View Full Version : Dump kits for pick-up
04-30-2008, 06:21 AM
Hello all, Steve suggested I post a link to my web site on his forum to help the members.
We manufacture dump kits for late model pick-ups. I'm sure you've seen the inexpensive versions from our competitors on eBay or Northern Tool. Ours is totally different, your bumper and hitch stay intact rather than welded the bed. Pictures speak a 1000 words, please visit and look around.
Please email with questions, I'm very busy in the shop and might not see your post in the forum or PM for days. Thanks for the invite Steve.
04-30-2008, 06:41 AM
I like this concept a lot. Do you have any history on how this business got started? I'd love to hear the story!
I'd also love to see some pictures of the installation process. How long would it take to install this dump and what kind of tools do you need?
Also, something you might want to consider is, can you offer the forum members some kind of discounted price for a certain period of time? If you can, I can help promote that to our readers and GopherHaul show viewers.
04-30-2008, 07:40 PM
Sure thing Steve. I guess the whole thing started when I bought a friends 1978 Chevy Silverado way back in 1985. He had a UniHoist under bed dump, but used it so seldom he put a cap on the bed. I thought it was pretty cool so i paid $3500 for everything. I used it to landscape my parents house and haul junk to the dump. Two years later I bought a run down house and 3.25 acres of land. Needless to say the place was overgrown and unkept. I worked on both the house & land using the dump several times a day.
Once I got everything cleaned out and cleared, I bought a 4WD John Deere tractor to bush hog. I added the front end loader, backhoe, box, pulverizer and grooming mower later. Dad bought me an equipment trailer so i could do his home projects. First i had to take the truck to a trailer hitch company so they could weld up 200 pounds of steel under the bumper. Had to notch out the bumper to clear this low mounted receiver when dumping. Couldn't dump with the hitch & ball installed, was an extra pain to pull it out all the time.
As long as I had all this equiment, I decided to start a part time landscaping business to help pay for it in 1987. The whole business deal just exploded in my face with jobs. I was working full time on night shift, then working my own company with a couple helpers. Long story short, I quit, went full time, by 1994 I was grossing $1.5 million/annual and had gone thru 175 employees. I had two of these pick-up dumps and six larger single axel dumps. Had a CAT 943 track loader, five utility 4WD tractors, a topsoil PowerScreen and six acres of industrial land. I sold off the mowing division in 1992 because it was too big & spread out.
In mid 1994 my S Corporation was bought out with a 50% downpayment and I owner financed the rest with a 4 year note at 9%. I sold that '78 pick-up dump with the business for $3500. I kept the little John Deere and bought myself a new F450 with contractors dump. Due to my non-compete I couldn't do landscaping, so i did sewer/water and concrete work if I wanted. ####, I was retired at 34. Started golfing alot, but everyone on the course was 30 years older than me. They'd ask me what i did for a living, I'd tell 'em I was retired, they'd look at me like I was nuts.
Several of my former employees went out and started their own businesses. One bought out my truck, trailer, and tractor in '96. So I had no dump truck for the first time since 1985. I was driving a brand new red '96 vette though!
By '99 I was going stir crazy. Bought a new crew cab chevy 3500 long bed. Decided to install one of those unihoists so it could dump. Ran into the same bumper/hitch/spare tire issues. Solved those problems best i could with what I had. Was thinking I could be a middle man and install these for locals. Set-up the web site to market them, got incorporated again.
In August 2003 a guy from Canada called, wanted one for the '99-up short bed Chevy model. OK, I'd never sold one of those before, I'll call my distributor and get you a price. Nope, they don't make one. Huh? Why not? Hoist won't fit under the bed. Damnit. Mind if I try it myself? Nope, go ahead. So I called the guy back, told him the deal, he said, if you can build one I'll buy it, nobody else has one.
I went out and bought a 2001 GMC short bed and tore it apart. Decided to solve all the bumper & hitch problems as long as I was doing it. Came up with alot of unique and revolutionary ideas then built the first one with a machine shops help. After it worked I knew i had something I could offer the public. I got it patented in US and Canada.
I only market on the internet and every part I can't buy off the shelf I make myself in my 1500 sq.ft. machine shop. At first i subcontracted the machining and welding, but the quality was so poor i had to scrap alot of parts. Plus I was paying way too much for the labor and materials mark-up.
