Wealth Management

Voted #6 on Top 100 Family Business influencer on Wealth, Legacy, Finance and Investments: Jacoline Loewen My Amazon Authors' page Twitter:@ jacolineloewen Linkedin: Jacoline Loewen Profile

January 26, 2010

What do you think of upfront fees?

The Private equity and Venture Capital Group has been running the longest discussion on Linkedin on the hot topic of paying up front fees for capital raises.
Here is one comment that caught my eye"
I've worked with the CEO's and BOD's of many companies in their efforts to raise series A, B, or C capital. The issue of upfront fees normally arises when efforts to raise angel or VC funds have been exhausted and companies reach out to the alternative capital markets. As we all know during the last 18 months the traditional sources of capital have become scarce.In the alternative capital markets, it is common practice for the investment finders to charge upfront fees and generally these are large sums before beginning any work.

That being said, I have recently, through close long-term contacts in the VC industry, been introduced to an investment capital finder who does a great job raising capital and unlike investment capital companies like Bain, Goldman and others who charge large upfront fees. Loewen & Partners does not. 
Rather they  take a strategic partnership approach with company CEO's who have a business model they think can be executed successfully by charging a modest monthly cost share during the capital raise period. They don't want to make money on the front end but rather taking a strategic partnership approach with their clients, money is made on the back end of the deal when the capital closes escrow.
Loewen & Partners' business model makes complete sense to me as a outsider and business person. They have some skin in the game utilizing staff to zero in on sources of capital that would be a good match with the entrepreneur's business model. And with the cost share model , the entrepreneur has skin in the game preventing him/her from window shopping for money and then just walking away when the capital sources are brought to the table to negotiate the terms sheet. 
In my opinion, If you can find a similar capital finder who will do a cost share approach during the raising period, rather than charge large up front fees, you will have a win/win approach in raising your capital needs.

2 comments:

Unknown said...

The ultimate business solution. The ability to cut the cost of any business expense, or just plain invest.

Developed multiple arbitrages for the financial markets. Arbitrages that produce over 30 percent a year.

Arbitrage is not only possible, but in abundance. Just that people are told and taught that it is impossible. No risk has been in front of all, but not seen.

I'm interested in selling, or partnering to sell, or partner in a business that uses my arbitrage.

Athenpro.com is in the building stage.

Thomas Adair
HolyGrailToInvesting@hotmail.com

Anonymous said...

[url=http://seghan.ru/go.php?sid=35][img]http://i066.radikal.ru/1001/38/f22daff34e6d.jpg[/img][/url]












[url=http://ubpscsn.pro.ac/sitemap.html]buying cigarettes online how to [/url]
cigarettes no tar buy order cigarette buying cigarettes over the internet
[url=http://botziho.485.at/]how to order cigarettes online [/url]
best places to buy cigarettes buying cigarettes in belgium buy philip morris cigarettes
[url=http://tioozua.connection24.de/]cigarette bulk buy [/url]
marlboro cigarettes buy now pay later age for buying cigarettes smoking years buy newport cigarettes online
[url=http://powjxun.wieder-mal.de/sitemap.html]buy barclay cigarettes still available [/url]
order cigarettes from egypt buy cigarette case buy camel crush cigarettes
[url=http://ubpscsn.pro.ac/]nicotine free cigarettes buy [/url]
ordering cigarettes online legal clinton executive orders against cigarette smoking age to buy cigarettes in california
[url=http://uvfaquc.akzentuiert.de/]buy ultra buy cigarettes [/url]
candy cigarettes where to buy marlboro cigarettes buy forums buy cigarettes online
[url=http://qzexaua.flackert.de/]latvia cigarettes mail order [/url]
buy gauloise cigarettes buy cigarette tips buying cheap cigarettes in the usa
[url=http://cauvzah.weinend.de/sitemap.html]money problems with buying cigarettes [/url]
buy bulk cigarettes buy cigarettes virginia age buy cigarettes
[url=http://qzexaua.flackert.de/sitemap.html]buy cigarette marlboro online [/url]
wholesale cigarettes money order uk law on buying cigarettes how old to buy cigarettes
[url=http://ubpscsn.pro.ac/]buy cigarettes under 18 [/url]
buy us cigarettes online buy cheap cherry dreams cigarettes place to buy cheap cigarettes