Many Investors and Entrepreneurs have learned the hard way, that traditional Equity, or stock-based Private Placements are a very bad idea.  But wait!  Don't walk away from private venture investing without learning a few key insider secret strategies.  You might walk away from big potential returns without knowing it.

One key strategy you will want to add to your venture investing arsenal is the Revenue Purchase Strategy, also called Revenue Participation.  First, a little background will help introduce the elegance and power of the Revenue Purchase Strategy.

The right venture investing structure can make a huge difference to you, whether you are an entrepreneur raising money for your company or an investor considering a potentially high yielding investment in this exciting arena.  There is a "better way":  the Revenue Purchase Strategy.  Once you learn the facts, we are confident you will agree.

Investors, Stop Losing Money by Using An Outdated Investing Model.

The main reason investing in private companies (the "wrong way") makes no sense, is most investors lose money ... often their entire investment.  This one reason alone should keep most investors away from Private Venture Investing ... but there are many more.  For example:  There is almost no way you will ever be able to sell your stock.  When you invest in private company stock, there is absolutely no market for the shares. 

Rarely, the company will buy the stock back.  Even more rarely, the company will "go public" and everyone makes a "killing".  These rare events are truly miracles.  The first thing you should do as a serious investor or a realistic entrepreneur is forget about either of those events ever happening.  If "lightning" does strike, you can celebrate, but don't go into this arena expecting miracles.

What happens in most cases is the investor can wallpaper his garage with expensive, but worthless stock certificates.  Along the way,  the investor will usually receive absolutely NO dividends or other payments. 

Then Why Does Anyone Invest in Private Companies??

The answer is "unlimited potential"!  Startup, emerging or small growth private companies are the future Giants of the business world.  They are exciting and potential multi-millionaire makers.  Most investors know that the current Tech giants, like Microsoft, Apple computer, Google and many others started on a shoestring.  Their early investors made piles of money. 

The sad reality is most Private Placement investments are disastrous to your financial health.  Wait, don't quit now ... you've read this far.  I promise there is a better and safer way to invest in these companies as a funding source.  And Entrepreneurs, you will want to learn how to structure your company so both you and your funding source will win.

A private placement is the primary legal document that private companies use when they need capital.  The company uses a private placement memorandum to sell private stock to Investors.  The company sells shares, or equity, and receives the funds it needs.  The investor gets "a piece of the action" ... a percentage ownership of the company ... and hopefully a share of the profits the company earns.  

The "Problem" with Private Placements is the Structure.

There are a few glaring problems with most private placements.  The most challenging problem is there is absolutely no way to know how much the shares are worth.  I don't care what financial "modeling" or valuation software you use.  The share price is typically based on the estimated "projected future value" of the company.  But who really knows what that will be?

This estimated value is created from entrepreneurial "pro-forma projections".  It really means that the company management figures out how much money they think they will need to take the business to the next level and then builds a financial model to support that. 

This does not always mean they are trying to hoodwink the investor.  In fact, that is relatively rare.  Unfortunately, it does not make much difference if the intent is to "hoodwink", or there is an "accidental hoodwinking".  The result is the same in both cases:  the investor loses money. 

To clarify:  These private placement stock investments are not public stock offerings.  The investors in these private placements receive illiquid, untradable private stock  The shares are not the public stock that you see on NASDAQ, Amex or the NY Stock Exchange.  That is publicly traded stock. 

Public Stock is far more liquid, meaning you can sell it easily.  It offers upward growth potential that is reflected by an increasing stock price.  One phone call to a broker, or one click of the mouse on your discount brokerage site and you can sell your shares and get your money in days. 

There are other potential investment problems with public stock, such as manipulation, market timing and a dozen other factors ... but this is not the time or place to discuss those issues.

How Does the Revenue Purchase Strategy Fix these Problems?  Warning:  It will sound too good to be true!

The Revenue Purchase Strategy (RPS) is unique.  It works well for both Investors AND Entrepreneurs. It's cheaper and easier to structure than the old-fashioned stock sale.  Finally, the RPS is actually much more likely to return more money to investors than any other type of structure. 

Are you getting excited yet?  Most investors and many entrepreneurs are about to shout:  NO ... It sounds too good to be true.  First question will probably be:  Why doesn't everyone use this "better mousetrap"?  If it's so good, why don't all venture capitalists require the Revenue Purchase model?  The other major question often is:  Is it legal?

The answers most likely will excite you, possibly shock you, but will definitely intrigue you.  We have prepared a FREE short report that will answer most of your questions about the powerful Revenue Purchase Strategy.  It will probably rev you up and have you raring to get started using these proven strategies.  When you register, we will also let you in on a closely held secret way of dramatically reducing your investment risk.

Free Bonus: When you register, we will send you information about a little known powerful strategy to help you better protect all your investments.  You don't have to "roll the dice" to earn higher returns!

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