Archive for December, 2013

Finally the holly grail for US. based company project funding

December 12, 2013

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We are interested in US. domestic projects of most any size.  We are project type “agnostic”.

 

We are interested in a project that is market disruptive & brought by a stellar project management team, we would appreciate an opportunity to evaluate it.

 

we have a few thousand investors & lenders now and each has their own parameters.  We can look at projects as low as a few hundred thousand dollars – and smaller if factoring is involved.  Our largest project was $4.8 Billion, so, “the sky’s the beginning” on size.
 

We have found that many projects, especially developments, do not have the “skin in the game” to qualify for a straight debt piece in today’s economy, and, we have found that most often we have to also bring in a sizable equity piece to match the debt piece.  Since we have a mixture of both Private Equity (PE) investors and debt sources in almost each industry class, we can manage to match up the two pieces and create a total funding solution.

 

Projects that require factoring are usually fast – often just a few days.  Projects that qualify for a debt only piece take 60 to 90 days generally, and projects that require an equity piece (with or without a debt piece) require much longer as there are a plethora of securities laws, rules, and regulations with which compliance is necessary.

 

“No upfront fee” sources do carry a “catch 22” of course.  They are generally more opportunistic and seeking very “sexy” projects with a lot of “free equity” and/or a market disruptive nature. 

 

Basically, someone has to cover the significant costs of due diligence & underwriting.  If it is going to be the funding source itself, they have to be motivated to spend their own dollars to perform these important and necessary steps.

 

Of course, when real estate is involved, third party costs may still be necessary, such as “as completed appraisals”, surveys, title searches, etc., however those cost should be expected.

 

If a project is insufficiently impressive as per the above, there are other solutions that do require fees, of course.

 

Keep in mind that we are by no means limited to real estate based projects.  Many of our clients are in various capital intensive industries which have nothing to do with real estate.  Technology, biotech, inventions, media (there are fees associated with any and all entertainment projects – those are the absolutely most difficult to fund of ALL industry types and costs are unavoidable), new drugs, internet based businesses, etc., minerals & mining, Oil & Gas projects, etc. 

 

These project types are almost always funded via pure equity, and, we have investors in just about every industry category interested in world-class projects.

 

The biographical information on the project principals is of the utmost importance.  A company with clear goals and a stellar management team with industry experience is paramount for a project to attract “no upfront fee” funding solutions.  The“personality” of the management team is also of significance.