Global Crossroads Capital

December 13, 2007

Internet Brands, Inc. recently acquired a Las Vegas-based real estate
finance broker forum. This on line forum features a discussion string
about the list of legitimate commercial lending and hard money investor
fees. The list includes appraisal, environmental, geologic, title
search, site inspection, and legal opinion or due diligence. The
discussion host states the obvious; no lender will pay client expenses.
The exception is, perhaps some fees can be wrapped into the loan
package. Maybe.

Those seeking capital believe they can skip fees by pursuing private
investors. However, raising capital beyond a Founders Round of friends
and family requires either private or public placement memorandum. Both
PPM’s/PPO’s have mandatory state and federal registration fees. For
further details, see our prior report called “All PPM’s Must be
Registered With the State They are HQ’ed”. One exception is the M-1
form indicated under the Keywords centered on our homepage. But this is
available only in 1 state.

Investment banks can cost $100K to implement PPM’s/PPO’s and still take
at least 6 months. A State Senator is also a VP for a Nevada investment
bank that does accept partial equity in exchange for fees and arranges
contract financing to defer the difference. But this appears to be the
exception rather the norm nationwide.

There are those who prefer to attract angel investors in hopes of being
exempt from any expenditures. Angel investors tend to mitigate their
risk by collocating their capital as part of a group. And these groups
often require a presentation fee typically ranging from $100 to $1000.
To see the profit return expectations, cap limits, demographic, industry
and other limitations of angel investors; see both of our 2 prior
reports called “Merits of Asset-based Funding over Equity Capital” and
“Why Not to Blame Investors; the Difference between Enquirers & Clients”.

Collateralized enhancement financial instruments like stand-by letters
of credit or bank guarantees leverage capital for developers of large
commercial real estate and infrastructural projects. But these
instruments are not free and do require an acquisition or escrow cost
from 2% of face value ranging to $100M. Acquisition of pink sheets or
reverse merger shells can also easily cost over $200K.

Investor relations media communication firms found nationwide also have
legitimate fees such as; monthly administrative fees, multi-media
advertising budgets, preferred stock acquisition, sliding scale
commissions of funds raised, and/or subscriber fees. Just like the
comparison service provided by Progressive Auto Insurance; see our prior
report called “IR Media Communications Industry Cost Comparison”.

www.GlobalCrossroadsCapital.com offers at least 2 options for raising
significant amounts of capital without any out of pocket expenses.
These options found on our Trade Show Floor are Bartered Equity to $5M
and asset-based non-recourse 90% LTV Hedge Funds with no cap limit.
“Where Capital Trade Show meets Palm Treo” sums up our user-friendly
free access trade show formatted-push button accessed finance portal.

PREVIOUS: Part 4…Lehman Formula

Best regards,

Jeffrey D. Allen
C.E.O.

(702) 369-2621 9am-5pm PST

www.GlobalCrossroadsCapital.com

This entry was posted on Saturday, December 15th, 2007 at 11:39 pm and is filed under Due Diligence. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.