| |
|
Frequently Asked Questions
General
- What is EquityNet?
EquityNet helps entrepreneurs grow businesses and investors find deals. EquityNet is a patented web-based system where entrepreneurs can organize, analyze, optimize, and share a customized business plan with investors and business supporters. EquityNet investors and business supporters are empowered by a patented streamlined process which enables them to quickly absorb the entrepreneur's plan, giving the entrepreneur a better chance of getting their message across, getting funding, and receiving assistance.
- Who uses EquityNet?
Entrepreneurs / Business Owners or Managers. Any entrepreneur or business owner in any stage or type of private businesses (from pre-revenue start-ups to $100M/yr in revenue) can use EquityNet. EquityNet is not applicable to publicly-traded companies.
Investors. Individual investors, investment groups, venture capitalists, angel investors, government entities, grant agencies, non-profits, and banks all use EquityNet.
Business Supporters. Consultants, government entities, business incubators, service providers, small business development centers, universities, and other members of the entrepreneurial community all use EquityNet.
- Why use EquityNet?
- How much does EquityNet cost?
Free. EquityNet is free for entrepreneurs who want to create a business plan. EquityNet is also free for investors and supporters who want to receive plans from existing EquityNet entrepreneurs.
$25/entrepreneur. EquityNet is $25/entrepreneur for investors or business supporters who want to use EquityNet simply as a screening tool. The entrepreneur does not receive an analysis in their account and is only able to share with the one investor or business supporter who paid.
$100/entrepreneur for one year. EquityNet is $100 for entrepreneurs who want to create a plan and share with an unlimited amount of EquityNet investors and business supporters. An entrepreneur does not receive an Enterprise Analysis in their account. The year of use begins when the entrepreneur makes the upgrade payment.
$250/entrepreneur for one year. EquityNet is $250 for entrepreneurs who want to create a business plan, receive an Enterprise Analysis on that plan, and share that plan with an unlimited amount of EquityNet investors and supporters. The year of use begins when the entrepreneur upgrades.
- How do I get started?
Entrepreneurs register here. Investors register here. Business Supporters register here. The videos on each of these pages show the EquityNet process for each type of member. If you have any questions on the process or how to get started, contact us. - How do I pay?
Entrepreneurs:
After you register, go to the "My Account" tab in your account and pay by credit card.
Investors or business supporters:
If you are paying for a single entrepreneur or multiple entrepreneurs for which you would like to be billed upon each use, select credit card in the "My Account" tab and pay by credit card.
If you are paying for multiple entrepreneurs upfront, select invoicing in the "My Account" tab and contact us at 866.542.3638 to pay by check, credit card, or electronic wire transfer.
- Is an entrepreneur's business information made public?
No. Not in anyway. Plans are never made public. The only EquityNet investors or
business supporters that will see an entrepreneur's plan are the ones that an entrepreneur
personally chooses to share with. The entrepreneur has complete control
over who sees and who does not see their plan. - Is EquityNet just for high-tech and high-growth companies?
No. EquityNet is designed with flexibility to accommodate all ranges of private businesses, whether it's an $80M/yr in revenue international biotech company, a pre-revenue one person software start-up, or a modest one location coffee shop.
- What is an access code?
An access code is a way for entrepreneurs to receive usage which was pre-paid by an investor or business supporter. Unless an entrepreneur comes to EquityNet under the guidance of an investor or business supporter, they will not need an access code.
Investors or business supporters create their access code in the "My Account" tab in their account. The investor or business supporter will then need to provide their access code to their entrepreneurs. The same access code is used for all of the investor or business supporter's entrepreneurs. Each time the investor or business supporter's access code is used, one pre-determined use will be given to the entrepreneur and one use will be subtracted from the investor or business supporter's account.
Investors or business supporters who registered to receive deal flow from existing EquityNet entrepreneurs only, and do not intend to pay for their own client entrepreneurs, will not need an access code.
- What if I have a question which I don't see here?
If we missed anything, feel free to contact us and ask away.
Entrepreneurs
- Why should an entrepreneur use EquityNet?
EquityNet's patented web-based software enables you to create a free custom business plan in less time and money than traditional approaches. EquityNet guides you through the characterization of your business venture and prompts you only for information that is most valuable to your business and investors/lenders. With informative help notes, the input process is highly educational and prepares you to achieve success with outside parties, regardless of the stage of your business.