I kept getting calls & emails for every truck under the sun. I couldn't afford to pay the shops to do R & D and evolve the design. I bought my own machine tools and trucks to measure for prototyping. My goals were to make the best dump kit at a reasonable price, that would last, AND be easy to install. That meant all bolt-on with no welding or wasted effort. It shouldn't be frustrating once you get it. I put together as much as I can here, so I know it's right, and it saves you time.
Since we sell to the northern states, we switched to alot of stainless steel components. We also powdercoat rather than spraypaint. Nothing worse than lifting your bed and the stuff you put on a month ago is rusting. No excuse for saving 20 cents on a nut.
General Motors Performance Division called me in Feb. 2006. Said they wanted a unit to fit the new style Silverado. I am the only guy on earth who could do it. The truck was introduced in Las Vegas Nov. 2006 at the SEMA show with my system on it. We got alot of interest since it was placed next to Little E's red truck.
I'll write more later.
05-01-2008, 04:24 AM
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WOW! What an amazing ride you have had so far! That is just so outstanding! I love your business adventure story! It seems like you are non-stop creative and always thinking bigger and bigger!
I also think it is fantastic you were involved with lawn care and landscaping and you took off from there. It seems landscaping and lawn care can be a great spring board to even bigger businesses.
I'd love to hear more of your insights.
When you look back at your lawn care business, what would you attribute to the growth you found?
What did you do to market and advertise your landscaping business?
What do you think you did differently that your competitors didn't?
05-01-2008, 06:21 AM
Thanks for the complements. The way to growth is honesty, hard work, and no compromises on schedule and quality. Always keeping your customer engaged and in the loop. Keep a photo album for references during the quote phase. If you use a laptop, bring it, write the proposal and print it out with portable printer. Beats the heck out of a hand written estimate. Spend extra time to explain everything to the customer. Don't expect them to know anything.
Most important, look professional, respectable and trustworthy. First impressions are what lands the high value contracts. Don't show up in a torn & dirty tee shirt with a week of beard and offensive odors. Have an employee dress code. Make #### sure your guys don't smoke on the job and leave butts behind.
05-01-2008, 03:05 PM
Did you have any guidance when you were getting your lawn care business going? Was anyone else in your family running a business? Or any friends?
Where do you feel you learned all the skills to be so successful?
Also, what business owners do you find inspire you today?
05-01-2008, 03:52 PM
Nobody i knew was running a business, I had to learn as I went along. I knew enough about how not to do things to keep me out of trouble. At the same time my employees were always a liability because they had their own ways of doing things when out of sight. One of my best foremen used to say "there's a right way, a wrong way, and OUR way". If you don't fully explain the WHY we do it like this to your guys, they won't ever get it.
I've been through my share of disasters. I look up to people who can take a bad situation and work through it to success. If nothing is happening, you've got to get out there and make it happen. Nobody is going to just drop a job in your lap. Once you gain a clientele, you work your butt off to keep them. If you don't get repeat customers, it's not their fault, it's yours. You're doing something wrong when all your work is new customers, better step back, figure out what it is, and fix it.
One thing I came up with to help was a customer job audit form. After everything was done and we were gone, each customer got an audit form in the mail. I had everything on it I could think of in multiple choice and space to explain. You see these all the time now as online surveys. I used a light green paper for these and each one was posted in the office for employees to read.
Formen were responsible for their crews performance and appraisals. The mowing crew had a binder in the truck with each property to visit that day, and every service to provide. Small details that are easy to forget were in black and white with a check box. Arrival time and leave time was also recorded in case we needed that info later. Each binder was collected at the end of the day, the sheets were checked and filed, the next days were ready and installed.
If I felt the crew and formen were getting too friendly with each other, I'd swap them out. This kept everyone honest when it came time for breaks or lunch. I'd also have the foremen rotated between mowing, clearing, tree work, landscaping, and topsoil division. This is why several of my employees went on to become successful in their own right. They were cross trained and had experience you can't get anywhere else.
05-01-2008, 03:52 PM
That is an amazing story.
I am not sure what kind of backing you had when you started.
Many people start out in lawn care on a shoestring budget. I am quite conservative in business and taking on debt. For every success story like yours, there are 10 stories of great business plans going bust and the business owner winding up bankrupt.
We have had lots of discussion on this board concerning the correct circumstances to fund a business with debt versus starting small and growing into new equipment only when it is affordable.
I am sure you did not grow that large and that quickly without properly managing your financing.
