Artie Berne of Performance Capital talks about His Move into Equity Financing
What kind of work did you perform in the past?
I sold fiber optics components and semiconductors for 23 years and lived all over the country. I like the weather in Texas the best due to its great diversity, with no harsh winters.
How did you get to Austin?
I was living in Los Angeles with my wife and we “researched” the next place to live so we took various “working vacations” to check out different areas of the country and decided to move to Austin. It was big enough, but small enough. It had a great intellectual crowd, plenty of night life and cheap real estate.
I wanted to have my own business so I took up consulting on alternative financing deals for businesses that was having trouble getting financing. I started consulting by solving problems for companies that had working capital problems.
I’ve since met various private investor groups that do equity, debt and joint venture funding to companies that are financially challenged. We don’t do start up funding. We only look at companies that are starting to generate revenue even a small amount of revenue.
What type of companies and programs do you have?
I represent various private equity individuals and groups of investors and hedge funds that specialize in corporate investing and other alternative sources of capital . They typically look at deals of $1M and up to $20M for a piece of equity in the business. The group doesn’t normally take a large equity position typically around 5-8% of the company. They might charge a retainer and due diligence fee depending on how much work goes into getting the “package” perfect.
What kind of deals are you seeing these days?
Medical, gaming/entertainment, technology, web, software and alternative energy is hot. The deal has to have an interesting, unique place in the market. The deal needs to be able to capture a large market share through some unique selling proposition.
How do you evaluate the deal?
After first initially talking over the phone (Artie Berne – 512-261-0024) I usually ask for an executive summary, pro forma and financials of the company. Once I get those then we do a conference call with one of my funding sources. If that goes well, we then meet face to face. If the parties are still interested in working together we start the complete comprehensive paper work gathering so we can package the opportunity perfectly. We then have the principals come back in to do a formal presentation to the investors for their comprehensive due diligence. We presently have a 60 percentish rate of getting deals funded.