With an upgraded use of EquityNet, you receive your business valuation and investment attractiveness; your business's strengths and weaknesses; benchmarks of multiple business factors against businesses similar to yours; an analysis of your cash flow and capitalization planning; and the capability to perform "what-if" scenarios (with varying business assumptions) to optimize your plan.
You can then review profiles of and share your plan with hundreds of EquityNet members, including business consultants, grant providers, angel investors, and venture capitalists. Competing e-marketplaces offer disorganized, unstructured collections of business plans for their members which prevent each plan from being studied in detail. EquityNet investors and business supporters are empowered by a patented, streamlined process to absorb much more detail about your plan and opportunity, giving you a better chance of getting your message across, receiving assistance, and getting funding.
- What will an entrepreneur need to complete the input process?
- How long does it take an entrepreneur to complete the input process?
On average, 80% finish in
1-4 hours, 10% finish in over 4 hours, and 10% finish in under 1 hour. The more time an entrepreneur puts into the input process and the more time they spend analyzing and optimizing their planning, the more they will get out of the EquityNet experience.
- How do entrepreneurs use EquityNet?
- Is EquityNet for entrepreneurs with or without an existing business plan, or both?
Both. The EquityNet input process is, of course, easier for those with an existing business plan, although an entrepreneur without an existing business plan can use EquityNet to create their business plan and analyze, and optimize their planning from the very beginning.
- Is "Equity"Net just for entrepreneurs who are seeking equity investment capital?
No. Entrepreneurs without an interest in equity capital can use EquityNet to find loans and grants and also access a network of business supporters. Entrepreneurs who are not interested in seeking any type of outside investment or support still benefit from EquityNet by organizing, analyzing, and optimizing their business planning.
- Is my business plan made public?
No. Plans are never made public. The only EquityNet investors or business supporters that will see your plan are the ones that you personally choose to share with. The entrepreneur has complete control over who sees and who does not see their plan.
- I've completed a few steps of the input process and want to see my plan. When can I see my plan?
You can see your plan after you complete step 10 of the input process. Do not get stuck on any particular section - you can always go back and make changes after you generate your plan the first time.
Investors
- How do investors use EquityNet?
- Does EquityNet's approach try to remove the "human element" from the decision process?
Absolutely not. EquityNet doesn’t take the human factor out of the investment decision process; it simply expedites and enhances the probability of success at the first meeting between potential investors and entrepreneurs by facilitating the exchange of information and providing objective and independent analytics.
The entrepreneur will be more confident that a potential investor has an interest and that the investor truly understands the company, the risks, and probability of success. Further, by using Enterprise Analyzer, the investment community automates the grunt work of evaluating hundreds of business plans in order to identify with confidence “the enterprise” that best matches their interests, expertise, and investment criteria. This frees partner and staff time for work that requires personal insight and knowledge. - Small companies are allowed to offer and sell their securities under the SEC’s Reg D. What is Reg D?
Under the Securities Act of 1933, any offer to sell securities must either be registered with the SEC or meet an exemption. Regulation D (or Reg D) provides three exemptions from the registration requirements, allowing some smaller companies to offer and sell their securities without having to register the securities with the SEC. For more information about these exemptions, read our publications on Rules 504, 505, and 506 of Regulation D.
While companies using a Reg D exemption do not have to register their securities and usually do not have to file reports with the SEC, they must file what’s known as a "Form D” after they first sell their securities. Form D is a brief notice that includes the names and addresses of the company’s owners and stock promoters but contains little other information about the company.
The SEC recommends that if you are thinking about investing in a Reg D company, you should call its Public Reference Branch at (202) 551-8090 or send an email to publicinfo@sec.gov to determine whether a company has filed Form D or to obtain a copy. If the company has not filed a Form D, this should alert you that the company may not be in compliance with federal securities laws.
Note that this caveat appears on the SEC webpage: "We have provided this information as a service to investors. It is neither a legal interpretation nor a statement of SEC policy. If you have questions concerning the meaning or application of a particular law or rule, please consult with an attorney who specializes in securities law."
Source: http://www.sec.gov/answers/regd.htm
- Does the information requested of the enterprise provide a balanced opportunity to present the positive aspects of its business plan or is it overly focused on identification of risk?
