Seeking feedback on Raising Investor $ Strategy & Structure

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Seeking feedback on Raising Investor $ Strategy

- Strategy Source: https://tinyurl.com/ccorpfunds

- Begin @ ~7:55 for full context (quick video, summary below)

Questions:

1. Has anyone done this successfully, or something similar, to season bank funds?

2. How would you structure paying Pref Equity of 120% of investor equity over time?

My Summary of the Raising Investor $ Strategy & Structure:

1. Create C-Corp to Raise & SEASON funds (at least 2 bank cycles before purchase)

- keep any single investor at <20% valuation on raise

2. Acquire at a higher (example is 2x) EV than raise

- this ideally returns investor $ in deal back at close!

3. Structure capital stack based on Working Capital peg

- this keeps everyone on the same page regarding having enough cash for a healthy business & plan

4. Guaranteed Payment to Operator based on WC peg

- Operator gets Guaranteed Payment before Preferred Equity ... if maintains the WC peg

- the GP accrues if not

5. Preferred Equity 120%

- Remember: this is based on already returning investor $ in deal + any interest

- return via Preferred Equity at 120% on their $

6. Parri Passu common equity