Knowing the S.C.O.R.IMOHIMI OHIMAI SWEARS IT'S A GOOD TIME TO launch his international airline, Triniton Airways airways Anatomy The 'pipes'–trachea, bronchi, bronchioles–through which air passes to and from the alveoli. See Small airways. . His reasoning is twofold. Technician and flight attendant labor is cheap due to industry downsizing (1) Converting mainframe and mini-based systems to client/server LANs. (2) To reduce equipment and associated costs by switching to a less-expensive system. (jargon) downsizing . And secondly, Boeing 747s The Boeing 747, commonly nicknamed the "Jumbo Jet", is an American long-haul, widebody commercial airliner manufactured by Boeing. Known for its impressive size, it is among the world's most recognizable aircraft. can be obtained at auctions for bargain prices. However, it's going to take $12 million to get the San Francisco-based start-up airborne and to open additional offices in New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of . Local banks are not parting with one red cent red cent n. Informal Insignificant value: not worth a red cent. Noun 1. red cent . Venture capital firms Name Location Founding date Managing Partners/Directors Specialty Capital managed 5AM Ventures Menlo Park, CA; Waltham, MA 2002 John Diekman, PhD (managing partner), Scott Rocklage, PhD (managing partner), Andrew Schwab (managing partner) life sciences $200M [1] have been more receptive, but Ohimai is leery about giving up at least 60% ownership to fund the project. The 40-year-old veteran aircraft technician is not discouraged, however. He has an ace in the hole: He's reaching out to the public through a Small Corporate Offering Registration (SCOR SCOR Scientific Committee on Oceanic Research SCOR Supply Chain Operations Reference model SCOR Small Corporate Offering Registration SCOR Specialized Center of Research (White Plains, NY) SCOR Second Cousin Once Removed ), a new method of raising capital. A SCOR allows a company with less than $25 million in annual revenues to raise up to $5 million from public investors. The main advantage of a SCOR is that it allows entrepreneurs to forego the labyrinth labyrinth (lăb`ərĭnth), intricate building of chambers and passages, often constructed so as to perplex and confuse a person inside. of paperwork and strangling regulations associated with traditional initial public offerings (IPOs). With IPOs, shares are sold at market value, reflecting expectations for the company's future growth. But engaging in an IPO (Initial Public Offering) The first time a company offers shares of stock to the public. While not a computer term per se, many founders, employees and insiders of computer companies have found this acronym more exciting than any tech term they ever heard. can be expensive and complicated. Big brokerage fees, legal retainers, government registration costs and 80-plus page documents to be filed with the Securities Exchange Commission (SEC) can add up to, at least, $500,000 to set up even a smallscale IPO. And that's before you even get to sell a single share. BROKERING THE DEAL More entrepreneurs are turning to SCOR since it enables them to personally handle the "brokering" of the deal. In other words Adv. 1. in other words - otherwise stated; "in other words, we are broke" put differently , the business owner prepares all documentation, creates a prospectus, hunts for investors and deposits money from investors in an escrow escrow Instrument, such as a deed, money, or property, that constitutes evidence of obligations between two or more parties and is held by a third party. It is delivered by the third party only upon fulfillment of some condition. account. Yes, this do-it-yourself method of raising money is legal, and it costs about $20,000 to complete. The charges primarily stem from hiring an attorney or SCOR consultant, retaining an escrow agent escrow agent n. a person or entity holding documents and funds in a transfer of real property, acting for both parties pursuant to instructions. Typically the agent is a person (commonly an attorney), escrow company or title company, depending on local practice. (See: escrow) to hold the SCOR monies, paying state filing fees and printing all necessary documents. "Banks are not interested in small businesses and start-ups, and venture capital firms will demand substantial equity in your company," says Kenneth Gay, president of DBS (Direct Broadcast Satellite) A one-way TV broadcast service from a communications satellite to a small round or oval dish antenna no larger than 20" in diameter. Investments, a Denver-based investment firm that specializes in SCOR issues. But a SCOR enables owners to raise capital from outside investors while remaining in control of their businesses, Gay explains. SCOR was created six years ago by the SEC in response to demands by small business owners for less bureaucracy when "going public." The SCOR guidelines fall under Federal Regulations A and D 504, which, in fact, are