Seed Corporation Small Business Loan Application: Fill & Download for Free

Equity crowdfunding in the U.S. begun May 16th, 2016 when the SEC finalized the Jumpstart Our Business Startups (JOBS) Act. President Obama originally signed the bill April 5th, 2012 so the SEC took over 4 years to finalize it. This 4 year wait was due mainly to protecting non-accredited investors (91.5% of U.S. households) from suffering “un-affordable losses”.Accredited investors are those who:Make $200k+/year for the last 2 years and this year, ORhave a net worth of over $1 million excluding their primary residenceThere is more to the definition, but this is a simple explanation. Accredited investors (8.5% of U.S. households) are clearly the wealthy people in the country. Why does this matter?Small businesses have a few different alternatives to acquiring startup funding or expansion capital. Below are some traditional methods:Traditional bank business loan - simple go to your local bank, fill out an application, and wait for the call. Unfortunately, many lenders require a“personal gurantee” which completely destroys the use of a ‘corporate veil.’ Small business loan approval rates are as follows (04/2016 to 08/2016:23.1% at big banks48.7% at small banks42.1% at credit unions62.8% at institutional lendersAngel investors - are similar to VC’s, but tend to focus on investing in early stage startups. They will typically diversify across startups due to the high failure rate. Angel investors are competitive with VS’s usually requesting 2.5x return.Venture capitalists - VC’s are typically very hostile when investing in startups. They’ve been known to take over as CEO or take a large portion of the company. These are large investments and are private - usually late stage funding.Initial Public Offering - this is essentially what crowdfunding is. except the company raising funds is not traded on a public market after a crowdfunding raise. This is the stage at which a company goes public with their corporation, but is typically very lage amounts of money. NASDAQ's Homepage for Retail Investors reports these recent IPO amounts:Avista Public Healthcare Acquisition Corp. = $300 millionAdvanced Disposal Services, Inc. = $346.5 millionCamping World Holdings, Inc. = $250 millionEquity crowdfunding has become a type of pre-seed capital for startups - the beginning stage to get a piece of a startup’s equity in hopes for a much larger return once the company is acquires or goes public.Feel free to connect with me on LinkedIn if you’re a company seeking guidance through equity crowdfunding; want to stay up with industry news and trends; or simply want to learn more about equity crowdfunding. Hope this helps! Carpe diem.

Business size is determined by tax policy, the application or not of anti-trust and monopoly provisions and by employment contract law.Its very hard to define what a small business is without making a semantic argument.In the US the definition changed in 2003 when the Justice Department indicated that it would not prosecute monopoly and anti trust cases. This was a consequence of China entering the WTO, and Bush 43’s National Champion policy.In other words all small and medium sized businesses in the US were deemed uncompetitive in the global landscape, and necessarily had to cease operations.This did not result in forced closing of business; nobody had the administrative authority to do that at the time. And nobody of course wanted the fall out from large corporations entertaining predatory practices to achieve said national goal.The pinch point was Microsoft’s conviction on monopoly extensions and anti trust violations. They had to remove the presiding judge, since he also wanted to charge Microsoft with criminal racketeering charges and witness tampering, and was pretty vocal about it. In August 2003, having removed the judge, the JD announced that they would drop the penalty phase, consequent to the conviction.The agreement though was clear: if you want to grab somebody’s technology, you need to buy them out.It is of course simpler to reverse engineer IP. IP is nothing else than a trade secret (know-how) and employment contract(s) under State law. There are protections for semiconductor masks, and patents for industrial process, but no sui generis protection for software. Software assets are not a property right. In the US alone, the only formal protection is the Digital Millennium Copyright Act (DMCA) that bans decompilation.By enforcing non predatory business practices, the venture capital industry for software assets became possible. Again, if you are a small developer, and your technology is interesting to a larger National Champion, the process is to buy them out, and make the VC’s that invested whole.But even here nobody is running a small business. You are building a business not with the intent to generate profit, but with the intended purpose of either becoming a national champion or being bought by one.The VC industry avails itself of the public market for securities. Anything that is regulated by securities law cannot by definition be considered a small business entity. Its not just semantics, the entrepreneur does not own the small business, he or she operates a public market corporation.At that same time there was a veritable boom of M&A activity. Again, in order to curtail predatory practices, purchasing the