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New Instrument Enables Investors to Capture Income from Private Company Revenue Growth
Chicago, IL – January 23, 2007 – Entrex Inc. announces the creation of a proprietary new financing instrument called Top-line Income Generation Rights Contracts, or “TIGRcubsSM”, which are designed to garner high current cash-on-cash returns from investments into growth-oriented private companies.
David Weild, the former Vice Chairman of NASDAQ who’s collaborating with Entrex as leader of its capital markets team and working to bring TIGRcubsSM to market, explains how this is a different direction than traditional private equity. “TIGRcubsSM are contracts between an institutional investor and select private companies who agree to share a percentage of their top-line revenue, over a set period, in exchange for a sum of growth capital. Because it’s not an equity stake, investors will see cash returns coming back immediately and regularly. This eliminates the wait for a liquidity event, as in venture or other private deals which involve equity ownership, and may be used by the venture and private equity community as a source of later-round growth capital that minimizes dilution.”
Specifically, TIGRcubsSM will capitalize on the revenue growth of private companies who have annual revenues under $100 million and several years of operating history with demonstrated growth. Fund Manager Terry Temescu, formerly of Goldman Sachs and founder of Lyric Capital, says “real fund performance will come when the portfolio companies meet and exceed their own projections. This under-$100 million sector of private companies is a vast market with limited access to growth capital. Our analytical data supports the expectation of a healthy current income return to investors—based on strict portfolio selection filters and company eligibility criteria.”
Founded in 2002, Entrex’s mission is twofold: 1) to build structured and consistent capital sources for private growth-oriented companies in the $5-$100 million sector; and 2) to mature an efficient capital market for this subset of the private sector.
TIGRcubsSM are receiving positive attention from both private and institutional sources and will be licensed for first use in a fund this quarter.
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