Proof of Funds & Down Payment Investors for SMB Business Buyers: A Capital Raise Solution

Summary

William Fry, CEO of Mainshares and founder of Beacon Business Brokerage, discusses how Mainshares helps SMB buyers close the gap in equity funding. Mainshares provides a network of credit investors interested in owning a piece of SMBs, allowing searchers to find additional equity infusion to complete acquisitions. Mainshares assists in structuring the deal, providing standardized investment documents, and facilitating compliance. The platform also offers tools to manage the capital raise and access to investors. Fry advises entrepreneurs to start early, build relationships with investors, and create a cohesive narrative for the capital raise. He emphasizes the importance of transparency, momentum, and prioritizing anchor investors. The conversation explores various aspects of raising capital and working with a broker dealer. It also discusses compensation for referrals and the trend of all equity deals in the future.

Mainshares legal team asked me to put this here: "Mainshares is a platform for entrepreneurs and investors. Broker-dealer services provided in connection with some of the investment opportunities on the Mainshares platform are offered through Main Street Securities LLC, a registered broker-dealer, affiliate of Mainshares, and member of FINRA/SIPC. For additional information, please contact your licensed securities representative of Main Street Securities LLC or visit FINRA’s BrokerCheck."

Takeaways

? MainShares helps SMB buyers close the gap in equity funding by providing a network of credit investors interested in owning a piece of SMBs.

? The platform assists in structuring the deal, providing standardized investment documents, and facilitating compliance.

? Entrepreneurs should start early, build relationships with investors, and create a cohesive narrative for the capital raise.

? Transparency, momentum, and prioritizing anchor investors are key to successfully closing the capital raise. Working with a broker dealer can supercharge a capital raise and provide expertise in due diligence.

? Referral fees can be paid for self-directed raises, but not for broker dealer raises. Raising capital with a combination of debt and equity is common, but all equity deals are becoming more popular.

? The SBA can be a hindrance for searchers with real estate portfolios, leading to a preference for all equity deals.

Chapters

00:00 Introduction to MainShares and Beacon Business Brokerage

01:02 The Problem of Closing the Gap in Equity Funding

02:01 MainShares' Role in Capital Raising and Deal Closing

03:01 Structuring the Deal and Identifying Investor Preferences

04:20 Standardizing Investment Documents and Compliance

05:42 Differentiating Between Transactional and Strategic Investors

06:29 Flexibility in Working with MainShares and Other Investors

07:20 Pricing Options for Entrepreneurs on MainShares

08:13 Comparison to Other Investment Platforms

08:18 Timing and Preparing for the Capital Raise

09:34 Early Engagement and Building Relationships with Investors

10:04 Structuring the Equity Raise for Different Business Types

12:28 Preparing for Investor Exits and Liquidity Events

13:11 Considerations for Overvaluing a Business

15:18 Creating a Narrative for the Investment Structure 1

6:32 Proof of Funds and Pre-Qualification Letters

17:58 Creating FOMO (Fear of Missing Out) Among Investors

19:10 Timeline and Closing the Capital Raise

21:20 Crafting a Cohesive Capital Raising Narrative

23:47 Avoiding Over-Engineering the Deal and Focusing on Operations

25:46 Reaching Out to Investors and Creating Momentum

28:26 Attracting Investors for Niche Businesses

31:13 Creating Urgency and Closing the Capital Raise

34:41 Coaching Blue Collar Operators in Raising Capital

36:40 Transparency and Timelines in the Capital Raise

38:31 MainShares' Approach to Growing the Investor Network

40:51 Working with a Broker Dealer

43:04 Compensation for Referrals 44:14 Raising Capital with Debt or Equity

45:44 The Rise of All Equity Deals