Can you give the board some advice on financing a high growth business? How did you overcome economies of scale in the beginning? Did you buy in bulk immediately with a simple belief that the customers would come or did you base purchasing on customers already in the que?
Looking forward to hearing more:
05-01-2008, 04:44 PM
I was working third shift in a machine shop as a maintenance electrician. I bought the dump truck and financed the tractor. Dad fronted the money for the trailer because I lived too far away to drive the tractor on the road. The mowing deal started with dad's rider and a ramp to load it on my truck. As that grew I had to have Toro 44" walk behinds and push mowers. Also used a step van for the malls and apartments to keep things locked up on site. I bought equipment by re-investing profits. I called it laddering.
You want to do more work and reach the top of the ladder, you've got to start at the bottom rung. I bought used trucks and fixed them. In some cases I resold vehicles and equipment at a profit. I bought a brand new Chevy dump truck and sold it 45 days later for $5000 more than I bought it for! Why? Because they guys thought it cost that much, they didn't even check dealer prices. I still resell today with stumpgrinders. I own usedstumpgrinders.com
When I went to buy mowers, weedeaters and blowers, I made sure it was snowing outside or late December. Trust me, nobody is buying mowing equipment at Christmas. I'm convinced you can get the best deal on new or used stuff at that time of year. Try it if you think I'm nuts. Plus the dealers are trying to make the numbers for the year and move inventory. You want to buy mowers in the spring? That's nuts, there's no incentive to sell you a mower for 5-25% off when another guy will be there buying in an hour.
Concerning the larger equipment like the CAT 943 and Powerscreen, that's a whole book in itself. Those were financed purchases. Looking back I could've leased them and charged off more of the profits to reduce taxes.
05-01-2008, 05:45 PM
Concerning 'buying in bulk'.....the only materials i bought this way was tractor trailer loads of mulch. I had a site to dump it and load it on my own trucks or customer trucks. It was seasonal so we didn't keep much on hand in the winter.
I got into the topsoil business because I was getting jobs that required screened soil. I was selling someone elses product and they couldn't provide enough. There were two outfits locally that screened. One guy took off to florida for a month in April. The other guys were drunks and their equipment kept breaking down. Either that or they wouldn't show up for work even when I called in advance. I was stuck without materials.
I went to the larger sober operation and offered to be partners. I said: I'll buy a loader and hire an operator to load your screen and trucks. We'll work together and divide up the profits on a percentage basis. I've got to have topsoil year-round.
He wouldn't even consider it. That was like a slap in the face insult to me after puting up with both of the businesses for over a year. I vowed to myself to find a way to get back at them through their wallets.
A new housing development was under construction near me. They were building a golf course & schools for hundreds of houses. I started working for some builders doing grading, planting & seeding. They were not interested in buying topsoil to help the grass grow. However, the new homeowners were when it didn't grow.
When the road contractor cleared the land and cut the roads, they piled up soil on the school site. So I'm driving by this huge pile of dirt every day, yet can't buy any sifted materials. I got introduced to the developers superintendant by a friend. I asked what the plan was concerning the soil. He said it has to be moved, but they didn't have the money to truck it yet. I asked if he would sell me some, sure, no problem. Pay the corporation a dollar a yard, and the same to me to work out the deal and keep you out of trouble.
Hmmm, ethically that doesn't sound right. I told him I'd need a written agreement with the corp. allowing me to operate a screen, loader, and trucks in and out of the site for a year. If you can do that, I'll hire you as part time consultant at a dollar a yard. Within a week I had the agreement. We estimated the pile at 12,000 cubic yards.
I contacted Stursa Equipment and offered to buy a screen if they could find me financing. They got Orix to loan the funds and trucked my screen out in a week. I rented a john deere 555 track loader to start. In march of 90 I did that big ad and undercut the competitors prices by $1 a yard.
My first volume customer was the son in law of the guy who didn't want to be partners. He ordered 800 yards delivered because daddy went to florida...again. I promptly quit my night job.
A month into the endeavor the Cat salesman dropped by to recommend a different loader. Said he'll bring one demo unit out and I can drive it for a week. As soon as he dropped it off i called the rental company to pick up their junk.
I worked that CAT day and night for a week sifting everthing i could before I had to turn it back over. But money was flowing into the biz like mad. The guy made me an offer I couldn't refuse. Apparently the 943 was too small for most of the site contractors, and too big for everyone else. It fit my operation like a glove.
