$1,000,000 ($1 Million) Positive Financial Criteria Example - Integrity Computation

A = Offering Entity       SI = Shareholder-Investor

Goal: Profit for All Parties

1) Goal Number One: Raise $1 Million with 1Million Total Entity Shares for SI and A

2) SI: 400,000 Shares @ $2.50 = $1,000,000 Raised

3) SI: 400,000 Shares   A: 600,000 Shares = 1 Million Entity Shares @ $1 Share = $1,000,000

4) $2.50 SI Shares revert to $1 Shares because A owns 60% of Entity Shares

5) Goal Number Two: SI (Shareholder-Investor) require minimum Return on Investment (ROI)

6) SI Minimum ROI = $2.50 Share X 2 = $5 Share X 1 Million Shares = $5 Million Entity Share Price Value

7) Entity Ideal Share Value 5 Years Goal = $7.50 or more.

8) All 1 Million Shares Total Entity Value 5 Years Goal $5 Million - $10M

8) A - 5 Year Goal  60% Share = $3 Million - $6 Million

9) SI - 5 Year Goal 40% Share = $2 Million - $4 Million   

Few products and services can produce ROI returns that will attract angel investors or venture capitalists. Most require a 200% five year annual ROI.

There are industries as agriculture and real estate that will attract investors with 100% five year annual ROI. With above example the share value-distribution total is 400% or 5 X original Entity share price of one dollar.

Most venture capitalist require an Entity to have product/service commercialization and a marketing record.

There are many situations when an established Entity with adequate assets and cash flow that additional shares can be offered.

Entity management must observe the significant criteria of operating with OPM (other people's money i.e. SI Shareholder-Investors).

Ken Wheeler

M&A-IB Consultant