The past 6 months...

[RyanG]

Last time I was on here I was posting about a few projects I had going. As you all know very well, things never go exactly as you plan. The experiences were a huge opportunity to make great contacts and move forward with a real plan...

I'm now in the early development stages of starting a business with a partner. The business is AP, we're financial liaisons for films, products, expansion capital, & venture/start-up capital. We acquire clients and deals through networking, do all the ground work that no one else wants to do, and act as a liaison between the money and the CEO or film maker. Right now we are conducting business full time, have about 10-13 deals in the pipeline, only one very small deal closed. Upon closing we take a percentage from both parties..

Plan is to keep bustin our a$$ until we close the first one and then we'll have some breathing room and capital to turn it into a full strategical legal entity with a specific "virtual executive" model that we're working on, which has almost no expenses and all profit. We also plan to negotiate equity in our fees - so long term plan is to close deals and live off the residual income from owning equity in the companies & films all over the world.

Open to any thoughts, advice, criticism, or interest in what were doing. Thanks

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[Darkside]

I would charge higher fees rather than take equity in those companies. For one thing, those companies might not turn out to be successful which makes your equity stake useless.

And, even the successful ones bring issues since you have to waste valuable time keeping track of them and their finances to make sure that you receive your fair share, which means going through their books, etc.

It's better to just get a large chunk upfront and move on, repeating the process with more companies.

 

[petethepeddler]

It's better to just get a large chunk upfront and move on, repeating the process with more companies.

I respectfully disagree.

If you know who you are working with you should be able to determine whether the risk is acceptable. If it is, then taking an equity stake in the company is more than worth it. If not, then charge the upfront fee.

Business is risky. If you want to get the highest returns you need to take risks.

Not all of your companies are going to do well, but I'd rather have a 1-10% of equity stake in a company that nets a million dollars a year, than a flat upfront fee.

As long as your agreements are in good shape, I'd say you have a decent business model. Keep up the good work.

 

[RyanG]

-Darkside, thanks for the reply! It's actually done on top of the fee, compounded. We have our finders fee on the loan/investment amount and a couple percent equity on top of that.

We don't choose to take on a client seriously without out looking at the books and potential of the company's future first. When we work to secure financing for someone, we plan to have a long term relationship with that client. More like a VC business model then a broker, thats why we make sure to call our selves financial liaisons instead.

-Pete, we are thinking the same way. The upfront fees are great as compensation, but the equity is what is going to give us financial freedom.

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[BillyShears]

Ryan -
Here's some advice . . . (maybe you've done this) You should familiarize yourself with California & federal securities laws. From your description in this thread, I believe that the work you're doing (as AP) would require a securities license (ie. Series 7/63) or registration with the state as an investment advisor. I don't think there's a legal way to be a "finder" or "liason" in California.

I'd start by looking up how the state defines "securities" and then find out what's required in terms of licensing from the Securities Regulation Division (CORP :: Securities Regulation Division)

I think you have a lot of good ideas and I'd hate to see a young guy get popped for securities violations/fraud.

 

[RyanG]

Billy, I appreciate the post man, good looking out. We are aware of these things and have educated ourselves on them thoroughly. It's always good to get good advice & support though brotha, thanks =)

 

[RyanG]

For anyone with any interest in what I'm doing, shoot me a PM or an email rgill50@gmail.com with:

-Who you are and what you do
-What the nature of your interest is
-Any questions

and I will get back to you with a one sheeter so we can talk business. Cheers

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.