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[quote]QUOTE: Originally posted by tormadel [quote]QUOTE: Originally posted by Limitedclear [quote]QUOTE: Originally posted by MP173 Ed: my only problem with this is that $10 million is being raised with on $1.2 million invested. I would be very leary of this, until I knew more of what was going to be happening with the $8.8 million. Just think of it this way....88 cents of every dollar would not be invested in this shortline. ed [/quote] ed - If I was going to make an offering of this type, which I am NOT, there would be a complete set of financials and pro formas looking forward five years. Part of that would explain the need for working capital, capital investment on the existing property to bring it up to a usable state and other capital investment in equipment (if any) that would be necessary to convert partially unused and deferred maintenance track into a healthy short line... I chose the $10,000/share number to ensure my potential investors realized they would have real skin in the game and were willing to take such a risk. I have found that it is much easier to raise a LOT of capital than a little so long as the plan is sound. The $10,000,000 raise amount is larger than I would expect and in any event there are several legal and corporate reasons I would never do a real deal this way as it would require a public offering and all the headaches inherent in such a structure. As I have said above I would leave the financial structure open for now to make additional adjustments possible. So far, no one has suggested such an adjustment. LC [/quote] Well I had not gone there yet but I would suggest a Limited Liability Corp orgainization rather then a standard corp. Would be much easier to deal with, but could restrict the number of investors you might have. But then again it's likely that anyone willing to invest that much may want to invest alot to have more say. [/quote] True, I could and probably would use an LLC to avoid some of the limitations. Unfortunately, that won't solve all of the possible issues. What particular corporate form I would use depends upon how I would finance the deal. There are other possible financial and corporate structures for this sort of thing which make sense too, but I can't give away ALL my secrets... LC
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