FREQUENTLY ASKED QUESTIONS

● COMPANIES ● INVESTORS ● BROKERS ●


What kind of projects do our Investors look at?

Investors look at ALL kinds of businesses. Some like particular industries, some are open to new technologies. All of them are looking to invest in profitable deals. We strive to have diverse types of  Investors.

What do Investors want in terms of percentage ownership and rate of return?

This is a question that varies from Investor to Investor and from Company to Company. Every company is at a different stage of growth and depending on the type of industry, revenue, risk and other factors, the answer will be different for each company. We offer a lot of information regarding this question on our BLOG.

In this type of economy, are Investors funding Companies?

Investors  are looking for alternative investments were they have direct control and know more of their investment.  Angel investing and venture capital are now more than ever a great source of funding for Entrepreneurs/Companies.

Frequently asked questions by Investors

Why should I register?

Our platform provides registered Investors with a wide array of investment possibilities and choices from different industries, stages of growth, countries and risk factors. You have access to this information once your registration is activated.

Who can register with Funds for Projects?

Under “Company Registration”: Entrepreneurs and/or companies at any stage of business can register if they are looking for funding to start up or expand.

Under “Investor Registration”: Angel Investors, Investment Groups, Investor Networks, Venture Funds and others who are accredited investors as defined by SEC Rule 501 and are willing the bear the risks and rewards of new investments opportunities.

Under “Affiliate Registration”: Any person who wants to become an affiliate of Funds for Projects for the purpose of recommending entrepreneurs/companies and he/she is interested in getting paid for doing so.

What happens with my information when I register with Funds for Projects?

Once your information is received by Funds For Projects, it is reviewed and your registration is activated so you can start viewing the companies’ BPOs.

Will you sell or give away my information?

We do not sell any information to third parties. Your information is only used to better understand who our users are and is only shared with Funds for Projects affiliates. We will only display your profile if you authorize us to do so, in order for entrepreneurs to contact you.

How do I view the companies’ BPOs?

After your registration is active, you Sign in at the home page and you will be taken to a page where you can search for companies by different search criteria.

Will all my information be displayed on my profile?

When you register with us, you can choose to have certain personal information (First Name, Last Name, Address, Telephone, Primary career background? Potential investment negotiations? Your overall Investment experience?) to not be displayed on your profile. That information is only visible to Funds For Projects in order to better understand who our users are.

When is my registration active?

Registrations are usually activated within 24 hrs after they have been entered. If you have any type of inconvenience Signing In after 36 hours of having uploaded your registration, please send us an email through our Contact US page.

Will you provide Investors with advice in negotiations with Companies?

You can contact Funds for Projects through our Personalized Services. when you need help with due diligence or investment search criteria, among others, and one of our seasoned executives can offer you sound financial, technical and operating advice.

Glossary of Terms

Accredited investor: term defined by various securities laws that delineates investors permitted to invest in certain types of higher risk investments, limited partnerships, hedge funds, and angel investor networks. The term generally includes wealthy individuals and organizations such as a corporation, endowment, or retirement plans. The federal securities laws defines the term accredited investor in Rule 501 of Regulation D as:
1) A bank, insurance company, registered investment company, business development company, or small business investment company; or
2) An employee benefit plan, within the meaning of the Employee Retirement Income Security Act, if a bank, insurance company, or registered investment adviser makes the investment decisions, or if the plan has total assets in excess of $5 million; or
3) A charitable organization, corporation, or partnership with assets exceeding $5 million; or
4) A director, executive officer, or general partner of the company selling the securities; or
5) A business in which all the equity owners are accredited investors; or
6) A natural person who has individual net worth, or joint net worth with the person’s spouse, that exceeds $1 million at the time of the purchase; or
7) A natural person with income exceeding $200,000 in each of the two most recent years or joint income with a spouse exceeding $300,000 for those years and a reasonable expectation of the same income level in the current year; or
8) A trust with assets in excess of $5 million, not formed to acquire the securities offered, whose purchases a sophisticated person makes.

