Problems arise when these expectations are not met. The investor is unhappy. This may cause challenges for a small business:
·?????? The business will need to expend time to engage in extra communications with the investor
·?????? The business may need to justify its actions and operations that led to the outcome less than what the investor expected
·?????? The business may need to change
?The investor may believe that they are a victim of fraud based upon the failure of the business to disclose all material information or that the business provided false information. The investor's belief commonly results in the engagement of attorneys. This may lead to filing a legal action by the investor and/or an investigation by a regulatory agency. A finding of fault concerning capital campaign communications may result in a return of investment monies to the investor, a payment of losses, a payment of a fine, and a payment of the legal costs of the investor in addition to all of the time and expenses of the business.
?Against this possibility, to raise capital, the business must provide investor candidates with all current and complete information regarding the past and current situation of the business as well as a projection of the future.
?Forward-looking statements in a slide deck, offering memorandum, or regulatory filings are not contractual commitments. However, they are the basis of the expectations of investor candidates.
?Offering documents will contain language like that set forth below:
?ALL FORWARD-LOOKING STATEMENTS IN THIS PROPOSAL INVOLVE RISKS AND UNCERTAINTIES.?
?ALL STATEMENTS CONTAINED IN THIS PROPOSAL NOT CLEARLY IN THE PAST AND HISTORICAL ARE FORWARD-LOOKING.?
?THE WORDS ‘ANTICIPATE’, ‘BELIEVE’, ‘EXPECT’, ‘ESTIMATE’, ‘FORECAST’, ‘PROJECT’ AND SIMILAR EXPRESSIONS ARE GENERALLY INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS.
?FORWARD-LOOKING STATEMENTS ARE INCLUDED, FOR EXAMPLE, IN DISCUSSIONS ON PROJECTED SALES AND REVENUES.
?THE ACTUAL PERFORMANCE OF THE COMPANY MAY BE GREATLY DIFFERENT THAN ANY FORWARD-LOOKING STATEMENTS.
?WHEN READING THIS PROPOSAL, EACH OCCASION WHERE YOU SEE A FORWARD-LOOKING STATEMENT, CONSIDER THE IMPACT UPON YOUR PROJECTED DISTRIBUTIONS AND INCENTIVES IF THE FORWARD-LOOKING STATEMENT DOES NOT OCCUR OR THE OUTCOME IS GREATER OR LESS THAN STATED.
?In drafting offering documents, the business should be sure that any statement regarding the future is property characterized by one of these descriptor terms.
?Despite these disclaimers and warnings, investor candidates may latch on to a statement regarding future sales, revenues, customers, testing, or other events or outcomes as a promise with the weight of a contractual obligation. This is particularly true of less sophisticated investor candidates who may need more experience in investing.
?The offering documents serve the purpose of warning investor candidates of things that may happen that prevent or hinder a business from obtaining its goals. These warnings – statements of risk – act like an insurance policy if an investor engages in litigation.
?Short of litigation, an unhappy investor is a challenge to be avoided. When communicating with an investor candidate, the small business should evaluate the investor candidate's understanding of the business and their expectations. A small business would be better off refusing to take an investment from a starry-eyed investor than dealing with their later disappointment.
?Successful Funding
?Chris Miller will be my guest on the seventh Successful Funding show on Tuesday, March 5, at 8 am MST. Chris is Chairman of the Board of the National Center for Community Capital (NC3). NC3 is advocating for the establishment of Diversified Community Investment Funds – locally owned and operated funds to address the capital needs of a community, including its small businesses and community projects.
?You can register to attend this event at:
?Arlen Meyers was my guest on the sixth Successful Funding show on Tuesday. Arlen, a physician, educator, and advocate for entrepreneurship, was the founder of the Society of Physician Entrepreneurs. https://sopenet.org/ ? We talked about the challenges of becoming a physician entrepreneur, which spans a wide range of issues from higher education, funding, and public policy focused on ‘sick care’ and not on healthcare. Arlen concluded that the greatest investment that anyone could make in improving our healthcare system is to cast a ballot in every election.
You may view all of the Successful Funding shows in my Posts on my LinkedIn profile at: https://www.dhirubhai.net/in/karldakin/
?The Successful Funding show on my LinkedIn profile will repeat weekly at 8 am MST on Tuesdays. You may register to attend by going on LinkedIn, searching for Events, clicking on the Events button, searching for Successful Funding, and then clicking on the Attend button. You should receive an email with a link to save to your calendar. You can also click on the Share button and obtain the URL link to the show to put it in your calendar.
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??Superpowers for Good
?I had the pleasure of being interviewed by Devin Thorpe on his SuperPowers for Good show, which is affiliated with the Impact Cherub Club and SuperCrowd. We discussed impact investing, investing in small businesses as a wealth-building method, and access to capital through investment crowdfunding. Devin advocates supporting small businesses through Reg CF crowdfunding and firmly believes that systematic investment ($100/month) in small businesses will build wealth at a rate comparable with more common investments in Wall Street or real estate.
?The show may be viewed at the following link:
??Don Cohen
?Next Wednesday, I will be a guest on Don Cohen’s show.
?More information will be posted soon on his LinkedIn profile.
??Founded in FOCO
?Next week, I will present a workshop on What is Your Funding Potential? on March 8 from 11:00 am to 12:30 pm in Fort Collins, Colorado, at the Founded in FOCO event.
?The five-day event offers 100+ sessions with 100+ local experts to help you?spark innovative ideas,?learn from peers, and?build relationships.
??SuperCrowd 2024
?I will co-host the SuperCrowd 2024 event, "The Impact Crowdfunding Event of the Year,” held online on April 17th and 18th.
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Karl Dakin, the Capital Coach
Dakin Capital LLC
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Patent Engineer
7 个月I just now paid and started my own LLC. How can I obtain a credit card to maintain the technology that we are using in the automotive industry? Mind you, I have no credit history and I need the infusion of cash to get my product to the final stage of patenting, as I already have a letter of intent to acquire said asset, once patented to the tune of 28.1m. I need at least 25k for the next 45 days. And I can double it at the end of that time frame. Please help. The clock is ticking. I am open to offers. Tia
win and keep customers with the triple bottom line
8 个月Hi, Karl, Scary and necessary advice. I thought all Investors are careful with due diligence and have people who challenge every claim. May I suggest to Ken Hayes that this (and all of your advice) be shared with the Cleantech Open Cohorts and Alumni? Joy
I help you overcome challenges to raising capital. Take advantage of my Motivated Money Method to identify those investor candidates that are most likely to invest. Top expert in fundraising.
8 个月Small businesses need to get investor candidates excited about investing, but remain realistic about outcomes.