parts of the SEC's requirements for initial public offerings, or "going public." With Regulation D 504, entrepreneurs must file the appropriate registration documents with their state regulatory office, such as Secretary of State, Department of Banking and Finance or Department of corporations. However, that state agency is exempt from registering the offering with the SEC: Thus, entrepreneurs only answer to state authorities, not Uncle Sam Uncle Sam, name used to designate the U.S. government. The term arose in the War of 1812 and seems at first to have been used derisively by those opposed to the war. Possibly it was an expansion of the letters "U.S. . Under Regulation D 504, companies can raise up to $1 million in securities sales within a 12-month period. Entrepreneurs are required to provide an offering circular Offering Circular An abbreviated prospectus for a new security listing. Delivered to individuals and brokerage houses, these documents are issued to arouse interest in the new issue. Notes: An offering circular allows investors to access information regarding a new issue. to each buyer. The offering for this type of common stock must be at least $5 per share. Under Regulation A, each state must inform the SEC about the offering as it would an IPO. Regulation A allows the SEC an exemption from registering public offerings up to $5 million in any 12-month period. SCOR funds may be used to finance a new venture, expand an existing business, purchase equipment or manufacture wares. WHAT'S THE SCOR? SCOR shares can be common stock, preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. or debt securities. Under SCOR law, no stock dividend can be paid before the second year of operation is complete. And the dividends will be determined by the entrepreneurs and the SCOR regulatory office, once the two-year operation period is complete. Common stock enables stockholders to vote on the selection of directors and other important matters as well as receive dividends on their holdings. "In most cases, there will not be a high common stock dividend, because these new companies need to reinvest re·in·vest tr.v. re·in·vest·ed, re·in·vest·ing, re·in·vests To invest (capital or earnings) again, especially to invest (income from securities or funds) in additional shares. all of the profits for several years," explains Eric Pantsari, chief examiner The Chief Examiner was a fictional character, an alien appearing in the Marvel Comics universe. It would study a superhuman, often by forcing them to run through some sort of deathtrap scenario, then used the collected data to create duplicates of the superhuman being. with the South Carolina South Carolina, state of the SE United States. It is bordered by North Carolina (N), the Atlantic Ocean (SE), and Georgia (SW). Facts and Figures Area, 31,055 sq mi (80,432 sq km). Pop. (2000) 4,012,012, a 15. Secretary of State. "Investors get involved because they believe the company will take off," says Tom Stewart-Gordon, publisher of the Dallas-based SCOR Report, a monthly newsletter that tracks SCOR companies and regulations. Investors who opt for common stock shares are hoping the company ultimately will go public with a formal initial public offering. Often, the value of shares soars, immediately after an IPO, enabling original shareholders to make a killing. Preferred stock, like bonds, offer dividends at a specified rate. But unlike bonds, the company has no obligation to pay if it can't. Preferred stockholders cannot force the company into bankruptcy. If the company fails, preferred stockholders get paid before common stockholders but after holders of the company's debt. Preferred stockholders usually expect to receive around a 10% return, experts say. Debt securities are loans that must be repaid; they have a fixed amount, a specific maturity, which is usually between 10% and 20%. Under SCOR, stockholders may not sell their shares to another party; however, the stock may be given away as gifts. Shareholders at any time can resell the stock back to the company. But the amount they receive for each share depends on the amount of cash the company retains from the SCOR offering. If the company has spent most of the money, the investor would receive far less than his or her original $5 per share. If the company does extraordinarily well and accumulates a large amount of cash, the investor could get a handsome price for his or her shares. BUSINESS PLAN Every SCOR company must have a business plan approved by the appropriate state agency. The business plan will clearly outline how much money is being sought and how the funds will be spent. Each business plan must have a financial projections section, specifying the minimum amount needed and the maximum the firm would like to raise. For example, a company may determine it needs a minimum of $1 million to start a bare-bones business and a maximum of $3 million to cover three years worth of expenses. Missing the proposed capital