We have all heard the horror stories of people who were burnt by capital brokers or finders in their bid to raise well-needed capital; this is not one of those stories. This article is about a funding advisory firm, Alexander Miller & Company, who delivered exceptional and speedy capital procurement services, during a recessed economy, in a professional, transparent, and competent manner, which renewed the confidence of our company in using this or any other reputable funding intermediary when seeking funding.
Our company, Peter Abby Enterprises, Inc., is a 16-employee services corporation startup located in Tampa Florida. In January 2009, the company embarked on a fundraising campaign to raise its first wave of series funding of Million, an amount representing a 40% stake in the company.
We knew from the outset the type of investors we were seeking, those who have financial capital, technical skills, and industry connections to offer. We also knew the cost we were willing to pay for this investment, our desired period for the investment, and our preferred investor exit strategy. Added to this, we needed the investment in place within four months.
It became apparent early in our search that our main challenge in obtaining our funding would be to find qualified investors within the constraints of a global financial crisis. Nevertheless, we were not overwhelmed. To overcome this obstacle and ensure our success, we casted a global net by enlisting colleagues, friends, families, suppliers, current investors, and well-wishers worldwide in helping us in our investor search. However, everywhere and in every country we looked, we came up empty handed. It was an extensive, elaborate, an exhausting search that got us nowhere.
At this point, we decided to include in our overall strategy the services of funding intermediaries. The actions (as reported through the horror stories told by former clients) of some intermediaries however, have placed a negative reputation on the capital brokerage industry. Because of this reputation, we sought to minimize or eliminate any potential exposure to losses by establishing a few ground rules in dealing with intermediaries. Chief among these rules were 1) our unwillingness to pay ANY upfront finders fees; 2) our unwillingness to sign an exclusive finder's agreement; 3) our unwillingness to pay any more than the equivalent of ten percent of the source capital in finder's fees; and, 4) intermediaries must source the funds within ninety days or the deal is off. These rules must be agreed to as-is without exception by all intermediaries before we could proceed.
Our established rules serve us well, as we encountered countless brokers, funding consultants and the like, who made promises of supplying investors' funds only after they first receive a hefty retainer. No upfront retainer would be paid by us however, as this would violate our established rules.
Through the Venture Capital Group on the Linkedin network, we received information from group members on a funding advisory firm by the name of Alexander Miller & Company. This firm, we were told, charges no upfront finder's fees, has a network of over 2,000 active investors, has a clientele that is over 98% funded (even throughout a challenging economy), closes their deals within 90 days, and provides advice and support throughout the entire funding process. However, we were also told that their finder's fees are on the high end of the spectrum and they are selective in their choice of clients. Moreover, we also learnt through additional investigations that it pays to be well prepared before entering into an arrangement with them as their fees to prepare any funding document, requested by investors, are on the high-end. These document preparation fees, we understand, must be paid in two-parts, 60% before the document is prepared, and 40% after the document's preparation. Several former clients whom we spoke with, told us that the firm's document preparation fees are well justified as the accuracy, precision, and speed in which each document is crafted is unmatched and their documents are readily accepted without questions by investors. With this kind of referral from former clients, we were half sold but still skeptical.
We first made contact with Alexander Miller & Company through an introduction on the Accredited Investors Network Group on the Linkedin network in which we solicit their opinion on our funding project after first sending them our executive summary. After first giving us their opinion, which was inspiring, encouraging and motivating, they invited us to apply to their online investor network, which we did. In reviewing our application, they asked us to submit our business plan and financials in order to complete the application process (here, it should be noted that they refuse to sign a non-disclosure agreement). This we did and, after an informative meeting with them, they allowed us temporary, but full, access to their network pending our acceptance of the term of their finder's agreement.
On logging on to their investor network, we immediately realized the uniqueness of it. Their network was investor-dominated territory that was a combination of a "Gobig" Network, an Angel Network, and an advisory network. We were extremely impressed with the way our investment offering was being presented to investors. Alexander Miller & Company analyzed our business concept, financial statements, management team, as well as our products market impact and presented it in a logical and prudent manner. It became apparent why the selection process was so tedious. This company, in our view, only selects and presents projects that are most likely to succeed in penetrating their markets and gain valuable market share. This was evident from the way they analyzed and presented our project to their investors.
Within the first 24 hours of being on the network, their investor network achieved what others and we could not, they attracted the attention of six potential investors who actively reviewed our profile and submitted documents. Four of these potential investors later became investors in our company, investing a total of million. Their Investor Network investment process was fast and intense. If you are not up to speed, you could be left behind on this network. Potential investors, all of whom we had up to the minute information on, reviewed our documents, requested new documents, some of which we did not have and had to create. At this point, we experienced the speed and accuracy in which the company prepares their documents, and the excellent quality of these documents. Their fees are worth paying.
75 days after first logging on, we concluded our deal with the fourth investor found on the network and received a bank draft for the final amount needed to close our first round of funding. The Alexander Miller & Company team made our funding possible.
Their network works for me… imagine what they could do for you.
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