Monthly Archives: May 2012

What is Effi Enterprises?

 

Private Equity

Private Equity

Effi Enterprises was established in 1993 for the purpose of helping emerging companies in a wide variety of ways. Efraim Landa, who co-founded the company, is also an entrepreneur and understands many of the difficulties that start-up companies must deal with to become successful. Effi Enterprises has a goal of helping create value for customers.  Effi Enterprises has been offering expert help and advice to emerging growth companies and seasoned companies in both the United States and Israel. They are in the business of consulting and offer private and finance equity specifically to high tech companies as well as those in the medical field.

Entrepreneurships are difficult in the very best of situations. But when it comes to the financial aspect it can get very complex. Effi Enterprises has experience with helping businesses with these planning and decisions in a wide variety of ways. They can bring hands-on managerial experiences to the company as well as offer many different types of leadership interventions.  They can also help in areas like negotiating licensing.

One of the most important activities that an emerging company must do to be successful is create a business plan. Effi Enterprises can help with this procedure to ensure the proper information is included.  The business plan can be an integral part of obtaining various types of investments such as Venture Capital. Having a solid business plan in place gives the business some real numbers and information that can be shared with potential investors. It can make or break a deal.

They can also help start-up businesses or entrepreneurs explore and secure various other types of financial funding.  Using strategic planning experts can help a business with private equity financing, divestitures, and IPO’s. They can also offer their expertise in the area of developing and implementing marketing strategies.

Effi Enterprises has been largely involved in the medical market and those which develop high tech medical equipment. Co-founder Efraim Landa has a strong foundation in this arena as he has worked with companies which develop technological equipment such as pain free glucose meters and cardiac imaging equipment. Effi Enterprises has worked with companies such as Health Center Imaging of Fairfield County, LLC, CMT Medical Technologies LTD and Philips Medical.

With their broad base of experiences with various businesses in different stages of growth they can help companies establish a service network, a direct sales force or a dealer network. The expertise and experience helps them know how to handle making financial projections or developing divestiture strategies and other strategies to increase revenue. They assist by providing short term or long term management assistance.

With the experience behind Effi Enterprises they do not use a cookie cutter approach but instead tailor make plans and strategies to fit the needs of each individual company. The company was formed and continues to provide management consulting services which are specifically pertain to capital formation and marketing strategies. Effi Enterprises is dedicated to helping entrepreneurial companies in the ways that will be of the most benefit to the future of the company.

What is Private Equity Financing?

Private Equity Financing

Private Equity Financing

Private equity financing is where funds are made available to private companies over the long term. This can be accredited investors or institutional investors which are providing funds to a company which is either struggling or it can be in the form of a buy-out. Generally it is to help generate finances for a growing company which otherwise does not have enough profit to pursue expansions and growth on their own. These funds can provide the financial stability that a company needs to have while they are developing and progressing in the business world. Many times private equity firms, such as Effi Enterprises, come together to fund a leveraged buyout. (LBO) Through this type of funding companies can make larger purchases that might not otherwise be possible. The private equity firms then provide support to help improve the company’s financial circumstances in the hope that the company can be resold to another firm or be cashed out through an IPO.

Effi Enterprises is a consulting business which offers private equity financing to companies which are involved in the development and implementation of high tech medical equipment. They are a private equity firm which provides financing for emerging businesses in this particular business sector. Different firms may participate in particular types of companies and they specialize in helping increase the company’s valuation by assisting in the managerial aspects of the company. Effi Enterprises and other such businesses which provide private equity financing help a company refocus strategies, reduce cost structures, and strengthen the company’s leadership. Sometimes these strategies may mean that some parts of the company are sold off so that other parts can thrive. Firms such as Effi Enterprises can provide financial backing through private equity financing and business expertise to help ensure the company’s growth and success.

A real-life example of how private equity financing works is the Warner Music Group. The music label was purchased by a group of private investors. They purchased the company for $2.6 billion. Through much planning and managerial changes they corporately made operational cuts and just about one year later the company was able to go public and its market cap was over $3 billion. The interaction increased the company’s valuation as well as provided the private equity investors a decent return.

One thing to remember about private equity financing options is that it is not always meant to be a quick fix. It is a way to provide financial stability for a length of time. The contributors function in a managerial capacity which offers the companies a wealth of business expertise. One of the areas that companies such as Effi Enterprises provide when engaged in private equity financing is hands-on managerial experience and leadership. They can bring many useful business and marketing strategies to the table which can help increase the valuation of the company as well as provide funding for expansion and growth. They can offer advice on divestiture strategies and prepare financial projections and direction for the company. While the funding provided in private equity financing is beneficial to the establishment and growth of a company the business expertise from interested investors can be invaluable.