The objective of Enterprise Analyzer is to present an accurate and balanced view of the enterprise to potential investors. Many of the quantitative indicators important to investors are associated with risk. (Obviously investors prefer investing where there is a large potential return with a minimum of risk so both factors play in their decision-making processes.) To be sure that the enterprise is portrayed in a balanced way, the input information requested does include such considerations as: - Synoptic Company and product/service descriptions (i.e., performance attributes)
- Market capturing strategies
- Market size growth potential
- Protection from competitive pressures including IP
- Technical attributes
- Competitive strengths and weaknesses
- Investment opportunity
- Qualifications of management team (biographical information and special skills)
These data, beyond those that are just straight financial and risk factors, are included in the Enterprise Analysis on the enterprise provided to the potential investor.
Business Supporters
Enterprise Analyzer
- What is Enterprise Analyzer?
Enterprise Analyzer™ is EquityNet's patented statistical business analysis engine. Enterprise Analyzer integrates several component systems into a novel application that
automates the process of enterprise investment analysis and comparison. To read more about Enterprise Analyzer, visit www.equitynet.com/glossary.aspx. - What is an Enterprise Analysis?
An Enterprise Analysis is the report which Enterprise Analyzer produces on the business. To read more about Enterprise Analyzer and the components of an Enterprise Analysis, visit www.equitynet.com/glossary.aspx.To view a sample Enterprise Analysis visit here. To view a sample Business Plan visit here. - Can more than one industry sector be selected for an enterprise?
EquityNet uses statistical information that is unique to each industry sector and so, it requires a user to select one sector for the overall business. A user should choose an industry sector based on the composition of their business such that the sector captures as much of their business activity as possible.
When a user enters individual products or services, each can be classified in a separate industry sector.
- How does Enterprise Analyzer calculate business valuation?
The enterprise valuation methodology employed by EquityNet's patented Enterprise Analyzer TM is based on discounted cash flow analysis that incorporates both enterprise attributes and assumptions and market-based pricing and discounting parameters. Enterprise Analyzer allows a user to adjust potentially hundreds of enterprise assumptions (e.g. financial projections) and recalculate valuation and investment estimates in seconds. As a result you can easily make adjustments to align Enterprise Analyzer's valuation estimate with that which you generate via a spreadsheet approach. You can view a more detailed description of Enterprise Analyzer's valuation methodology here www.equitynet.com/glossary.aspx?link=5. In calculating valuation metrics for a private enterprise, Enterprise Analyzer incorporates current valuation ratios from public markets to establish a fair market value for the enterprise at the time of projected liquidity event. Focused on the law of one price, this value is based on the revenue of the enterprise at the liquidity event and the corresponding public market "price/sales" ratio for that enterprise classification. This ratio is determined as a function of the enterprise operating profit margin at the liquidity event. - Does Enterprise Analyzer use ratios?
Yes, Enterprise Analyzer uses ratios (and produces ratios) in two ways; 1) Enterprise Analyzer uses ratios based on over 500,000 actual cases of Enterprise failure and success over the last several decades, and 2) Enterprise Analyzer produces ratios for the company being analyzed, mostly in the form of annual metrics that can be used for time-based trend analysis. You can see some of these ratios in the Summary, Financial, and Historical & Projected Metrics sections of the Enterprise Analysis report.
Note most conventional industry ratios are single metrics that aggregate statistics on both young and mature large companies. Given the substantial differences between young and mature companies, these conventional industry ratios are often of limited relevance and value to young companies. Enterprise Analyzer goes beyond highly aggregated industry ratios by benchmarking the company being analyzed over a series of years to companies of similar industry character and age. Enterprise Analyzer then alerts companies when their ratios (particularly forward-looking assumptions) are abnormal as compared to their peer group.
- How is Enterprise Analyzer capable of computing enterprise probability of survival? How accurate is it?
EquityNet conducted research on private business failure for many years and built a large library of statistical correlations that relate over 30 internal and external enterprise attributes (e.g., management experience, capitalization, time duration, economic environment, etc.) with enterprise failure and success. These statistical correlations are contained in EquityNet’s proprietary "Knowledge Base" and are used by Enterprise Analyzer to quantify 10 dimensions of survival risk for each enterprise.