Angel or angel investor: an affluent individual who provides capital, financial backing for a business start-up or entrepreneur, usually in exchange for convertible debt or ownership equity. A small but increasing number of angel investors organize themselves into angel groups or angel networks to share research and pool their investment capital. Angels typically invest their own funds. The capital they provide can be a one-time injection of seed money or ongoing support to carry the company through difficult times. Angel investors give more favorable terms than other lenders, as they are usually investing in the person rather than the viability of the business. They are focused on helping the business succeed.

Angel capital: funds that fill the gap in start-up financing between "friends and family" who provide seed funding, and venture capital. Angel investment is a common second round of financing for high-growth start-ups.

Asset: Everything owned that has value, including tangible items like cash, accounts receivable, inventory, land, buildings, and equipment.

Asset allocation: a term used to refer to how an investor distributes his or her investments among various classes of investment vehicles (e.g., stocks and bonds).

Blended payment: A loan payment, consisting of principal and interest, that is the same amount each and every month; a good example is a mortgage payment.

Break-even point: The level of sales where revenue equals total costs; a break-even point may also be expressed in terms of units of product.

Break-even sales revenue: The dollar amount a business needs each week or month to pay for both direct product costs and fixed costs; it will not include profit.

Cash-flow statement: A financial statement that shows when cash flows are received and disbursed by a business.

Cost of goods sold (COGS): Calculated by adding all of the expenses a business incurs as a result of producing its product or service.

Corporation: a legal entity separate from the persons that form it. It is the most common form of business entity among larger companies, chartered by a state and given many legal rights as an entity separate from its owners. Unlike sole proprietorships and partnerships, corporations are separate and distinct from their owners in the eyes of the law. As a separate entity, corporations have several distinguishing characteristics including limited liability, easy transferability of shares, and perpetual existence. Corporations also have centralized management who may be different persons from the actual owners. Characterized by the limited liability of its owners and the issuance of shares of easily transferable stock. In corporations, shareholders may transfer stock or their interest in ownership.

Current assets: Cash, accounts receivable, inventory, all term deposits and prepaid expenses which will be converted to cash within one year.

Current liabilities: Operating loans, accounts payable and accrued charges, including outstanding checks, wages, long-term debt payments and taxes due within a year.

Current ratio: Points out how easily a business can meet its debts; to calculate, divide Current Assets by Current Liabilities; the higher the ratio, the more easily a business can pay its debts.

Debt/equity ratio: How much debt a business has in relation to the amount of equity invested; a high level of Debt to Equity (D/E) can be of concern. To support the company, money can be raised one of two ways: by borrowing it (incurring a debt) or by selling ownership in the company (equity); to calculate the D/E ratio, divide Total Liabilities/Equity (TL/E).

Depreciation: A charge against a fixed asset that writes off the cost of that asset over its useful life; the amount of depreciation is entered as a non-cash expense on the income statement.

Equity contribution (capital stock): Cash that the owner(s) or investor(s) have invested in the business in return for a share of ownership.

Fixed assets: Include land, building and equipment/machinery that are likely to have a useful life to the company.

Fixed costs: Costs that remain unchanged, regardless of the level of sales; Example is the company's monthly rent or mortgage, leases, insurance.

Goodwill: An amount representing the excess paid for a company, its shares, or other assets above and beyond its net asset value.

Gross profit (or gross margin): The profit earned before determining operating and administrative expenses; it is calculated by subtracting the Cost of Goods Sold from Sales.

Income statement: Looks at all revenue received from selling products/ services and then subtracts the total cost of operating the company; the income statement reflects exactly how much money a company has lost or made during a certain period of time (net profit).

Incorporation: The legal process that makes a business a separate entity from its owner.

Intangible asset (soft asset): The non-physical assets, such as incorporation costs, patents, goodwill or trademarks.

Interest coverage ratio: The ratio of net income (before extraordinary items and income tax) of the business.

Inventory turnover: A ratio that points out how well inventory is selling; an important cash driver showing the number of times inventory is sold through in one year.

