donshouse
Posts: 2
Joined: 4/7/2010
Status: offline
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What a great question.. Let me first say that I'm direct to a pool of investors, and that's what we specialize in is introducing funding opportunities to "legitimant Investors". I wanted to disclose that right up front. There are so many scams out there today, so you have to do your own du diligence when trying to find a reputable company to work with. I talk to so many people on a daily basis saying they have been scammed.
Let me start off by saying, wouldn't you agree that the big investors out there with deep pockets, are "not" on web sites like this one looking for there next investment opportunity? I would say 97% of them are not. Why, it is because they start a investor relationship with firms that specialize in bringing the investment opportunity directly to them. These firms do all the leg work and screen the companies or individuals looking for funding and once we find the solid ones, we showcase there investment opportunty to our investors. They don't want to waist there time looking for them, they want to work directly with a group to bring them solid deals. Do you have a chance to find that needle in the haystack, that's a legiment investor on here? Absolutely, but they are far, and far inbetween.
Now lets talk about the next topic, of up front fee's. Should you work with a company that requires up front fee's? Almost all requests I look at have executive summories. Some look very professional and some needless to say look like chicken scratch. Wouldn't you agree these executive summories are built by the companies or individuals seeking funding? Well of course. But wouldn't you also agree, these summories can easily be construed to make the numbers better than they actually are? Absolutely and it's only natural. I would do the same thing, who wouldn't. The key is to have a "Independant 3rd party" source make a IR packet" so when the investor looks at your company, it's going to state the positives and negatives of your project. They may be some things that may come up during this process that they find, that can easily be fixed or change to make your project look evan that much more attractive to a investor.
So how much "up front" fee's are justifiable? Great question. To do a top quality IR packet your looking at 30 to 40 man or women hours of work. So you figure out what is just is justifiable, and most of the time, that will also include underwriting the project for investors to review as well.
I have heard from anywhere from $ 2,500 all they way up to $ 30,000 is what Firms charge for this. I think if you find a Firm that charges $ 2,500 to $ 5,000 you are getting a good deal, but be sure to ask what does that fee include? I hope it's a IR packet and also the underwriting of it. In my opinion once you get up to $ 6,000 plus they are scam companies and are trying to make money on this service and not truely trying to get your project funded. They say they are,but it's just a tatic. They are in the business to profit off of this, and not truely working hard to get your project funded. They are making the money on the front end, and not making it on the back end with bringing the business and investor together for a successful close. Which should be the number one goal of any legit funding company. I just want to say "that is my opinion, and my opinion only".
Compaire it to if you where to sell your home. Would you try to sell it all by yourself? Or would you use a realtor who "specializes" in selling your home, and has a network of people or other realtors with clients looking for you?
Hopefully I brought some good insight and gave you some direction when your looking for that investor. :)-
Good luck
Monty Torper
Platinum Direct Capital Group
763 639-5671
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What do you think about business brokers? - 