EquityNet’s research encompassed hundreds of studies on business failure and the consultation of various experts/authors in the field. The scope of this research included data from over 500,000 cases of enterprise failure and success and hence, a diversity of enterprise types and maturities. This enables the multivariate algorithms of Enterprise Analyzer to reference statistical correlations that are specific to the character of the enterprise in terms of industry sector and maturity. As an example, Enterprise Analyzer references differing statistical correlations for a software enterprise than for a biotech enterprise.
When back tested, these correlations typically produce 60% to 80% classification accuracy, which is generally considered to represent a level of precision sufficient for screening-level analysis of private enterprises. As described in U.S. Patent No. 7,698,188, the Knowledge Base used by Enterprise Analyzer employs a data feedback mechanism that will enable Enterprise Analyzer to "learn" from its prior predictions and to utilize a continuously expanding base of statistical correlations.
Note: Risk quantification produced by Enterprise Analyzer is based on enterprise attributes and forward-looking assumptions as provided by entrepreneurs and/or their agents. While computational accuracy is ensured, Enterprise Analyzer cannot guarantee the validity or rational nature of enterprise attributes nor the validity of its risk quantification in cases where unreasonable enterprise attributes or forward-looking assumptions are provided. EquityNet recommends that the risk quantification produced by Enterprise Analyzer be viewed in context of the enterprise attributes and forward-looking assumptions as provided by entrepreneurs and/or their agents.
You can learn more about Enterprise Analyzer's risk quantification process at:
equitynet.com/glossary.aspx?lnk=4 - What happens after step 10 of the input process? Is my business info made public?
No. Plans are never made public. The only EquityNet investors or
business supporters that will see an entrepreneur's plan are the ones that an entrepreneur
personally chooses to share with. The entrepreneur has complete control
over who sees and who does not see their plan.
Step 10 simply confirms your input and generates your free business plan output in your account. If you have upgraded, the confirmation in step 10 will generate your Enterprise Analysis in your account.
- Do I have to enter my data sequentially or can I jump sections?
To combine flexibility, structure, and efficiency, Enterprise Analyzer's input process does have some sequential dependencies so that the system can learn about an enterprise and utilize that understanding in subsequent sections. This enables the system to prompt you for only the information that is most valuable to your business and investors/lenders based on your previous responses.
Once sections 1 and 2 are complete, most of the other sections can be completed randomly.
- How does Enterprise Analyzer compare aspirational financials with actual historical data of operating companies?
Most conventional industry ratios are single metrics that aggregate
statistics on both young and mature large companies. Given the
substantial differences between young and mature companies, these
conventional industry ratios are often of limited relevance and value to
young companies. Enterprise Analyzer goes beyond highly aggregated
industry ratios by benchmarking the company being analyzed over a series
of years to companies of similar industry character and age. For example, if a 3 year old company is being analyzed that has a certain revenue growth rate in 2011, the revenue growth rate value will be benchmarked to other 3 year old companies. Enterprise Analyzer then alerts companies when their ratios
(particularly forward-looking assumptions) are abnormal as compared to
their peer group.
Research Services
- What are "Research Services"?
"Research Services" or "Research Service Reports" are written research reports on emerging businesses generated by EquityNet analysts. All research service reports are specific to the business at hand and are tailored according to the individual needs of the client. Research services can consist of the following in part or in sum: Market Analysis, Competitive Analysis, Opportunity Assessment, Intellectual Property Survey, Technology Assessment, and Financial Modeling. To learn more about EquityNet Research Service Reports, visit www.equitynet.com/research or contact us. - How much do research service reports cost?
The scope and the cost of research service reports are tailored to the individual needs of the client. Market Analysis, Competitive Analysis, Intellectual Property Survey, and Technology Assessment starts at $900. An Opportunity Assessment or Financial Model starts at $1,200.
Consultations and proposals are free of charge. Most reports can be turned around in 10 business days. Call 866.542.3638 today to speak to one of our expert analysts.
- I'm an investor. How does EquityNet ensure objective an unbiased analyses?
EquityNet is dedicated to providing objective, independent, and expert analytical services that make available systematic and consistently organized information to support sound investment decision making. EquityNet offers its on-demand research services exclusively on a fee-for-services basis. We do not benefit in any way from a transaction between enterprises and investors. As a consequence, users of EquityNet research service can have full confidence that analyses provided are not biased by other revenue generating considerations.
Privacy
|
|