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Early stage businesses need cash for growth. Sustainable growth is an important factor in determining the success of any company. This requires funding in excess of internal sources of revenue.
Many early stage companies do not have the assets necessary to secure traditional bank lending even though they may have high revenues. So company owners look to other sources to fund their growth.
The Investment Protection program reduces the investor's risk. Similar to what surety bonds do for contruction projects the investment protection program does to ensure that the investor's original investment is returned in the event that the company does not meet the investor requirements.
Company owners determine how much money is needed to cover the growth of the firm. Then they add an investment protection factor to that amount. The factor covers the cost of protection, maintenance on the account and a host of other financial requirements. The amount of the investment, plus the protection deposit, is funded by the investors. The factor funds are deposited into an account and maintained for the life of the protection period.
ESC provides the company owners with documentation that are used to set the investor qualificaitons and requirements. If those requirements are met by the company within the agreed time frame then the deposit funds are returned to the company owners.
In the event that the investor requirements are not met within the time frame then the complete investment made by the investors is returned to the investors in exchange for their stock or other holdings in the company. ESC then works with the company to provide some type liquidity for the stock holdings. |