Joint stock company (JSC) is a type of business entity: it is a type of corporation or partnership. Certificates of ownership or stocks are issued by the company in return for each contribution, and the shareholders are free to transfer their ownership interest at any time by selling their stockholding to others.

Leasehold improvement: Improvement(s) made on leased premises.

Legal Entity: general term to describe all entities recognized by the law, including both juristic and natural persons.

Letter of credit: A guarantee of payment by a financial institution to a third party.

Leverage: Describes the amount of debt in relation to equity; the more debt used to finance the company, the more leveraged it is.

Limited Liability: a concept whereby a person's financial liability is limited to a fixed sum, most commonly the value of a person's investment in a company or partnership with limited liability. A shareholder in a limited company is not personally liable for any of the debts of the company, other than for the value of his investment in that company. The same is true for the members of a limited liability partnership and the limited partners in a limited partnership. By contrast, sole proprietors and partners in general partnerships are each liable for all the debts of the business (unlimited liability).

Limited partnership: a form of partnership similar to a general partnership, except that in addition to one or more general partners (GPs), there are one or more limited partners (LPs). The GPs are, in all major respects, in the same legal position as partners in a conventional firm, i.e. they have management control, share the right to use partnership property, share the profits of the firm in predefined proportions, and have joint and several liability for the debts of the partnership. As in a general partnership, the GPs have actual authority as agents of the firm to bind all the other partners in contracts with third parties that are in the ordinary course of the partnership's business. As with a general partnership, "An act of a general partner which is not apparently for carrying on in the ordinary course the limited partnership's activities or activities of the kind carried on by the limited partnership binds the limited partnership only if the act was actually authorized by all the other partners."Like shareholders in a corporation, LPs have limited liability, meaning they are only liable on debts incurred by the firm to the extent of their registered investment and have no management authority. The GPs pay the LPs a return on their investment (similar to a dividend), the nature and extent of which is usually defined in the partnership agreement. Limited partnerships are distinct from limited liability partnerships, in which all partners have limited liability.

Liquidation value: The amount of money for which an asset can be sold liquidity: Describes how readily assets can be converted into cash.

Long-term liabilities: Liabilities, such as debts or loans, not payable within one year.

Net worth: The owner's equity in a business; this is calculated by deducting Total Liabilities from Total Assets.

Operating (revolving) loan: Short-term financing to supply cash-flow support or cover day-to-day operating expenses.

Overdraft: A negative account balance caused by withdrawing more money than is available in an account.

Partnership: A form of business ownership made up of two or more people; the partners share an agreed-upon percentage in the responsibility, profits and/or losses.

Payment terms: The negotiated conditions for payment of invoices.

Personal guarantee: A guarantee made to the lender that an owner will take personal responsibility for repaying a business loan or any other debt obligation.

Private equity: an asset class consisting of equity securities in operating companies that are not publicly traded on a stock exchange.

Profit margin: The ratio of profits (generally pre-tax) to sales; to calculate, divide Pre-tax Profit by sales/revenues.

Purchase Price or investment amount: the full amount contracted for, including purchase of stock, assets, notes, consulting and non-compete agreements, assumption of debt, and outs in cash or kind.

Quick ratio: Measures how easily a business can raise cash by selling its most liquid assets; referred to as the acid test ratio; it is calculated by subtracting Inventory from Current Assets, and then dividing by Current Liabilities.

Ratio analysis: Calculating financial ratios to determine trends and to compare business performance.

Receivables: Goods representing invoices that have been billed, but have not been paid; also known as Accounts Receivable.

Receivables turnover: A ratio that shows how well receivables are being paid; an important cash driver showing the number of times receivables are collected in one year; calculate by dividing the Value of Receivables by Sales and multiplying by 365.

Retail sales revenue: Identify the annual sales revenue per square foot multiply that dollar figure by estimated floor space to derive an estimate of annual sales revenue.

Return on investment (ROI): Commonly used as a test of profitability; to calculate ROT, divide Net Profits by Total Assets.

Sales growth: The difference between current and previous year's sales divided by the previous year's sales.