target can be catastrophic. If the minimum is not reached, the firm must start all over again. The offering price is arbitrary but can't be less than $5. At some point the company can decide to pay dividends on the common stock, but there is no obligation to do so. Generally, there are no restrictions on who may purchase stock. Securities can be sold to as many parties as necessary to raise the required capital. However, each state has the right to impose virtually any restriction on stock purchasers. For example, last February, a Sacramento-based advertising agency was forced to close its doors when it was unable to raise the $687,900 required to fulfill its SCOR obligations. Anne Bruce/Trever Cartwright, the 16-year-old firm, blamed California's regulations for this failure. The Department of Corporations, California's SCOR regulators, mandated that prospective investors in the agency had to meet "super suitability standards." Those standards required investors to report a net worth (exclusive of home, home furnishings and automobile) of $250,000, along with a gross income of $65,000. California officials imposed such stringent restrictions because the advertising agency's offering circular showed the firm had incurred a net loss of $205,362 in its previous fiscal year. Furthermore, the ad agency's own accountant wrote that the agency's financial condition raised doubts about the company's ability to continue as a solid concern. Meanwhile, it's up to the entrepreneur to spread the word about the securities. Most hire a well-connected attorney, broker or consultant. A SCOR provision called "testing the waters" allows a firm to advertise before an offering has been made to help determine investor interest. Today, SCOR is recognized by 44 states. "We stand by anything that makes it easier for small businesses to raise money," says Craig Goettsch, Iowa securities superintendent. Since Iowa adopted the program three years ago, nearly 26 entrepreneurs have snared much-needed capital to manufacture sports equipment, open bookstores and develop software. To date, Iowa entrepreneurs participating in the SCOR program have raised $10 million. Some state officials have their reservations about SCOR. Alabama, Delaware, the District of Columbia District of Columbia, federal district (2000 pop. 572,059, a 5.7% decrease in population since the 1990 census), 69 sq mi (179 sq km), on the east bank of the Potomac River, coextensive with the city of Washington, D.C. (the capital of the United States). , Florida, Hawaii, Illinois, Nebraska, New Mexico New Mexico, state in the SW United States. At its northwestern corner are the so-called Four Corners, where Colorado, New Mexico, Arizona, and Utah meet at right angles; New Mexico is also bordered by Oklahoma (NE), Texas (E, S), and Mexico (S). and New York don't participate in the program. Most of these states fear that fraud may run rampant without government oversight. Even though South Carolina is a SCOR state, Pantsari, the secretary of state's chief examiner, cautions that the program "is harder than entrepreneurs think." South Carolina added a requirement that demands entrepreneurs hire an independent auditor Independent Auditor An external auditor with a certified public accounting designation that qualifies him or her to provide an auditor's report. Notes: These auditors aren't affiliated with the company being audited. to examine the firm's finances. "It's an extra expense," explains Pantsari, "but the investor needs to have a report they can rely on, not just the documents prepared by entrepreneurs looking for Looking for In the context of general equities, this describing a buy interest in which a dealer is asked to offer stock, often involving a capital commitment. Antithesis of in touch with. capital." THE DOWNSIDE There are drawbacks to raising capital this way. "Without the help of a brokerage firm working round the clock on selling shares, this is a big undertaking for a small business," counsels Charles Bell For other persons named Charles Bell, see Charles Bell (disambiguation). Sir Charles Bell (November 1774, in Doun in Monteath, Edinburgh - April 28, 1842, in North Hallow, Worcestershire) was a Scottish anatomist, surgeon, physiologist and natural theologian. , president of Charles A. Bell Securities Corp., a black-owned investment firm in San Francisco San Francisco (săn frănsĭs`kō), city (1990 pop. 723,959), coextensive with San Francisco co., W Calif., on the tip of a peninsula between the Pacific Ocean and San Francisco Bay, which are connected by the strait known as the Golden . If you are lax in promoting your offering and fail to meet the minimum requirement you have filed for, you will have to give investors their money back. "We try to make sure business owners clearly assess their needs," says Iowa's Goettsch, whose office serves as a consulting resource, not just a clearinghouse for SCOR information. "And that person understands that when participating