The pricing of private securities is obscured by several factors: each is unique, analyses available for public securities don’t exist privately, and easy comparisons don’t exist. Cash-on-cash, simple interest, and IRR are useful metrics, but only if you apply them correctly. Let’s make sure that, when we’re talking about a Return on Investment (ROI, return or yield), we’re saying the same...
The rules are very different in the private markets, and you should know the difference if you’re going to play the game. We all know that you can trade public securities. The most well-known exchanges include the New York Stock Exchange and NASDAQ for U.S. public equities and the institutional “bond markets” for government and corporate debt. Don’t expect to trade your investment in a private...
Just as with public securities, private securities are generally either equity or debt, but that’s the simple part. The most commonly encountered forms of equity are called venture capital and “Private Equity” for private equity (yes…it’s used interchangeably), and senior vs. subordinated debt for private debt. They attract investment because they command higher returns, based solely on their...
Stock prices and bond yields are easy to find. But it’s challenging to confirm whether the terms of a direct investment in private placements are fair. Given that the private securities markets (over $2.4 trillion/year raised in the U.S.) are now larger than the public markets, we offer this framework to lend some perspective. The pricing of...
We financed a scrap metal dealer once that needed additional working capital to purchase and process scrap because it had high cost overruns in building its large-scale shredding operation. Let’s just say that experience is everything, and you can learn from ours. Numerous lenders already were providing equipment financing with broad claims on the company’s assets – so we couldn’t use that...
We were approached by a small company in the consumer goods business looking to raise capital to build inventory. It’s true, experience is everything, and we’re game to share. In our normal course of conducting due diligence, we discovered that the owner of the company previously had exited and sold another business and, rather than pay federal taxes, he had used the proceeds to improve his...
By Henry Yoshida | CEO of Rocket Dollar The Power Of Tax Deferral In A Self-Directed Account When we’re talking about your tip on a lunch out, 20% hardly seems worth discussing (especially if the service is good). When we’re talking about your retirement accounts, 20% could mean hundreds of thousands (even millions) of dollars more in your retirement accounts. To that end, I want to talk about a...
By James Jones | CEO of IRAeXchange.net I’ve spent a lot of time in and around IRAs and Self-Directed IRA or “SDIRA,” writing books, speeches, and, generally, educating folks on the topic. Inevitably, when people get a chance to engage with me after a panel discussions or other presentation, they ask questions. Shockingly, they are often CEOs, Fund Managers, and other financial...
In the interest of accessibility, here are some terms that any investor should be familiary with.
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