Holding Company with Patent seeking investor
Tapjoseph subscriber Posts: 6
edited December 2007 in Elevator Pitches
Hi Startup Nation,Well, after 23 years of working with other businesses to help develop their projects, starting 33 projects, overseeing $300M+P/Ls and taking startups from $0 to +$100M, I went out on my own three years ago.I wrote a patent in 2005 on how to develop cooperatives, and wrote a $1,495 book this year about this invention, that so far has sold 11 copies since October 2007 when I first made it available as an e-book. It has been well received by the business community. Basically, the patent allows the initiator of the cooperative to run their business almost like a private company for a period of time and helps increase the initiator`s business` discounted cash flows by as much as 40% over alternative private company models.My holding company has licensed the IP to two companies; one is in Ag Labor, and the other is in Internet Based financial solutions. The licenses for 2 other projects, a 100 MW wind farm in SD, as well as another Internet Cooperative are being reviewed currently by various groups, and it looks like there are 2 or 3 other groups talking about using the patent.When licensing, my holding company receives cash up front, a percentage of the gross sale and a percentage of the company either when sold (phantom stock) or as stock. In the case of the Ag Labor Coop, the holding company gets 40% of the sale price and 1.6% of billings. In the Internet Coop, my holding company gets 10% of the stock, and 2% of sales.In addition to the licenses, the companies that use the patent are paying consulting fees that I think can grow, with the right funding. The creation of about 97 pages of documents, forming the cooperative IP, as well as the art of terms that fit the goal of the initiator of the business are done by myself when the license agreement is signed.I have decided to seek cash for growing the Holding Company so that more licensing, consulting and growth are possible in the next quarter. I feel a strategic partner may help in the development of more licenses, as well as help me grow the consulting businesses that are being created by the licensing.I am willing to sell up to 20% of the holding company. The license income in the past 12 months consists of $60,000 cash from initial up front fee; $37,000 from consulting; and from in-value (based off of offers in last 2 weeks to purchase stock of current license holders) the stock value my holding company has in the 2 current companies is about $600,000. One of these (the Internet Company) has a verbal agreement that will allow between $30k to $60k to come into the holding company in next 2 months, when it sells 10% of the stock to a major bank. This injection of cash will allow it to grow significantly and the CEO of that company would like to sell entire company within 6 months, which if God smiles on us, would allow another significant inflow to occur.My vision is that with the right partner, my Holding Company could immediately initiate several of the licensing efforts simultaneously, instead of my current solo effort, which would expotentally grow the value of the Holding Company and cash from up-front licensing and consulting. I have been using the cash currently from the business to sustain my targeted growth. There has been no real mass marketing, which I can envision using the initial capital from this sale for.I have read many postings from this site and love the fact that many readers have been where I am currently, big on potential, short of cash. If you have a good personality and would like to help the world, please contact me.All the best and happy new year.Patrick
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Since this forum is for getting feedback on your elevator pitch, I offer the following comments:
1. For an elevator pitch, it has a lot of details.
2. Do you want someone to come "work" with your company or are you looking for a passive investor?
3. I assume that the patent has been filed and is "in process" with the USPTO.
4. As I`m sure you know, you need to exercise care in your communications so as to avoid the perception that you are making a general solicitation of securities - which is prohibited for "unregistered" offerings.
Have you determined the core "ingredients" for that person (ie skills, competencies, experience, etc)?
Would that person be required to buy into (make a cash investment) your business?
So why not create an "elevator pitch" aimed at attracting possible "partners"? You can describe what you "want" and what they will "get".