assets of smaller players was seen as the proper solution.I helped a family friend with such an issue. He owned 14 supermarkets in a defined region of the north east. He was not a small business, and he owned his turf. But 14 supermarkets is a small business in terms of nation wide big box retailing. They offered 14X Ebitda. As he told me in the board meeting: “I have been doing this since I was 12. I am sixty, 14X means by 65 I have no income…”That of course is how a small business person thinks. I pointed out that 15 years worth of profit, was taxable profit. All in without a skillful tax accountant, that’s a 60% tax rate. At capital gains rates finessed that would be a 15% tax rate, ergo, the equivalent of 4 x 15 years or 60 year’s worth of income, today. I also pointed out that he had 9 supermarkets with leases under 3 years, which a big-box player could easily outbid him on. And I also pointed out that he would have income from the remaining properties on 20 year leases, or he could sell them to the REIT that owned the remaining leases at 40 year’s worth of lease income that he bought at 18 year’s lease value.Last but not least I pointed out that somebody would eventually crush him, because monopoly was no longer defined on a regional basis, but on a national basis.Therefore, if he got crushed, who was going to buy out his physical assets, namely refrigeration, shelving, improvements etc at whatever price was left on the amortization table…?I also pointed out that if he picked the right big-box to bet on, he could also capture the stock appreciation from the consolidation. He sold out.The same thing happened with small carting companies. Waste Management consolidated the industry via M&A and roll-ups. The government fully guaranteed the outcome, by throwing the poor bastards under the EPA bus, and then further pressured the honorable gentlemen of the carting business with District Attorney initiatives under the RICO act.At the time I owned a small semiconductor testing and module assembly operation on Long Island. I had negotiated my carting contract with my trusted local operator. Tony had been pretty upfront: “Cash payment gets you a 30% discount…” and so it was. So when Tony came over “to fuck me out of lunch” code for picking my brain, we discussed the issue. My point to him was simple: “Tony, you have been collecting cash in a envelope for three years now every other week. Who’s to know what you are charging, me or anybody else. Lets say its a hundy per week. Hire a real contract lawyer, draw up the paperwork, and invoice me and everybody else for $200. Then take all the signed and delivered business contracts at too-hundy to WM, show them all your costs as per your tax filings, and tell them you want fifteen times your real profit. Ohhh, yes and make sure they understand what the consequences of pointing out the discrepancies between your cash position and your checking account are…Again, nobody killed off the small carting businesses in the north east. They were bought out in a combination of cash and WM stock taxed at capital gains rates. NYS all in at the time was 62% effective tax rate.The tax rate is the killer. Those can be avoided if you are a stock play, and your supply-chain starts in Macau, I mean Hong Kong and you invoice out of Ireland after you do a double Dutch skip through the City. Tax policy determines effective business size.In 1998 a small business in Manhattan was somebody sewing 500 dresses a week. In 2018 a small garment business has a far east supply chain and sells exclusively through Macy’s.I took a look at many deals in those days, and industry after industry was rolled up in similar ways. Small business were killed off by any manner of ways, but all involved size determined on the national scale, not on the regional scale.What is a small business in the US? Its a retail operation.The semantic shift was payed for by banks advertising “small business services and loans” 24/7 on TV and cable. But those are not small businesses, intended as 10m (small) or 100m (medium) sized manufacturing businesses. Small business strictly means “mom and pop retail operations, including service businesses under 20 employees…”In the US a small business is a retail operation. There are no small businesses.In Europe the situation is more complicated because the EU enforces anti-trust at the EU wide level, and the individual States also have regional enforcement.An example: In the average American city you usually have one cable provider, one copper provider and one satellite provider. AT&T is a telco so they provide a service guarantee but 2Gbit service, Comcast does not give a flying rat’s tail but provides 40Gbit, and Dish is at the mercy of the weather. Comcast charges $60 for cable and $120 for an all in entertainment package. Take it or leave it.In most of the EU States, the network provider is a regulated utility. Individual city or regional providers provide you with internet service, and others provide you with entertainment options. Internet is $15 per month and you pay a-la-carte for entertainment. When you have a dozen choices of service providers, the cost is one fourth, and the providers are necessarily small business. Some are larger, some are regional, some are country and some are pan european. But at the end of the day there are small businesses riding on the regulated