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Most of us in here take on a lot of risk in the penny stock market anyways but I was wondering if anyone has ever invested in a up and coming non public company. I have a opportunity to do so but am hesitant.
What do you look for? Projected growth rates, revenue stream, chances of going public…etc?
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So you have done this before glassman? I know the owners are legit, in fact I worked with them on some projects a few years ago. I just don't want to take this thing at face value. DD is always important but you cant do DD if you don't know what to look for.
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i did not have good fortune when i did it...
if i had read resumes? i probably wouldn't have...
i assume this is a big chunk of change you are considering... spend a little money to look at the backgrounds, and esp. the law firms they hire... look carefully at their share structure.. are the principals living beyond their means? if they are? they are likely to do the same with the company..
why are they looking for new investors? what is the money for? why aren't they borrowing it from a bank? it's been a long time since i ran a Dunn and Bradstreet,here's their website...
posted
All good questions, thank you. Not really a big chunk though. They are letting in investors from as low as 2k and that was the range that I was thinking about. The D&B won't really work if this is a new business will it? I know they don't really pay themselves (they are pretty well off) but own a lot of the stock. Somewhere around 67% at the present time. It is an s-corp and they are planning on going public in 5-7 years. In the mean time they are paying out investors in the form of dividends after the first year of operation.
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Green Demon, What you are asking about can be done and it can be done profitably. I turned a nice profit in 4 years by investing in a private company. Divenends were paid quarterly so there was some residule income but the big payoff came when the company was sold. I was also in a s-corp. One thing I would recomend is for you to ask them to define their accounting practices and find out if the managment is going to be accountable to investors. I have learned many things over the years of watching company accounting, 1+1 can equal 3, or it can equal -14 depending on the picture the accountant is trying to paint.
-------------------- If ignorance is bliss, why aren't more people happy?
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Thanks cotton I will get info this week and report back to you. What would you say the most important thing to look at Cotton?
WillTrade, they are a ring tone/background company. They have some new ideas and they seem pretty dedicated to what they are doing. I have checked out growth rates for this kind of business and they seem to be very conservative on there estimates. Anyways, I should have more info for for you guys in a couple days but I am starting to like the idea more and more.
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By the way the site is mpring.com but it is password protected. I guess they are planning to have it completed by mid July. I am definitely going to need to see that before throwing $$$ in. I have seen some ring tone sites that look like trash.
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I was dealing with a company that had a lot of overhead cost. There was also a lot of labor as well as finished goods inventory waiting for shipment. When quarterly reports were printed it always seemed that plenty of profit was tied up in finished goods, this always decreased our dividend but it is a standard accounting procedure, it was just frustrating sometimes. It sounds like you are dealing with a different type of company. The one i was in was a comercial manufacturing Comp.
-------------------- If ignorance is bliss, why aren't more people happy?
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Ya, most of the capital expenditure is initial outlays. Cost of design cost, setup cost, provider contracts... We will see but even the worst of sites get several hits, I was surprised.
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Interesting venture....I just did some quick DD on the ringtone industry, the industry as a whole seems like it just passed its infancy stages back between 2004 and 2006. From 2003 to 2004 it had a huge surge...I saw an article from Jupitermedia Corporation, "ringtone revenues were $91 million in 2003, more than doubled to $217 million in 2004." (http://hypebot.typepad.com/hypebot/2005/03/ring_tone_reven.html)
Then I found this from a USA Today article, "In 2005, ring tones pulled in $600 million, 20% ahead of estimates and more than double the 2004 take." (http://www.usatoday.com/life/music/news/2006-01-25-ringtones_x.htm)
Looks like it should come pretty close to hitting at least $1 billion this year. Pretty phenomenal growth right now.
How do they plan to compete with other sites? How do they plan to advertise, if at all?
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nice research...They are doing word of mouth advertising and have signed on with a company called Kcomm (www.kanatsiz.com)
They also have a feature that lets you cut out any part of a song that you want for your ringtone. Instead of playing the first 10 seconds or what not. I though that was pretty cool. I get the full info package tomorrow.
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