The Beacon Model© of Corporate Finance through Public Funding Places Early-stage Companies on the TSX-V and NY Stock Markets
Learn about the Unprecedented Advantages for Startup Ventures
Investors, entrepreneurs and communities compare BrightChange Ecosystem’s Unprecedented Advantages with the Traditional VC Model.
Like a star with many points of light, the Beacon Model© developed by Beacon Investment Partners, LLC, (BIP, Beacon) in the U.S. serves many interconnected purposes. Up close, these objectives take on added importance in the context of decimated funding for venture capital funds.
The novel Beacon Model© of corporate finance (exemplified in the Virtuous Circle©) utilizes existing SEC regulatory procedures and regulated practices of the Toronto and the New York Stock Exchanges to place high-quality start-up and early-stage companies on those exchanges. Listing on the Toronto exchange can come within months of the venture team’s initial contact with BrightChange’s Executive Service TaskForce (BEST Advisors).
By using SEC procedure to make multiple subsequent stock offerings, while trading on the Toronto Stock Exchange – Venture (TSX-V), and therefore having at least one analyst, an early-stage company can more aggressively mimic the staged capital funding that has been the established pattern of private venture capital investment partnerships for over 50 years. At the same time, it can also achieve far higher company valuations and that implies less dilution to company founders and seed investors. That unique advantage will attract a steady flow of experienced entrepreneurs and world-class deals to Beacon’s aiWeek Media deal portal.
Interlisting on a U.S. exchange occurs when a full-blown S-1 stock offering (NYSE or NASDAQ stock exchange IPO) is made when ground floor investors elect to exercise the Equal Opportunity IPO (EO-IPO) allocation right in their Unit.
The Beacon organization offers institutional investors and the public/retail investor, high-quality deal flow through the unique opportunity to invest in a pair of publicly traded (NYSE) Business Development Companies (BDCs), which will be regulated by the U.S. Investment Company Act of 1940. The BDC portfolio is designed to include structured loans and investments in value stocks as well as investments in the growth stocks of startups and early-stage companies. The Beacon BDCs will aim to optimize yields for its long-term public investors seeking a “margin of safety” (yield plus growth) in their investments.
Public Investors in Venture Capital Deals
The growth feature of the BDC portfolio will derive from investments in start-up and early-stage high tech, high growth clients. The opportunity for communities and the public to make early stock purchases in high-quality start-ups at relatively low prices is attractive for its own sake; all the more so when stock purchasers are also linked to a so-called “equal opportunity” right that guarantees IPO first-trading-day share allocation rights to all early investors in Common stock shares – a pioneering feature of the Beacon Model©. News of these ground-floor situations will be available for viewing at the many-featured new aiWeek.com site. Public participation will greatly leverage the investments of Beacon-managed BDCs and of those Business Angels who elect to enroll in the BrightChange Executive Service Taskforce (BEST Advisors) Academy of mentors to entrepreneurs.
Job creation is the inevitable result of new company formation. Its importance in the current worldwide economic recession cannot be overstated. Economic development with public support (retail investors, cities and towns) in both the U.S. and in emerging countries is the overarching process that will shape the future of global progress. By attracting a venture they have researched in depth on aiWeek, civic-minded local groups can bootstrap communities in “free states” without either shredding their local tax base or breaching GATT Uruguay Round Rules.
Job creation enables the rationale of the Beacon organization and the Beacon Model©.
Invention and Innovation
Invention and innovation are the quintessential foundations of economic growth. Technological development is accelerated and its usefulness realized in the Beacon Model© of commercializing discovery. Advantages of this Beacon Model© of public capital formation are most striking in opportunities where “disruptive” intellectual breakthroughs can be optimally positioned to acquire private companies who can clearly perceive both the new threat and the opportunity for a liquidity event for their equity despite those companies already having established customers, experienced management, sales and earnings in the commercial marketplace.
Entrepreneurship in Early-stage Companies
Gaining access to public securities markets for early-stage capital has been the Achilles heal of the worldwide entrepreneurial movement. Regrettably, failure to mentor young firms adequately has exacerbated the problem of there being altogether too many firms in the private Venture Capital industry today. VC funds raised over $110 Billion in 2000 – ten times what the manage to raise now. Hundreds of venture capital limited partnership funds (VCs) are now winding down, and in the process, abandoning thousands of client entrepreneurs who will not be exiting via an IPO.
As New York Stock Exchange (NYSE) listed BDCs, clients of Beacon-managed BDCs will have the benefit of BDC permanency versus the ten-year life, limited partnership model of private venture capital funds. Furthermore, the Beacon Model© is based upon extensive due diligence, nurturing and coaching for increased chance of success for start-up and early-stage clients of Beacon. Under the Investment Company Act of 1940, this mentoring and other assistance will be the responsibility of BIP and the associated not-for-profit BrightChange Executive Service Taskforce (BEST Advisors) comprised of seasoned business angels, entrepreneurs and distinguished expert advisors.
Look for Beacon’s promising new Business Development Company (BDC) IPOs on the NYSE, and look to access its resources if you are in early-stage entrepreneur. This unique Beacon Model© featuring efficient access to evergreen international public finance, world-class advice and the global visibility thanks to both aiWeek Media and Canadian stock analysts will “light the way to make ingenuity pay.”
© BIP December 19, 2009; updated July 16, 2013
About the Authors
Vincent A. Fulmer is a co-founder of the M.I.T. Enterprise Forum and a member of its Executive Board. He is a nationally recognized advocate of entrepreneurship.
George W. Beard is Managing Member of Beacon Investment Partners, LLC (Delaware, USA) and founder and CEO of KeepTrack USA. KeepTrack is a development-stage physical cargo security and supply chain IT firm. KeepTrack features a portable Katie Bar® internal locking platform for containers which securely incorporates patented sensing and imaging while offering every innovator an “open” standard, “plug-and-play” bus and an open application programming interface (API).