utility providing business and consumer solutions.In Europe even rail roads are regulated utilities, and if you want to run your own small rail road company, you can.There is no such thing as an American Airlines Airport Terminal. Terminals are regulated utilities, even those punks from Ireland can get landing slots wherever they want and crap out the price…There is another finer point with employment law. Most European countries have lifetime employment contract law. That means, in case you are an American and fail to grasp the concept, that you cannot fire people.The result is favorable to small businesses because the law usually only applies to businesses with more than thirty employees.A large manufacturing organization will keep their employment levels at a fixed level. That is usually at their minimum factory utilization rate. Anything beyond those production levels, then gets outsourced to smaller manufacturers. Which is why countries like Germany, France and Italy have millions of small businesses. If the national champion has demand in excess of their marginal utility rate, the demand gets absorbed by the smaller businesses that can afford to hire and fire.That operates like any building contractor in the US. They have a stable workforce of specialists, and with contract in hand they sub contract out the work to others. Of course in the US the sub contracting also exists because the labour is not legally entitled to work in the US… but that is a separate issue… and regardless, the sub contractor has to pay the facilitator if you want to pull permits on a reasonable time schedule.I looked at the contract structure for Fincantieri, Europe’s largest ship builder and could not make any sense of the true extent of controlled companies and non controlled sub contractors, and their sub contractors. Its a web of small, medium and large business entities skillfully choreographed around ship contracts. I am not knocking the process, even the US Navy uses their services to build the latest and best war ships. 70% of cruise ships the world over are built there.In the US, agriculture is massively vertically integrated. Yes, McDonalds breeds the chicks but then contracts out their growth to weight spec. But even the companies doing that have scale. You are not buying seed or chick from small businesses. The small businesses are those paying the wetbacks in greenbacks. That’s how the immigration system was designed to work.In Europe there is of course vertical integration, but due to labour laws, you can actually be a small business owner, and fill the demand in excess of the marginal utility rate. Sometimes those are regional associations and consortiums, but they are small businesses.Japan has lifetime employment. That also drives the national champion - small business dynamic. Korea is also very vertically integrated, but they also have the lifetime employment contract expectation.The British have it just about right. The “Establishment” must comprise 15% of the population with another 15% made up of shop keepers, and the remaining 15% necessary for a parliamentary majority coming from pensioners. Once you economically disenfranchise the Establishment, you no longer have the ability to build a parliamentary mandate.That mandate is built on the proper balance of private enterprise, services and national champions. Anything else results in authorities having to Read the congregated crowd the Official Riot Act of 1918. Thatcher did that twice whilst re-balasting the Ship of State, coal miners running riot and the treasonous Irish rabble rousers busy bombing London streets.In China a small business is anything that is not formally owned by the Government, is not a business operated by the Military, or is not listed in the major stock exchanges.Of course there is no private property in China, so define it as you please.They also employ a substantial amount of sub contractors in the supply chain. Its not that you cannot fire somebody, is that if you do it with any regularity, the Party Boss will show up and point out that the land your building sits on belongs to the Party. Its subtle… but effective at keeping 1.3b people employed.To summarize what drives the size issue:Tax policyMonopoly and Anti-TrustEmployment LawThe rest is a semantic argument. Argue what you will but a retail shop owner is not a small business owner, he or she is a shop keeper.Thanks for the ask, that’s all I got for today.

Higher corporate taxes or perhaps closing some of the loopholes corporations use to lower their tax liability may reduce some seed money for startups but then again there are other factors to consider.One factor is the SBA or Small Business Administration. with extra funds from Bernie's higher taxes this valuable government agency, that guarantees business loans of all types and provides research grants as well, can fund more start up entrepreneurs.Another factor not directly related to Sanders tax policy but something to consider as well is the higher minimum wage proposed by Sanders. Young entrepreneurs could go to work at McDonalds and save up the venture capital they need to start their empire.The next Elon Musk or Bill Gates might just be the kid you see working the french fryier or filling out an application for a government loan or research grant as many of our nations successful entrepreneurs have done in the past.