The TSX-VX: A Great Startup or Emerging Investment Vehicle

Being an Angel/Venture Investment Fund, the Fund-House is always on the look-out for new investment vehicles to assist in acquiring the funding necessary to spur-on promising businesses. This allows Fund-House to evaluate larger dollar opportunities and broaden our investment scope.

One such funding vehicle is the Toronto Stock Exchange's Venture Exchange.  The TSX-VX is a fully regulated public exchange which is used as a stepping stone for junior issuers/corporations through the use of Capital Pool Companies (CPCs).

A CPC is a shell listed on the TSX-VX for the purposes of completing a "Qualifying Transaction" with a business that will become the assets of the public company. A CPC must have, at least, three individuals and a minimum of $100,000 or 5% of total funds raised.

The CPC prepares a prospectus that outlines management's intention to raise between $200,000 and $4,500,000 by selling CPC shares at typically twice the issuance price of the seed shares, and to use the proceeds to identify and evaluate potential acquisitions.

For Fund-House investments (which fall under the Industrial, Technology, or Life Sciences categories) the TSX-VX requirements are as follows:

- Net Tangible Assets of $750,000 or Total Revenue of  $500,000 or Arm's Length Financing of
   $2 million.
- Issuer MUST have significant interest in the business
- Requires a history of operations or validation of business
- If no revenue, than a TWO-YEAR management plan demonstrating reasonable likelihood of               revenue within 24 months.
- MUST have a public float of 500,000 shares, with 20% of Public Shares in the hands of Public
   Shareholders.

For an Angel Investor, such as Fund-House, the opportunity to engage local high-net worth investors is very good for business and reputation. Additionally, finding emerging businesses in the health care and clean-tech industries (which are Fund-House priorities) in the Greater Phoenix will not be difficult.

The TSX-VX is a great alternative vehicle for Fund-House in satisfying established businesses that are growing into larger organizations and require venture funding but through a public forum. 


Stay in touch,
Jim Lavorato
Principal, Fund-House Ventures, LLC 

COLORS: How To Market With Them

We've previously discussed on Fund-House's 'Launch Pad' how colors impact people and how they should be used in logos, names, and imagery for promotion and marketing.

Ad people, graphic designers, and marketers all know full well how certain colors effect consumer behavior and purchasing.  To the extent that color may be the determinant in a purchase - 93% of buyers focus on visual and 85% say color was their primary reason for the purchase.  So, lets look at the various colors and their impact on consumers' purchasing decisions.

RED - Great for sales. An attention getter. Used often in consumer goods packaging or to generate                  interest in a product.

BLUE - Men's preferred color. Associated with peace, water, tranquility, reliability. Provides a sense
              of security. Used by conservative Brands looking for trust - ie. financial institutions.

GREEN - Think healthy, power, nature. Used in stores to relax customers. Stimulates harmony and                     encourages decisiveness. Starbucks only major Brand to use green for it logo.

PURPLE - Royalty, wisdom, respect. Stimulates problem solving and creativity. Frequently used to                      promote beauty and anti-aging products.

ORANGE & YELLOW - Cheerful and optimistic. Yellow can made babies cry, while orange                                                         triggers caution. Used to create a sense of anxiety which can be used to                                                draw-in the impulse buyer and store browser.

BLACK - Authority, stability, strength. A symbol of intelligence, but not if used to frequently.

GRAY - Practical, solidarity, oldness. Too much is not good as it can be depressing.

WHITE - Purity, cleanliness, safety. Perceived as unaltered and clean.

HOW BRANDS USE COLOR

McDonald's - High-energy colors of red and yellow. Green would not work for McD's. As stated, Starbucks is the only major brand to use green. Why? To promote a sense of relaxation.

Contrast reduces eye strain and focuses the user's attention. It is best to use a very bright color for background and a dark color for the product and text.

For websites the use of a monochromatic color in various shades is easy to read. For example, using shades of black/gray/white together. Complementary colors, using two colors that are opposite, for example, red and yellow. Triple scheme - using three colors close on the color spectrum, ie red, blue, and purple.

