The Facts & Stats on Business Equity Financing You May Not Know…
The Future of Business Equity Financing
Businesses, entrepreneurs and commercial real estate developers all seek equity financing on terms they can live with – historically, the equivalent of seeking the Holy Grail. The odds of success may be as high as 50:1 or even higher of obtaining equity capital from a venture capital fund, private equity fund or angel investor. Accordingly, the demands for ownership would be reasonably expected to be very high due to the narrow market opportunity and comparatively huge demand focused on the narrow/small supply base.
The probability of a successful capital financing outcome for businesses that are small or medium-sized issuers can be equally daunting in the credit markets. The probability of a successful outcome in obtaining a loan from a large commercial bank is approximately 1 in 7.35, 1 in 5.41 for a local bank, and 1 in 4.63 from a credit union. The SBA claims that 82% of all loan applications are approved, but less than 50% of that pool receive any funds (much less the original capital amount requested) – that reduces the odds to about 1 in 2.44 of getting SOMETHING, if you also have up to 20% equity capital. Once again, the equity financing is the key. So where do you find that elusive equity financing?
New Regulations Make for Better Odds
The November 2020 SEC rule change (see Final Rule Release No. 33-10884 on sec.gov) created a new series of pathways for businesses seeking to obtain equity financing that provide a higher probability of success than could be previously thought practical.
Impact Focused Promotion in Advance of Offering Election…
The new rules allow for a combination of virtual investor presentations to be made in a public (i.e.: mass advertised) forum to attract capital, pre-offering public advertising that allows for efficient pre-screening and qualification of investors, and new limits on crowdfunding that create the opportunity for virtual public offerings (with the attending odds of probability of success) that don’t have to include the huge dilution requirements that come with angel investors and private capital sources of equity financing.
Overview of Accelerator Program Key Points
Find out how to make these odds work ever in your favor. Talk to the capital markets experts about the INVIZEN Capital Finance Business Accelerator Program.