I sold half that pile by the end of summer and the other guys went hungry. The golf course started buying it, and then they brought in 1000 yard of sand that had to be mixed with peat & screened. I landed that work because I was on-site. I got all kinds of work out of just being there when they needed help. I even bought a hydroseeder to do spot jobs and around all the lakes. The trees started dying off, so we cut down 565 trees and ground out the stumps. My contracts with the developer were moving up to five figures each.
Soon I was selling soil to the city and federal government. Then I was doing golf course, landscaping and tree work on government property. The Air Force contracted me to do 110 stumps and build a driving range. The Navy had me filling holes and hydroseeding on top of weapons bunkers. The biggest job was a new parking lot on base where I had to sub out the asphalt work. Then we won a bid inside the nuke Q-area that was recurring for three years.
05-02-2008, 04:17 AM
That is such a great story. It's fantastic to see how you were able to see opportunities and jump on them.
From what I have seen, a very difficult time for a new business owner, especially one that is working at a fulltime job and then running their lawn care business on the side, is making that transition from running their business part time to fulltime and quitting their day job.
Do you have any advice as to how to make this happen?
When you were working fulltime, did you have employees for your lawn care business? Did they work during the day without you?
Or were you a one man operation until you quit your fulltime job?
Any insights you have would be greatly appreciated.
05-02-2008, 07:49 AM
When I was first starting I was a single man operation. *When I needed help I had friends from my night job work PT. *Later on I hired students seasonally. *As the operation grew I hired full time off the street using newpaper ads. *When the government contracting hit hard there was a scramble to get people because it was off season. *
Once the mowing season came I was fortunate to find college students who had friends. *These guys were responsible enough to be foremen so that operation went on autopilot. *The only time I had to step in was the weekly mall mowing on Thursdays or Fridays. *Mainly because I was charging $1,700 per mow and it had to be right. *I was able to sell my mowing business to one of these foremen in 1992.
I had a really good guy running the topsoil operation. *In early '94 that business was ripe. *I made it look too easy to make money. *Competitors started coming out of the woodwork. *I was able to sell it to a larger land developers sons. *They moved it north 50 miles. After the 30 day transition period I retired for about a year and did my home projects.
Speaking of selling your business, I have some great ideas for anyone considering that exit strategy. You should be planning for a sale from the moment you consider starting a business. Given i was able to sell my phone number for $10,000 and a 4 year non-compete agreement for $30,000, along with making 9% on the financing, why work?
05-02-2008, 09:02 AM
Do you ever miss the business? Or was it just something that was there and easy to get started?
Do you find what you are currently doing more interesting?
05-02-2008, 09:42 AM
I miss some aspects of the business, and glad to be rid of others. I spent the majority of my day on the road. When you've got people on the full time payroll, they're like your family. They count on you to feed them every Friday. You've got to go out there and find steady work to make payroll.
As President of the corporation, my work hours started at 6AM and ran to midnight with no time off. When i held my full time night job I arrived to work at 7:30AM with no sleep, worked until 5 or 6PM, got three hours of sleep and did it all over again. I caught up on sleep over the weekend if I could.
Make no mistake, when you run your own business, you better be prepared to work long hard hours. It's the same now except my road trips and scrambling between job locations is over. I also get to work under a roof in the machine shop rather than all weather conditions. Rain, snow & heat isn't a factor that slows me down. My hours are still long, but the payroll has shrunk and I don't have to deal with seasonal hiring.
Lawn & landscaping business is service related, and restricted to your local area. My business now is product related, and international in scope. So the sky is the limit, I'm only bound by my production capacity. That's why I only advertise on the internet, so my unit sales don't go nuclear. The general public doesn't yet know about this product. Imagine if it was on TV every half hour, or in your mailbox every month.
I'm trying to keep the size of this business manageable and slow growth. I don't want to be opening up 100,000+ sq.ft. plants in every country next month. Sure, with my background I can do it, but that means alot of things have to dovetail perfectly in advance, like venture capital funding and/or going public. Is it worth giving up ownership and control to advance the corporation? Yes, but I'll do it at my pace so the price is higher when it converts.
There are several reasons to start your own business. Most people do it for money and income with no thought of the future. Some do it to hand down to their children, who probably have ideas and goals of their own. Once you get to the five year milestone you should re-examine the future of the company and your own goals. Is it time to sell or go longer? Are you stuck for the rest of your life, or should you exit on high. In any event, you will be exiting the business sooner or later as you age.
