For Entrepreneurs: Raising Money in Public Markets Featured on Kauffman eVenturing(TM) Site.

KANSAS CITY, Mo. -- For entrepreneurs looking to finance the next leg of their growth without doing a traditional IPO or pursuing venture capital money, there are a number of interesting options for raising money in the public markets. This month, Kauffman eVenturing[TM] (www.eVenturing.org), a Web site for growth-oriented entrepreneurs operated by the Ewing Marion Kauffman Foundation, features articles to help entrepreneurs understand different ways to raise money, such as reverse mergers, direct public offerings, going public on foreign exchanges, private investment in public equity and more.

"Many entrepreneurs aren't aware of all their options, when it comes to tapping the public markets for capital," said Judith Cone, vice president of Kauffman Foundation's entrepreneurship initiatives. "It really pays for a fast track company to do a cost/benefit analysis of different alternatives to determine what's best at different stages of its development."

This collection features articles written by entrepreneurs who have recently raised money and by financial and legal experts who have helped business owners navigate public capital markets.

Following are some highlights:

* " Raising Money in Today's Public Markets" by Eric C. Jensen, attorney and partner, Cooley Godward Kronish, looks at the key alternatives to going public on NASDAQ, a route now very challenging due to Sarbanes-Oxley's stringent accounting, disclosure and corporate governance rules. This piece evaluates going public on London's AIM (Alternative Investment Market), acquiring a corporate shell (a company listed on a public exchange but no longer operates a business or has any assets), issuing private stock through investment in public equity, and raising money through a direct public offering.

* " Raising Cash via Direct Public Offering" by Rand Mulford, executive vice president for Adamis Pharmaceutical Corporation, a biotech company focused on prevention of viral infections, explains his company's strategic decision to access public capital markets by creating its own public shell through direct registration with the SEC. The advantages: access to more funding sources than a private company and potential for higher valuation.

* " Toronto's Capital Pool Company Program" by Mark C. Rogers, MD, Chairman and CEO of Bradmer Pharmaceuticals Inc., which commercializes drugs developed at universities, describes his company's success in raising capital by first going public on Canada's Toronto Stock Exchange's (TSX) Capital Pool Company listing, a listing for micro stocks that can be converted to a full TSX listing in a relatively short time frame. For businesses hoping to eventually also be listed on U.S. exchanges, he counsels adopting Sarbanes-Oxley compliant financial record-keeping from the get-go.

* " Raising Money in the Development Stage" by Terrance J. Bruggeman, executive chairman and director, Somanta Pharmaceuticals, a London-based development stage oncology company, shares his company's experience in evaluating options for raising equity capital. He reviews the pros and cons that led to Somanta's decision to do a reverse merger with a public shell company that resulted in attracting a number of institutional investors.

* " The How & Why of Direct Public Offerings" by James McKillop, economist with Tiber Creek Corporation, explains how direct public offerings (DPOs) work, what the SEC requires, and how development stage companies can issue stock via a listing on the Over-the-Counter Bulletin Board or Pink Sheets without using expensive investment bankers. McKillop evaluates the benefits of DPOs vs. doing traditional IPOs via an underwriter.

* " London's Alternative Investment Market (AIM) and U.S. Companies" by Nigel H. Reynolds, partner, PricewaterhouseCoopers in the UK, explores the benefits to some U.S. emerging growth companies - particularly those with links to Europe and market capitalizations of $50 to $500 million - of going public on London's AIM vs. going public via NASDAQ, which is associated with higher costs and more stringent regulatory/reporting requirements imposed by the SEC and Sarbanes-Oxley. Other benefits: on AIM, there are no minimum requirements for company size, track record or percentage of shares owned by the public. However, there are legal, tax and accounting issues to consider.

* " PIPES: Alternative Approaches to Raising Public Money" by Ted Roth, managing director, Roth Capital Partners, explains how PIPES (Private Investment in Public Equity) work, as well their advantages/disadvantages vs. a traditional IPO. When using PIPES, shares in the company are first sold to a select group of private investors (arranged by an investment banker) who assume liquidity risk by agreeing not to trade the shares or to disclose their purchase until the company registers with the SEC (typically within 60 days).

* " Reverse Mergers: An Alternative for Going Public" by Kenneth D. Polin, attorney and partner with San Diego-based Foley & Lardner LLP, explains the benefits (faster execution and less expensive than a traditional IPO) and the legal requirements involved in doing a "reverse merger." Reverse mergers, once associated only with penny stocks, are increasingly viewed as a legitimate way to go public.

* Tools and Templates: This collection is chock full of useful tools, from a chart that enables entrepreneurs to compare the benefits/requirements of alternative routes for going public at a glance, to an overview of the approximate costs to execute an IPO to links to a comprehensive "Guide to the Initial Public Offering" and an article on "Corporate Governance: The View from NASDAQ."

"In the past, for entrepreneurs looking for money and liquidity, going public on NASDAQ was the main choice," observed William Payne, a Kauffman entrepreneur editorial adviser and angel investor. "Now there are a number of viable alternatives for raising money from public markets to be considered, though not all provide liquidity."

The Kauffman eVenturing site is dedicated to serving the needs of growth-oriented entrepreneurs. Every month, a new collection of articles on key themes of interest to entrepreneurs - such as finance and accounting, people and human resources, sales and marketing, products and services, operations and the entrepreneur (e.g., strategy, culture, leadership) - is featured on the site. The collections contain a mix of original articles and a carefully reviewed aggregation of some of the 'best of the best' existing Web material on the topic at hand.

To read the full collection on "Raising Money in Public Markets," please visit the Kauffman eVenturing site at www.eVenturing.org.

About the Kauffman Foundation:

The Ewing Marion Kauffman Foundation of Kansas City is a private, nonpartisan foundation that works with partners to advance entrepreneurship in America and improve the education of children and youth. The Kauffman Foundation was established in the mid-1960s by the late entrepreneur and philanthropist Ewing Marion Kauffman. Information about the Kauffman Foundation is available at www.kauffman.org.