Capital Strategies

Stony Hill's comprehensive array of essential strategies and specialized support services are designed to propel businesses towards growth and optimal performance. The firm's expertise lies in crafting and aligning comprehensive operations strategies with business objectives and the ever-evolving industry landscape with an emphasis on critical factors like supply chain management, workforce development, and technology integration.

Additionally, Stony Hill offers invaluable assistance in navigating the complexities of fundraising and capital formation, ensuring a seamless journey towards growth while strategically planning the businesses financial trajectory. Stony Hill also has a dearth of knowledge to assist businesses considering the transition to public markets.

Growth Strategies

As businesses grow and mature, it becomes crucial to assess their ability to meet increasing demand, optimize investment value, and adapt to changes in technology, compliance, and regional stability. This is particularly important for middle market companies navigating the constantly evolving landscape. A comprehensive operations strategy is the foundation for achieving business success and gaining a competitive advantage.
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Business leaders must make operational decisions that not only yield immediate benefits but also ensure long-term stability and growth. To achieve these goals, businesses must develop a comprehensive operations strategy that considers all aspects of their operations, including supply chain management, production processes, workforce development, and technology adoption.
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This strategy should be aligned with the company's overall business objectives and regularly reviewed and updated to remain relevant and effective. As companies expand into new markets, they must consider cultural differences, regulatory requirements, and supply chain logistics.
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Developing a comprehensive expansion strategy can help businesses navigate these challenges and succeed in new markets. Supply chain management is also important. As businesses grow, their supply chains become more complex, and it becomes increasingly important to optimize these processes to ensure efficiency and cost-effectiveness. This may involve implementing new technologies, developing new partnerships, or rethinking existing processes.
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Finally, businesses must focus on workforce development. As companies grow, they must ensure that their workforce is aligned with their strategic objectives and has the necessary skills and knowledge to succeed in a rapidly changing business environment.

Capital Formation Support

Capital Formation Support helps clients assemble and manage their fundraising activities, allowing them to focus on their business. Business owners are often faced with the reality that they need to look outside their business for help to execute a capital formation plan to reach certain business goals. Turning to outside experts/consultants can be a challenging decision for business owners, who are inherently independent and self-reliant. However, wise business owners have always realized that getting outside guidance can be the shortest and least costly route to success for their business and ultimately themselves when pursuing capital.
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The need to consider several factors when helping clients with their fundraising activities, including whether the business is prepared, adequately positioned and qualified, and hindered by time constraints. They also consider the inside team and outside service providers, as well as the best options to achieve stated goals and the costs associated with those options. Helping clients determine whether they can afford the costs and fees associated with raising capital, as well as the deliverables and the amount of time it will take to achieve their goals.

Also assess the likelihood of success and what happens if the undertaking misses the stated goals. Fundraising requires a comprehensive strategy and execution, and the process takes time and money to execute. Every transaction has unique variables to achieve. Therefore, seeking outside guidance from experts can be beneficial for business owners who want to focus on their business while still achieving their fundraising goals.

Private Placement Support

Companies seeking to raise capital have a number of options under the current regulatory environment.

Regulation D is a provision that exempts some companies from the registration requirements associated with a public offering, allowing them to privately offer stock shares or bonds to pre-selected investors and institutions. Private placements are regulated by the U.S. Securities and Exchange Commission under Regulation D 504, 505, 506 (b), or (c).

Invited investors include high-net-worth individuals, banks, financial institutions, mutual funds, insurance companies, and pension funds. Private placements offer the advantage of fewer regulatory requirements compared to public offerings. Companies, engaging in private placements are not required to provide the disclosure that would be required in a registered offering, which means that investors may have less information to make an informed investment decision than, for example, stock purchased on a stock exchange. However, those selling securities under Regulation D must still comply with all applicable laws, including anti fraud, civil liability, or other provisions of federal securities laws.

Regulation D includes two SEC rules—Rules 504 and 506—that issuers often rely on to sell securities in unregistered offerings. Most private placements are conducted pursuant to Rule 506, which allows issuers to raise an unlimited amount of money in offerings relying on one of two possible Rule 506 exemptions—Rules 506(b) and 506(c). An issuer relying on Rule 506(b) may sell to an unlimited number of accredited investors, but to no more than 35 non-accredited investors.

Reverse Acquisition

An alternative method to a Private Placement is to go public thru a reverse acquisition is a type of business combination in which a private company acquires a public company, allowing the private company to bypass the lengthy and complex process of going public. In a reverse acquisition, the entity issuing securities is designated as the acquiree for accounting purposes. The public company is often a shell company with few or no operations, and the private company acquires a controlling interest in the public company by purchasing most of its shares. The resulting public entity is then managed by the formerly private company's management team, and issues all public filings expected of a publicly held entity.

Reverse acquisitions can be less expensive and less time-consuming than traditional initial public offerings (IPOs). They also allow a privately held company to become publicly held with less stock dilution and without raising additional capital. However, reverse acquisitions come with some history and some shareholders, and sometimes this history can be bad and manifest itself in the form of currently sloppy records, pending lawsuits, and other unforeseen liabilities. Additionally, there is unlikely to be much of a market for the entity's shares, making it difficult for investors to sell their shares.

Private to Public

Going public refers to the process of a private company selling shares that were formerly held privately and are now available to new investors for the first time, otherwise known as an initial public offering (IPO). Companies usually go public to raise capital in hopes of expanding, and venture capitalists may use IPOs as an exit strategy. Going public increases prestige and helps a company raise capital to invest in future operations, expansion, or acquisitions. However, going public diversifies ownership, imposes restrictions on management, and opens the company up to regulatory constraints.

If a company decides to conduct a registered public offering, the Securities Act requires the company to file a registration statement with the SEC before it may offer its securities for sale. The company may not actually sell the securities covered by the registration statement until the SEC staff declares the registration statement "effective". Once the registration statement is effective, the company becomes subject to Exchange Act reporting requirements.

The IPO process begins with contacting an investment bank and making certain decisions, such as the number and price of the shares that will be issued. Investment banks take on the task of underwriting or becoming owners of the shares and assuming legal responsibility for them.

The goal of the underwriter is to sell the shares to the public for more than what was paid to the original owners of the company. The final SEC approved prospectus is sent to print at an experienced financial printer familiar with the SEC's regulations. The offering price is based on several factors and determined by the investment banker the day before the registration becomes effective. In summary, going public is a significant step for any company and involves several important and sensitive steps that protect the company and potential investors.

Companies should consider the reasons for going public and the positive and negative effects it may have on the company.

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Mergers & Acquisitions