Several institutional investors only invest into listed public companies. A Pass Through Investment Structure is an ideal mechanism to fund certain private companies.

The PassThrough Structure suits a company that has noteworthy management or proprietary assets, seeks to raise growth capital without selling a controlling interest, yet is not ready for a public stock market.

The Pass Through Structure simply places a publicly traded company ("Pubco") in the middle between an institutional investor and the private company and enables them to invest in and to use their global resources to support the private company.

When a Pubco strategic partner is available, the PassThrough Structure is generally the least expensive form of financing because a strategic partner will always charge less than a financial investor.

A strategic partner in most cases has a deeper understanding of the industry, the competition, the distribution channels, and the risk facing the private company and because of this certainty will provide more favorable pricing to the private company.

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The Pubco is commonly motivated by the opportunity to acquire an asset or an application that enhances its core business. The Pubco may be listed on any exchange worldwide.

The PassThrough Structure thus works to the benefit of all parties:

- The Beneficiary private company receives growth capital while staying private and maintaining ownership control. The Beneficiary also benefits by having the Pubco as a strategic partner/investor. The transaction can close very quickly once all parties agree to terms.

- The Public Company benefits by acquiring an asset, product, service, or application that it believes enhances its core business. This application can mainly be a carveout of the Beneficiary's core product line.

- Investor benefits by putting their capital to work in promising investment opportunities that would otherwise be unavailable to investors restricted to public market transactions.

Frequently Asked Questions

- What is in it for the Pubco?The Pubco generally agrees to the transaction because it can acquire an asset or application that it considers important to its core businesses. If the Pubco is not acquiring a majority interest in the Beneficiary, it is generally best to carve out an application or distribution channel that can be exclusively owned by the Pubco.

- Who finds the Pubco?The Beneficiary private company should initiate the relationship with the Pubco strategic partner or can retain an investment banker to do so. The key is having the Pubco understand the benefits of the application that they can control.

- Which Pubcos qualify?Pubcos that have established business models and whose viability is not in question because of operating losses, fundamental operating issues, or capital structure.

- What are the terms for the investment into the Pubco?Very similar to a PIPE transaction, so commonly convertible debt or preferred with warrant coverage or an equity line with a substantial up front advance.

- What type of Pubco should we look for?The Pubco who can benefit the most from the application provided by the Beneficiary is generally the best choice. Logical choices include existing or potential distributors, suppliers, or customers.

How Do You Approach the Pubco?The Beneficiary tells the Pubco that an institutional investor wants to invest in the Beneficiary but has a charter restriction that only permits it to invest in publicly traded companies.

The simplest way to explain the structure of the investment into the Pubco is a PIPE with a specialized use of proceeds. The Pubco's CFO normally immediately understands the transaction when presented in this format and will recommend it if he thinks they can control an important asset or application.

- How does the Pubco react when approached?We have received these 4 responses in the past:a) "Yes"b) "No way" (the application is of little value to them)c) 'Yes, but can we get additional cash for ourselves?" (typically the answer is "yes"),d) "Yes and we like the deal so much we will just invest our own money".

- Is the cost of the PassThrough Structure higher to the Beneficiary private company?No, it would not make sense for a Beneficiary to accept a PassThrough Structure if the cost of capital was less from another alternative.

- Who performs due diligence on the Beneficiary?The Pubco as an expert in the industry is generally the most qualified to perform people, industry, and operational due diligence.

- Can the Beneficiary later become publicly traded on a European, Asian, or other stock exchange?Yes, the PassThrough Structure does not affect a subsequent public listing.

- What are the steps to closing?1. The Pubco and Beneficiary agree that there is a potential working relationship and outline terms.

2. The Pubco agrees to enter into a financing transaction similar to a PIPE transaction with the use, or partial use, of proceeds to be dedicated to the Beneficiary.

3. The Institutional Investor indicates how much financing it will provide to Pubco.

4. Beneficiary and Pubco negotiate specific terms for Pubco's investment into Beneficiary.

5. The Institutional Investor confirms the Pubco's investment intent in a phone call with Pubco.

6. The Institutional Investor writes term sheet to Pubco.

7. Following agreement with Pubco on terms, the institutional investor writes term sheet to Beneficiary.

8. Beneficiary and Pubco sign terms sheet, sign engagement letter, and The institutional Investor attorneys draft closing documents.

9. Final documents executed, escrow funded, and transaction closes.

Precisely the first step on how to start a new business is to make your self ready to face such a challenge. A business will certainly require you to invest your time and your resources.

With this, you may need to equip yourself for such undertaking. A great way to promote your business is to use social networking media such as Twitter. Twitter nowadays has achieved prominence that your business will surely reap the favorable profits brought by it. Here is how:

Steps 1 Have Proper Time Management

We are all allotted equally 24 hours a day. What we do with this several hours is at our own discretion. To be able to assess yourself if you have utilized your time well, try to list all the activities you have in one day. This will serve as an evaluation. If you are operating your own business, you should at least try to maximize your time. The time you spend for Twitter should include also goals like to raise capital for your business.

Steps 2 Have the Right Objective

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The best way to be able to maximize your time is to set noteworthy goals to achieve in a day, in a week, in a month or for the whole year. This will serve as a guide to yourself as well as a motivation to work harder towards the materialization of the said goals.

Steps 3 Have a List

As mentioned in a famous proverb, time is gold. With this, each minute of the day should be spent on worth while activities. Among others the goal to be able to raise capital for your business should be allotted a considerable amount of time. Better yet, have a list on all the activities through the day as well as the time you consumed on such. This way, you will be able to organize your time well and be able to accomplish the things that should be done. Social networking sites like Twitter allows you to reconnect with family and friends as well spend some time for your business.

Steps 4 Have Some Spare Time

You should not also deprive yourself some spare time for yourself. You also need to rest as well as relax. Accordingly, you can use your spare time for twitter.

Steps 5 Have an Evaluation

At the end of the day, you should evaluate yourself. With the facts provided for your self, the task of evaluation will be relatively easy. Now, you try to asses if you were able to utilize Twitter as an effective business tool. How to start a new Business.

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There are numerous ways of corporations to raise capital. Selling typical stock, issuing preferred stock, dividends, IPOs, and debt. What other ways are there? Please help me come up with a long list. Well, I have your answer right here. Capital call placed on owners (if it is part of an agreement). This usually only applies to partnerships, but I can imagine an LLC requiring members to make a capital call.

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