in a SCOR you have to ask for a specific amount and then be able to reach that goal." Some entrepreneurs back out on their own because their expertise is running the business or developing a product, not in selling securities, comments Gay. Nonetheless, SCOR is catching on. The National Federation of Independent Business The National Federation of Independent Business (NFIB) is a lobbying organization with offices in Washington, D.C. USA, and in all 50 state capitals. NFIB claims a membership base in excess of 600,000. , a 600,000-member association based in Washington, has been aggressively lobbying for SCOR to be adopted nationwide. "We are still excited about the program. But the process has gone slower than we hoped," says Greg Toms, the director of the state of Washington's SCOR program. Washington was the first state to adopt SCOR. So far, 77 companies have filed in that state, and 40 of them have proceeded with the offering while 24 have raised the required capital. REGIONAL REVIEW To speed up the process, eight western states have banded together in a pilot program entitled Regional Review. Under the program, Alaska, Arizona, California, Colorado, Idaho, Oregon, Utah and Washington will appoint a single department to serve as the liaison for all SCOR filings. "This will make it easier for entrepreneurs participating in a SCOR to get in touch with the right parties and be more efficient with their offering duties," says Goettsch. The Regional Review officials are publishing a 130-page, step-by-step manual outlining the SCOR process and the rules of full disclosure. "For those business owners that have their act together, SCOR gives them a significant way to raise capital," says Bell Securities Corp.'s Charles Bell. "It is an opportunity for minorities to advance, but we have to seize the opportunity before it is taken over by others." RELATED ARTICLE: RESOURCES TO HELP YOU SCOR Trying to find SCOR resources will often feel like maneuvering through a labyrinth. First, call your local Secretary of State and/or Banking and Finance Department. If those avenues fail you, follow your tax dollars to some other options. Council of Better Business Bureaus 4200 Wilson Blvd. Arlington, VA 22203 703-276-0100 Mediates disputes between consumers and businesses, promotes ethical business standards and provides voluntary self-regulation of advertising. Check out accounting, brokerage and law firms This list of the world's largest law firms by revenue is taken from The Lawyer and The American Lawyer and is ordered by 2006 revenue:[1]
National Association of Securities Dealers National Association of Securities Dealers (NASD) Nonprofit organization formed under the joint sponsorship of the investment bankers' conference and the SEC to comply with the Maloney Act, which provides for the regulation of the OTC market. 1735 K Street NW Washington, DC 20006 202-728-8300 The NASD NASD See: National Association of Securities Dealers NASD See National Association of Securities Dealers (NASD). is a membership association for investment brokers and dealers, but the NASD will be able to lead you to your local securities office. The Securities and Exchange Commission 450 5th Street, NW Washington, DC 20549 202-942-7040 The SEC created the SCOR program, but the SEC is not the monitoring body. The SEC's consumer affairs department can help you acquire information regarding initial public offerings, just in case SCOR is not right for you. And you can complain to the SEC if you are concerned about any type of foul play foul play n. Unfair or treacherous action, especially when involving violence. foul play Noun 1. violent activity esp. murder 2. within your local SCOR governing bodies. The SCOR Report P.O. Box 781992 Dallas, TX 75378 The SCOR Report tracks SCOR companies and recent SCOR regulations. Annual fee: $200. The North American Securities Administrators Association The North American Securities Administrators Association (NASAA), founded in Kansas in 1919, is the oldest international investor protection organization. NASAA was created to protect consumers who purchase securities or investment advice, and their jurisdiction extends to a 1 Massachusetts Avenue Massachusetts Avenue may refer to:
Room 310 Washington, DC 20031 202-737-0900 Serves as national representative of the state agencies responsible for investor protection. Works to prevent fraud in securities markets. Monitors legislation and regulations. RELATED ARTICLE: DISCLOSURE SCOR disclosure documents are intricate. Generally, entrepreneurs must answer a 35-page questionnaire designed to give a full and accurate description of their company. They must describe the business and its properties, spell out the risk and offering price factors and how the proceeds will be used. They must also explain the distribution plan, and describe the capitalization, the officers and key personnel and submit the financial statements. |
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