Note: Information for this article was derived from Small Business Trends 'The Psychology of Colors'.

Stay in touch,
Jim Lavorato
                 
                 

The Executive Summary: A Call-to-Action

How To Write An Executive Summary - Think Call-to-Action Button

1-3 pages which summarizes the overall business plan/proposal and the vision of your company. Clear and concise it encapsulates the reasons for being and pre-sells the whole idea of your venture/proposal: this is the Executive Summary.

It's not a summary at all, but a marketing tool to sell you business to the client (investor). It needs to be persuasive, specific, focused.  Not descriptive but purposeful. Having the just right graphics and detailing solutions to problems. It is a Call-to-Action to lure the reader into wanting to delve further into your proposal.

When to Compose? First or Last

Write the Executive Summary first to organize thoughts and use it as a Guide as you and others prepare the plan/proposal. Acts as an idea filter and develops best way to pitch the Summary to client/investor.

Write the Executive Summary last, after you have conceived the entire plan/proposal and pull out the best parts for summation.

There is no right or wrong time to compose the Summary. Some people prefer to compose/compile it before writing the body of the plan/proposal. While others prefer waiting until the plan is completed and then writing the Summary. Either way, it's your choice but just make it good.

How the Executive Summary should be structured:

- Opener: The Why of your vision.
- Need: Talk about the 'what's in it for them'.  Show you understand there perspective and how they       benefit - the positive outcomes.
- Solution: Why your plan/proposal will work. No details, just enough to entice further reading
- Evidence: Why your company. What qualifies you vs. the competition. What differentiates you.
- Call-to-Action: Close the deal. The whole summary is a CTA. Why they want to invest in your             venture and how everyone will share in its success.

Do's and Don'ts 

- Keep it short. No more than three pages.
- Use straight-forward language not buzz-words
- Don't use too much technical jargon/lingo
- Focus on Client/Investor. What do they want to know.  How can you help them.
- Mention the Client's company name several times, if possible.

This is the Executive Summary as Call-to-Action. Follows the advice above and it will work for you.

Stay in touch,
Jim Lavorato

BLOG: A BUSINESS MUST HAVE

Why Have & How To Blog

A Blog is the least expensive and greatest way to advertise and promote your business and brand, all the while increasing your SEO.  From pre-seed to large every business MUST have a blog.

How To Set Up A Blog? It's Really EASY!

- Go to Google blogspot
- Build Your Blog (about 1-2 hours, tops)
- Start To Post
- Your Done!

Why use Google vs. other Blog Host? Simple. Google has 90% of all internet search and they link the blogs they host to their search algorithms. Therefore you increase your search exposure to being on the first page of any search by a potential consumer/customer.

How To Manage Your Blog

- A good Name (Google with register the domain name selected)
- Choose Google as your platform and host
- Link your website to your blog
- Design a blog which enhances and nurtures your Brand
- Publish posts that are relevant, short, and have graphics and/or videos (link to YouTube)
- Post at least 3x per week for starters, more if you can
- Automatically link posts to all of your other social media sites from Facebook to LinkedIn.

All businesses should have a Blog. It is outreach to your current and potential customers. It promotes Brand loyalty and has fan-based sticky-ness. It's much better then email blasts (you should do both) because blog posts can automatically be sent to email addresses while at the same time are available to a worldwide audience.

What You Don't Need To Set Up A BLOG

- Computer programming or coding skills of any sort
- No software of design expense - it's all FREE
- No operating experience required. Just start 'Talking' to your audience

Don't name your blog the same as your Company name. For example, Fund-House's blog domain name is fhventures.blogspot.com the name of the blog is 'Launch Pad'.  However, the Fund-House
logo and name sit proudly at the top of the Blog.

If possible use key words is the name and certainly key words in your posts (Google will pickup on this and enhance your search profile.

So, that's it. Block out about 1-2 hours. Think of a good name. Go to Google blogspot and design and launch your company's blog - and it's all FREE.

Stay in touch,
Jim Lavorato