FUNDING RESOURCES: Internet Public Offering

		Bank Factoring Investor Angels Joint Ventures Public Funding Public Internet Offering Public Offering Public Shell Small Companies Offering Registration Venture Capital Venture Consultants Venture Leasing

The Internet now provides a medium to cut out much of the function of the intermediaries in public offerings. Offerings can be brought to the public's attention at very little cost. Offering memorandums and prospectuses can be transmitted at a fraction of the cost of paper medium, and stock can be traded without the help of stockbrokers. The Internet can also be used to conduct stockholder public relations.

How It Works: A company puts up a web site or works with a company like Whit Capital, which took Spring Street Beer public on the Internet, to develop a web site soliciting potential investors. The same information found in a prospectus is found on the web prospectus. The money is sent to a bank, which works as the transfer agent.

Preparation Expectations: The following list of necessary information is provided by the Merger Exchange Network (4189 Bellaire Boulevard Suite 262, Houston, Texas 77025 USA, 713-667-2868, 713-661-7369, e-mail: mergers@w5.com).

1. Decide on the company's business objectives and how much capital you will require to get there.

2. Prepare a thorough business plan. There is still no substitute for your company's good story.

3. Research and decide on the best route for the company to go public.

4. Decide which part of the work can be done internally and which part will require outside professionals. Interview and engage the required professionals. There are a growing number of consultants, stockbrokers, lawyers, and accountants specializing in offerings by small and medium companies. Be sure to assign specific tasks and agree to specific fees.

5. Decide on management's strategy for company's public offering. How will the company publicize the offering and distribute the offering document? How will the stock trades after the offering? How will the management increase the value of the stock over time? Management will need clear answers to guide your own actions, to answer the questions of the regulators, and to be part of the story management tells potential investors.

6. Perform due diligence if necessary (for example, if the company is acquiring a public shell company).

7. File the appropriate documents and obtain the appropriate approvals.

8. Take the offering to the public. A web page can tell the company's story through an on-line prospectus. For some offerings management might be able to sell the stock directly to customers, while in other cases management may need to or want to work with a stockbroker. In management's strategy management may have determined that it will require promotion in other media as well.

9. Once the stock is sold, management must make sure there is an after-market for the shares. Liquidity creates value. Most companies with assets less than $4 million will start out trading on the OTC bulletin board or small exchanges like the Pacific Stock Exchange. These stocks are not listed in the newspaper and usually do not trade very often unless they have good public relations and active market makers (stockbrokers). The Internet is an excellent medium for public relations. Management must be sure the public learns of every piece of good news about the company.

10. Obtaining a NASDAQ listing is the best way to increase the value of the company's stock. Everyone is looking through the listings in the Wall Street Journal for the next Microsoft. Jumping from the OTC bulletin board to NASDAQ requires $4 million in assets, $2 million in net assets, and 300 shareholders. Management may be able to get to that level more quickly by acquiring other businesses. Since the company is now public management can often use company stock instead of cash to acquire other assets.

Advantages: The same benefits as going public conventionally, except the cost is significantly less.

Disadvantages: Many of the same problems as going public conventionally.

How To Keep Them Happy: Many company investors are already familiar with the Internet, so develop a web site and keep investors informed through daily or weekly updates, plus posting quarterly financial news.

Internet Address: www.prestigeipo.com tells you how to raise money through a public offering on the Internet.