Buy Sell California Corporation

							TECHBA – WHITE & LEE

The ABCs of FAQs….on
 Business in El Norte!


             Mark Cameron White
             mwhite@whiteandlee.com
              White & Lee LLP
                July, 2006
ONE: EL NORTE…YOU’RE NOT
IN KANSAS ANYMORE

• That’s Good….
  −   Big market….growing Hispanic market
  −   Global reach though US partners
  −   Too much money…not enough good companies
  −   Now is the time for Mexico…
       • Opening of the Mexican economy
       • The Israeli model…not China or India
       • US attention
• And Bad….
  − Lots of competition…meritocracy
  − You MUST be aggressive
  − Market driven, not technology driven
  − Mexico is a resource…but the value must be in the
    US
  − Need low customer acquisition cost…and MUST be
    able to scale
  − This is no place for a family or life-style business
• So….Make the Best of It…
  − You can talk to anyone…
  − Network all the time
  − Lean from others…make the better
    mousetrap
TWO: THE NUTS AND BOLTS OF
SETTING UP SHOP…..

• Why Form a Corporation?
• California or Delaware
• Who Owns What….the Capitalization
• Seed Capital….Stock and Revolving Notes
• What about the Technology
• Direct Ownership….or Parent – Sub
• How to Protect the Owners…
  Vesting/Acceleration/Severance?
• Succession Issues…Vesting or Buy-Sell
• Tax Issues…on Customer Sales
THREE: OTHER PEOPLE’S
MONEY….
• When to Use Other People’s Money
• Where to Find It…the Types of Investors
• What’s the Story?...ie. What to Say About the
  Company…
• How to Say It…and Getting the Word Out
• What’s the Process…and Timeline
 What’s the Price?!
• Things to Consider…
  − Debt, bridge and equity
  − Amount needed and when…to build value
  − Control issues…are you ready for this?
  − Do you really NEED the Money….or Is There
    Another Way?!
• What NOT to Do…
  − Take too much money from the Wrong
    People…
  − Money and Advice…the SpongeCell example
  − Go Out too Early
FOUR: BUILT TO LAST…DOING
BUSINESS HERE…
• How to Find, Hire and Terminate Employees…
• Launching Sales in the US
  − Direct
  − Indirect
  − Critical issues in Partnering
• Tax Issues
• Relationship with the Mexican Operation
FIVE: LIQUIDITY…THE END
GAME

• IPO vs. Acquisition…What’s Realistic
• Good Companies are Bought…Not Sold
• Timing…It Depends
• Critical Issues
  − Price
  − Structure
  − Ongoing Liability
  − Non-compete
  − Allocation of Proceeds
  − If Stock….Get Tradable Stock
  − Indemnity and Escrows…..
Questions?