Equity financing often takes the form of an "Initial Public Offering" or a brokered private placement for companies already with a stock exchange listing. For private companies our team can source the appropriate private equity financing. FirstAccess may get involved in selected opportunities on the public market place though a Reverse Take-Over concurrent with a private placement of securities.
Anti-Dilutive Equity Financing
-This type of equity financing applies to growth companies with established products or markets. They may be private or public. Its main characteristic is that it has a debt component with a relative high coupon (11% to 14%) and an equity component which can take several forms (e.g. warrants to buy common stock, or the right to convert a debt, or preferred stock into common stock). The principal needs not to be amortized, and in occasions even the interest may be deferred.
-This type of financing is appropriate for growth companies with positive cash flows, when the collateral is not enough and you need to look at the enterprise value and beyond the book value of the corporation. Its main advantage is that compared to straight equity financing it dilutes the owners position only 15% to 25% to what straight equity financing would.
-Generally the company must have good operating track record, strong management with an equity stake, excellent growth prospects and a viable exit strategy in the future.
-The financial test are generally interest coverage and net worth maintenance only.
-Given this parameters typically there are no other financial test, and it closes within thirty days.