New Ventures Society
The projects is quite simple. But when we get to details it becomes quite complex.
Members pay $100 a year in dues. The dues cover the cost of operations, and the cost of forming new companies. The new company then files a registration statement with the SEC allowing it to offer the members 100 shares at $10 a share ($1000). This will be a closed offering available only to the members of the Society. This will constitute the initial capitalization of the company and subscriptions will be at book value. The company will also issue to each shareholder an option to buy additional shares (100,000) for up to 20 years.
After a brief delay to organize and build the facility the company will produce revenues. Average earnings for companies are a Return on Investment (ROI) of 10% some industries lower, some higher. Since we desire for the company to be 1000 times as large we can rely on compound growth to increase the size, (Rule of 72 gives 80 years to grow this big) or we can sell more shares. We have options outstanding to our members that would allow them to purchase 1000 times the shares they initially purchased..
The objective is to have the members sell the newly acquired shares at prices that would not depress the market price and at a price that would yield about $10 net profit per share. This can be done by a private sale to retirement programs and hedge funds with a requirement that they not sell for several years. Our initial market price would be around $20 a share (based on price to book and price to earnings), after 8 years the book value would have increased to $20 (Rule of 72) and the market value to $40. Exercising the options at $20 and selling the shares at $30 in a private offering would give us a $10 per share profit. With 100,000 shares in the option that would yield a net profit of $1 million.
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