Revenue Based Securities Provide Alternative to Broken IPO Process
While companies who were previously good IPO targets seek alternative capital funding, small to mid-sized companies that were always underserved by the IPO market now have a viable transaction opportunity.
CHICAGO, July 20, 2010 - Public data indicates $3.3 Billion was transacted via revenue-based financing techniques during an 18 month period of 2007 and 2008. With these deals growing in size, over half were $100M+ transactions during this period alone, this method of financing is quickly taking hold as a viable alternative to today’s undesirable IPO marketplace.
The Entrex TIGRcub®, a patented revenue-based security, is one of the chief players bringing these transactions to institutional and accredited investors who never took the time to explore or structure them before. TIGRcubs®, or Top-line Income Generation Rights Certificates, were developed to ensure transparency and liquidity for investors, coupled with the types of risk-adjusted returns typically sought.
Entrex CEO, Stephen H. Watkins, notes that the instrument’s simplicity and efficiency literally opened the door for revenue-based transactions into corporate sectors that historically hadn’t used them. He explains, “TIGRcubs® provide unprecedented access to the broader scope of $5M-$250M annual revenue companies—the important growth sector that represents 50% of the U.S. GDP and, historically, more than 65% of new job growth.”
Abundant published data is available showing that this key sector of companies, who continuously vitalize the U.S. economy, is underserved by the traditional capital markets (NASDAQ and NYSE) and Wall St. investment structures in general.
David Weild, former Vice Chairman at NASDAQ, and author of Grant Thornton’s recent release entitled “Market Structure is causing the IPO Crisis—and More,” suggests that Entrex offers an alternative marketplace that solves some of the issues hindering small to mid-sized company capital funding within the current public market systems.
Watkins notes that “the TIGRcub® security itself is what makes this alternative market possible by providing investors a transparent, monthly cash-flowing, inflation hedged, self-liquidating instrument that is non dilutive to the issuing company’s equity.”
He adds, “A continuous expansion of funding in this $5M-$250M sector of companies is going to both super charge the U.S. economy and build a massive new asset class from which investors are driving desired returns.”
Entrex is the place to find, research, track, manage and trade securities for entrepreneurial companies. Through the TIGRcub® security structure, Investors and Issuers are brought together in a Capital Market System that serves both private and public companies. TIGRcub® provide Investors with monthly income, liquidity and investment returns that are not based on exit events, or exposed to the volatility of the equity capital markets—all while providing Issuers a non-dilutive capital solution with risk-adjusted pricing simulating either debt or equity structures. www.entrex.net.
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