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Most people know about the listing and trading of stocks on various stock exchanges like the New York Stock Exchange, the American Stock Exchange, and for smaller public companies via "over the counter" (OTC). Most people also know of the ability of public companies to raise investor capital via the sale of their stock to individual and institutional investors through stock offerings. Many private companies raise capital and become publicly listed on a trading exchange every year by "going public" or completing an Initial Public Offering and full registration with the SEC. What many companies do not realize is that the Securities and Exchange Commission has programs that allow private companies the ability to raise capital in the very same manner - without becoming a publicly listed company and without having to complete a full registration with the SEC (a time consuming and expensive task).

"Regulation D" is an exemption under the Securities Act of 1933, instituted in 1982, that allows private companies the ability to raise capital though the sale of securities, typically their common or preferred stock, without being subjected to the expensive and arduous SEC registration process that publicly reporting companies must complete. These Regulation D private stock offerings can be prepared quickly and for minimal cost making them very attractive to growing private companies that need investor capital but are not ready for a full IPO.

The Regulation D programs are typically called "Direct Public Offerings" because the stock being sold, while privately held, is being offered "directly" to the public by the subject company. The DPO programs were designed for small business and are therefore less complex than a fully registered Initial Public Offering but retain the same core benefits of an IPO. Most companies that use the DPO programs typically issue (or sell) between 10-30% of the company's share capital - depending on whether it is a first round funding or later stage funding and the amount of capital being raised through the offering. The company principals retain control over the majority of the issued shares and thus retain control over the company. Investors receive a return based on the performance of the company and the amount of shares they own.

 

There are three primary SEC Regulation D exempt programs that Capital X Ventures offers to its client companies; the Regulation D 504 Offering, Regulation D 506 Offering, and the Small Corporate Offering Registration ("SCOR") Offering. Determining which program best suits your company is based primarily on transaction size:

Regulation D 504 Offering: allows companies to raise up to a maximum of $1,000,000 in a 12 month period. The 504 is the least restrictive of the Regulation D programs regarding structure and disclosure. The 504 is the most popular and widely used of the Regulation D programs.

Regulation D 506 Offering: allows companies to raise capital through the sale of securities with no principal amount cap per 12 months. The 506 program provides an exemption for limited offers and sales of securities without regard to the dollar amount of the offering. Most companies use the 506 program to raise amounts from $1,000,000 up to $10,000,000.

Small Corporate Offering Registration ("SCOR") Offering: The SCOR is a more sophisticated version of the 504 offering. The SCOR offering provides a standardized disclosure format that is accepted by 43 States and allows increased freedom of solicitation and advertising over the standard Regulation D 504 exempt program. The standardized disclosure format (the U-7 form) also allows the company to comply with a large number of individual States securities laws utilizing one regional review instead of presenting the company's offering materials to each individual State regulator for review. The SCOR does require audited financial statements for the past 2 fiscal years for offerings exceeding $500,000 and has a maximum 12 month cap of $1,000,000

  Equity Seekers
  Opportunity Seekers
  Investor Services  
  Mergers & Acquisitions
  Projects  


Equity Seekers:
Companies who seek potential investors for their respective company or projects. At Capital X Ventures, we focus on raising capital for businesses with strong management team and lucrative products/services. Our concentration surrounds Regulated D, click here for more details.
 
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Opportunity Seekers:
Due to the increase of layoffs and downsizing many experience indiviuals are out of work and of course the job market is not producing additional career jobs soon enough.  This is one of the reason Capital X has stepped out as one of the first venture capital companies to step up with a solution.  The opportunity seeker are individuals who look to partnership within a potential company.  The partner (s) are working partners.  This section matches individuals together to form or expand a business concept.  The particular cash injections depends on the partners after they form.
 
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Investor Services  :
Regulatory D Services  (Matching the right investors with the right companies)  

Capital X Ventures provides its clients with the ability to prepare and implement a Regulation D Offering easily, efficiently, and effectively. Our customers enjoy a unique combination of advantages when using Capital X Ventures: a cost effective method of preparing a Regulation D Offering married with expert support, guidance, and advice for the proper and effective implementation of the programs. We are the only firm that offers this unique combination of cost effectiveness and sophisticated support and guidance.

We deliver much of our services matrix through a separate section of our website. This sophisticated "Registered Users Website" and our personalized Offering Support Service combine to provide our customers with an efficient and effective method of preparing and executing a Regulation D Offering. Our customers receive a username and password which allows them to access the Registered Users Website at any time to work on their offering or utilize the resources contained within the site.

While the Registered Users Website is highly integrated and informational, we realize that our clients will have a need for personalized support during the structuring and placement of their offering. Thus, Capital X Ventures offers its clients customized support, via a telephone support line or e-mail, that is staffed by knowledgeable securities specialists to answer any questions you may have during the structuring and utilization of these SEC programs. The support service is included in the registration fee and is active for the duration of the client company's securities offering.

Private Placement

A private placement memorandum (PPM) is the document that discloses everything the investor needs to know to make an informed investment decision. This includes: the offering structure, the share structure of the company, SEC disclosures about the shares being purchased, company information, information on company operations, risks involved with the investment, management information, use of proceeds, information on certain transactions that could affect the investor, and investor suitability data. The PPM also includes the subscription agreement which is the actual "sales contract" for the shares of stock. This is the document that the investor will sign and send in with their investment funds.

The PPM is very important because it provides the investor with all of the prescribed data they will need to make an investment decision and includes the actual documentation to effect the investment transaction. PPM's are designed as a stand-alone document - meaning that there need not be other information presented to the investor for them to make an accurate investment decision. Many companies will attach their business plans to the PPM as supporting documentation. This is an acceptable practice so long as the information in the business plan properly corresponds with the information in the PPM and that the investor is made aware that the business plan alone does not constitute an offer to sell securities - only the PPM can make that offer.
 
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Mergers & Acquisitions:

Mergers and Acquisitions are often the most profitable and efficient strategies for company expansion. Capital X’s substantial deal flow and seasoned analysts are the keys to our ability to identify truly synergistic M&A opportunities for our clients. Many years of experience enables Capital X to guide our clients through the entire M&A process including, due diligence, valuations, terms negotiations and closing. If you are interested in discussing an M&A strategy for your company. Contact us to discuss your company plans.


 
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Projects  :

This service is used whereas our client need bonding service or financial services on large projects that has been awarded to their company.  Capital X assist that client in obtaining the necessary finance to complete the deal effectively.


 
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