How to Get Financing for a New Company

Private Equity financing

Private Equity financing

One of the most difficult challenges an entrepreneur faces is raising capital for start-up. Efraim Landa is an entrepreneur who has faced these financial challenges and co-founded a company who can offer advice for start-up and emerging businesses. The first thing that needs to happen is that there must be a clear-cut business plan in place. If the business has no plan for success investors and other possible financing options will not be as quick to “buy in” on the idea no matter how good it is.

Business Plan

A business plan should inform potential investors about how the business will function, how profits will be realized and a projected growth rate. These must be reasonably stated and if possible include research data. A business plan should give potential investors or lenders a good look at the company’s real potential. Without a proper business plan investors will not have anything concrete on which to base their decision of whether or not to invest in a company.

It is important to create ways to present the company’s information through a presentation. It should include information about your project, the market and marketing strategies, and how the business will be managed. Also explain why the product is important and why it will sell. This, in conjunction with a well written business plan can be the “selling point” for a business.

Potential Investors

After the plan is in place it’s important to identify any potential investors. There are many options and companies like Effi Enterprises that are established to help entrepreneurs find investors. They can provide the guidance needed and they are also private equity investors. Get informed on the options available and pursue the routes that seem most productive.

Company Valuation

A term sheet should be created which outlines why the company is a good investment. This will include a valuation. If it is uncertain there should be at least a reasonable estimate of the company’s worth. Investors will be interested in helping establish a business in which they will be able to reap financial benefit in the long haul.

Investors

Angel investors are usually individuals who are willing to offer start-up financing for a new business. Venture capitalists offer financing options for new and start-up businesses in exchange for controlling interest and a portion of the profits. There are several types of private equity financing options available. It may be in the company’s best interest to work with a consulting business such as Effi Enterprises which is a company who helps start-up businesses locate various types of funding options. They can also help with preparing or reviewing business plans. One area in which a business needs direction is in locating angel money and other sources of business capital.

Getting Started

Once a firm or individual is located which can help provide financial backing for the business, set up an appointment. Be prepared and present the business plan and the proposition is a very honest manner. Let them know how the business started and how it is functioning presently. It is important to convince them that the company is a good investment. Be prepared to discuss how business strategies, investment strategies and financial arrangements will be handled. It is imperative that the potential investor can see the progress of the company so far and its great potential for profit.

What is Venture Capital?

 

VC Funding

VC Funding

Venture Capital is a source of funding for businesses which are just getting started. Investors provide funding for businesses that have a high growth potential. Efraim Landa is an expert at helping emerging companies locate sources for venture capital. As an entrepreneur, he understands the difficulties involved in getting a business off the ground. The company he founded is designed for the purpose of helping such companies. Included in their area of expertise in Venture Capital they include managerial as well as technical counsel.

VC Funding

Starting a business will take money this is certain. Office space, furniture, various types of office equipment and supplies and money for hiring employees are all some of the initial expenditures a new business should expect. There are some different ways to obtain the money for the many needs of a new business. Of course one can use resources such as personal savings or second mortgages. Bootstrapping is a common way to fund a business. This method uses a small investment to get started and then all profit goes back into the growth of the business. This method works for a business or industry where there are minimal start-up expenses and no additional employees are needed. And of course the traditional bank loan is possible. However, because each business has individual needs these options are not always the wisest or the best choice. There are certain limitations associated with each of these choices; unless of course the entrepreneur is already very wealthy.

Venture Capital is another way to meet the financial needs that are associated with starting a business. This can be a means of obtaining large quantities of finances which can help a business with start-up expenses especially for the fast growing business. Investing firms provide an investment in the business and in return they will receive a percentage of the generated profits. Generally the company who invests in the emerging company will also participate on the executive level such as taking a seat on the board of directors. This allows them to have a role in the decision making progress. For the growing company this type of experience represented on this level can be invaluable and help ensure the success of the business.

How VC Works

Before any investments are made into a company there must be a business plan in place.  The business plan will carefully lay out how the business is to be run, how it will make money and how fast it is expected to grow. This is presented to the interested investors who will contemplate if the business seems worth the investment. If the VC company feels like it is a worthwhile cause they usually offer a round of money called seed money. The funding may occur in 3 or 4 rounds before the company goes public with investment options.

One major negotiating factor that is considered when an investment firm participates in VC is how much stock they will receive from the profits. This is how they choose a valuation for a company. It is basically how much they feel the company is worth. Before investment begins this is called the pre-money valuation. After the VC is received by the company the investing firm then generates the post-money valuation. The percentage by which these two values change will determine how much stock the VC firm will receive. Typically, this is somewhere between 10 and50 percent.

What is an IPO?

 

IPO

IPO

Effi Enterprises was founded by Efraim Landa for the purpose of encouraging growth of emerging companies. One of the ways they achieve this is through IPOs. Effi Enterprises offer their expertise in this area as well as many other financial components of establishing a successful business.