Sales revenue: The total dollars from sales activity brought into a business each week, month or year.

Security: Assets belonging to the business (or its owner) pledged to a lender in support of a loan.

Seed Capital: The initial capital used to start a business. Seed capital often comes from the company founders' personal assets or from friends and family. The amount of money is usually relatively small because the business is still in the idea or conceptual stage. Such a venture is generally at a pre-revenue stage and seed capital is needed for research & development, to cover initial operating expenses until a product or service can start generating revenue, and to attract the attention of venture capitalists. Seed capital is needed to get most businesses off the ground. It is considered a high-risk investment, but one that can reap major rewards if the company becomes a growth enterprise. This type of funding is often obtained in exchange for an equity stake in the enterprise, although with less formal contractual overhead than standard equity financing. Banks and venture capital investors view seed capital as an "at risk" investment by the promoters of a new venture, which represents a meaningful and tangible commitment on their part to making the business a success. Frequently, capital providers will want to wait until a business is a little more mature before making the larger investments that typify the early stage financing of venture capital funding.

Seed funding: is a securities offering whereby one or more parties that have some connection to a new enterprise invest the funds necessary to start the business so that it has enough funds to sustain itself for a period of development until it reaches either a state where it is able to continue funding itself, or has created something in value so that it is worthy of future rounds of funding.

Seed money refers to the money so invested.

Share (also referred to as equity share) of stock means a share of ownership in a corporation (company).

Shareholder or stockholder: an individual or company (including a corporation) that legally owns one or more shares of stock in a joint stock company. A company's shareholders collectively own that company. Thus, such companies strive to enhance shareholder value. Stockholders are granted special privileges depending on the class of stock, including the right to vote (usually one vote per share owned, but sometimes this is not the case) on matters such as elections to the board of directors, the right to propose shareholder resolutions, the right to share in distributions of the company's income, the right to purchase new shares issued by the company, and the right to a company's assets during a liquidation of the company. However, stockholder's rights to a company's assets are subordinate to the rights of the company's creditors. This means that stockholders typically receive nothing if a company is liquidated after bankruptcy (if the company had had enough to pay its creditors, it would not have entered bankruptcy), although a stock may have value after a bankruptcy if there is the possibility that the debts of the company will be restructured.

Sole proprietorship: A form of business organization in which one person is the only owner; there is no distinction between the owner's and businesses' responsibility regarding the commitments made on behalf of the business.

Tangible net worth: Shows the owner's equity, calculated by deducting Total Liabilities from Total Assets, less (but not limited to) Goodwill, Incorporation/prepaid Expenses, Leasehold Improvements and Deferred Costs.

Term loan: A loan obtained for a specified length of time usually not longer than the useful life of the asset purchased with the proceeds.

Trade credit: Credit a supplier gives to customers by allowing them a certain period in which to pay; an integral aspect of managing cash flow.

Variable costs: Costs that change depending on the level of sales or production; could include sales discounts and sales commissions.

Venture Capital: is a type of private equity capital typically provided to immature, high-potential, growth companies in the interest of generating a return through an eventual realization event such as an IPO or trade sale of the company. Venture capital investments are generally made as cash in exchange for shares in the invested company. It usually comes from institutional investors and high net worth individuals and is pooled together by dedicated investment firms. Money provided by investors to start-up firms and small businesses with perceived, long-term growth potential. Venture capital can also include managerial and technical expertise. Most venture capital comes from a group of wealthy investors, investment banks and other financial institutions that pool such investments or partnerships. This form of raising capital is popular among new companies, or ventures, with limited operating history, who cannot raise funds through a debt issue. The downside for entrepreneurs is that venture capitalists usually get a say in company decisions, in addition to a portion of the equity.

Venture capitalists: companies that manage the pooled money of others sometimes in a professionally-managed fund. Although typically reflecting the investment judgment of an individual, the actual entity that provides the funding may be a trust, business, limited liability company, investment fund, etc.

Working capital: Monies left to work with once all liabilities have been considered; net working capital is a company's current assets less its current liabilities.


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