To All,
In a continuing effort to educate myself I found this on the MGR thread. It was part of a post from David. R. Webb, president of MGR.
<<Michael, we too find some of the rules and regulations frustrating. It appears that in their exuberance to protect inexperienced investors, the regulations make it difficult for other investors to get involved.
All investors can get involved in Prospectus financings if the documents are qualified in their jurisdictions. That type of financing takes 4 to 6 months, and costs over $100,000. Add on commisions of 6 to 10%, broker warrants, etc. and you end up paying over $100,000 for the right to raise equity financing at 15% to 20% rates. That's outrageous.
Private Placements can be done more cheaply, but have some restrictions. In BC, if the placees take a minimum $97,500 investments, no prospectus of offering memorandum is needed. A big cost saving. There are a number of other excemptions, down to $25,000 investments, but these investors are limited to 50 in any given 12 month period, and they are required to receive an Offering Memorandum. That costs money to prepare, and takes several weeks to produce.>> |