Definition of IPO

When an investment banking firm takes a company public through raising investments, the transaction is called an Initial Public Offering, or IPO. Investment bankers are cautious about representing private companies and need to be assured that there is an adequate amount of public interest before proceeding. Their own fees will be based on the amount of capital the transaction will raise so they want to be certain it is worth opening the company up for private investing.

Advantages of an IPO

There are a wide variety of benefits that can be achieved through an Initial Public Offering. There is significant access granted to the investment capital and it fosters credibility because of the supporting interest of an investment banking firm. It will also provide the company, as well as the public investors with professional advice during the time of the transaction; and research reports and analyst coverage will be generated to ensure that the public remains informed. These will provide a strong base of public information that can be beneficial to the company later on. They can become excellent PR sources that help inform future investors about the health of the company.

Disadvantages of an IPO

There can be a few disadvantages of an IPO. For instance, it is more costly than a reverse merger transaction or a direct public offering. There will also be more need to form ways of keeping the investors informed such as having the additional responsibility of managing meetings or setting up conference calls. And the success of an IPO is largely dependent up on the investment banker as well as the current condition of the market.

Are there any costs for an IPO?

There are five basic fees that will be associated with an IPO. There are accounting and legal fees that will have to be covered. A professional adviser will assess a fee. And there are filing fees as well as financing fees that will be assessed. The fees associated with accounting, legalities, filing and the professional advisor will depend largely on the complexity and size of the transactions. It will typically cost in the thousands for an IPO, but it can cost up into the millions. The financing fees which will be charged will be based primarily on the funding that is raised through the investment banking firm.

Tips for Investing in IPOs

It is best to maintain a long term focus than to hope for a quick turnaround on investments. But even when staying focused on long term prospects a good IPO is difficult to find. Every type of investment has particular risks that are associated with it but IPOs are very different than investing in average stock. There are some things to keep in mind if an IPO is the desired choice. Firstly, you will need to do some research on the company, its financing, competitors and its industry health. It may be difficult at first to locate information, especially research data, since they have not been among public companies which are covered by analysts.

It is essential to read the prospectus. This will lay out the risks as well as opportunities of the company along with financial proposals for the money brought in through the IPO. Look for finances which are being distributed to fund research, expansions or marketing. Read objectively considering if the prospectus gives a balanced outlook concerning projections and financial earnings outcomes.

The Facebook IPO

Facebook IPO

Facebook IPO

Effraim Landais very familiar with helping companies with an IPO. His own company Effi Enterprises  works with companies to explore and obtain various  types of financial investments. They specialize in helping emerging companies handle revenue as they continue to experience growth. One sign of marked business growth is when a company is going to go public. Something Facebook recently announced they would be doing with their stocks.

Facebook ‘s IPO

One of the questions that are posed to Effi Enterprises concerns when it’s time to go public.  Companies are generally looking for a magic number to that then qualifies the private company for public investments. There really is no set number for revenue or profit that defines the “right” time to go public. Going public in actuality should be when the company is not desperate for finances. The company is no longer just trying to survive but is instead seeking funding to finance expansions or growth. Some are looking for public shares to help the company make acquisitions. Facebook is in the perfect spot to go public by this criterion.

In 2012, Facebook reported a 45% increase in revenue in the first quarter. In comparison, Google reported only a 22% increase in the same time frame. Going public could mean somewhere around $100 billion. Their goal is to raise $5 billion in the IPO, this is with the total valuation of around$100 million.

Going public may be a favorable way to generate revenue. There is no doubt that Facebook has value in the public eye. The question is if key investors will see the same value. When you look at the numbers it is astounding. Facebook will have approximately one tenth of the world’s population signed up. It is likely that no other business has had such a huge audience. Facebook already controls over a quarter of all online advertisements. That’s equal to about one sixth of the ad revenue generated in the United States. With numbers like that, why would investors in the private sector be hesitant to contribute?  With its track record it is nearly a guaranteed successful venture.

Business analysts will state that while the ads are the biggest asset, they may very well also be their biggest risk factor. The trouble from here is continuing growth in this arena. The larger a company becomes the more difficult it can be to continue and sustain such monumental growth. Can they continue to build ad campaigns and keep their audience engaged? What about the possibility of overwhelming the users? These are real risks that Facebook must address to reduce the risk of losing rather than gaining. Facebook will need to convince potential investors that they can continue monetizing the millions of users.

What Facebook Says About Going Public With Shares

Facebook plans to offer 180,000,000  shares to the public. These are all Class A Common stock and in addition shareholders are offering 157,415,352. This is their IPO- initial public offering. Previously there has been no public market for Class A common stock. The IPO price should be set from $28 to $35 for each share.