05-02-2008, 11:11 AM
Did you ever have any desire, at the time, to expand the lawn & landscaping business? Potentially create a franchise? Or no?
05-02-2008, 12:28 PM
Yes, and I could've done that along the same lines as Chemlawn, lawn doctor, and trugreen. The problem would've been undercapitalization and competition. I still have ideas for that sort of business, but the barriers to entry into the industry remain. You've got to start from a very small local footprint, perfect your methods and systems, then expand.
As that expansion starts to become self limiting due to distances, the importance of committed employees is key. They've got to step up, take responsibility and develop an ownership mentality. Locating and motivating people to grow into this kind of position is critical for survival and profits, let alone expansion. I just have a hard time finding those kind of individuals in this world. To most the theme is "it's just a job, and as soon as I find something better, I'm gone".
05-02-2008, 12:31 PM
Do you think the franchise model at all resolves that issue? If they have to buy into it and have skin in the game, would they then want to put more energy into making it happen?
05-02-2008, 02:09 PM
I'm sure that will help motivate, but where are the guys going to get funded? You could offer a financing plan if it's allowed by the FTC. The main hurtle would be generating a UFOC that proves the case to buy a franchise. Your financials would have to be audited at least three years back. That means your cash jobs and income can't go into hip pocket national bank.
05-03-2008, 03:23 PM
That is a very good point. Some of my favorite franchise stories were Kinkos, which was a great book. When they got started, they created a business model that worked and then started having their friends take over surrounding areas and then it picked up steam from there. It was just such a fascinating read.
Also Fast Signs. WOW The way that happened, the guys that started it, just seemed like they had the midas touch. It didn't appear at all that they were even worried about their success.
Ray Kroc's story with McDonalds was amazing too. You wouldn't think that such a huge company had such a shaky start.
Do you have a favorite franchise? If so which one?
I think right now, my favorite is a Harley Davidson dealership although I am not sure if a dealership falls under the franchise umbrella.
Would you ever want to have your dump truck business franchised out? Could that work where you would have authorized installers around the country?
05-03-2008, 05:28 PM
Hooters and Outback are my favorite franchises.
I don't think my business will ever be franchised out to truck equipment installers. I had a list of qualified dealers off my website, but since I can't control their marketing or customer service, I removed it.
05-03-2008, 06:52 PM
What do you like about the Hooters and Outback franchises? If you could have created either one of them, would you have liked too?
05-03-2008, 08:55 PM
They overcame adversity to become successful.
05-04-2008, 10:37 AM
I haven't read anything about the entrepreneurs who started those companies. I am going to look into it though and see if there are any books on them.
05-04-2008, 02:04 PM
05-04-2008, 04:30 PM
Oh thank you so much! I never knew about that site and I love reading about businesses. I am going to check all that out now.
05-06-2008, 10:05 PM
....someone asked for some pictures of my truck lettering? Here's a couple photo's I scanned in over the weekend.
Here's a fortunate accident where the driver put it in the ditch when an old lady pulled out in front of him. I'm happy he missed her.
A little action with the hydroseeder before it got lettered.
That's me on top working the clutch, throttle, and nozzle. I never trusted anyone to keep the mechanicals within it's limits. That and if they broke it I had to not only pay for parts, but do the work for free also.
Tree trimming 55 foot bucket truck under renovation. This came in real handy over top of houses and down powerline right of ways. Also had a contract to do trimming along railroad right of ways and crossings.
Me on the backhoe doing concrete demolition.
My oldest at 6 or 7 getting some hours in on the training wheels.
05-07-2008, 07:46 AM
Oh those are great pictures! Did you buy the bucket truck and then do body work too it or were you just putting on a new coat of paint?
I bet your son loved to use the tractors. That seems like something every kid would dream of doing.
05-07-2008, 08:54 AM
The bucket truck was about the fourth truck purchased for the fleet. I bought it used and did the bodywork/paint to preserve the steel and make it pleasing to the eye. One great attachment was the PTO powered front winch. This was a power company truck so it had the fiberglass insulated bucket. Never paint over the fiberglass pole or run wires into the bucket. It could cause the bucket to become grounded thru the truck.
05-07-2008, 09:30 AM
I think all of this is a very good lesson for everyone reading. To be successful, you really need to be multifaceted. You need to be able to do a lot of things.
You need knowledge of how to do the service you are providing but also how to do bodywork. Paint vehicles. Fix mechanical parts. All of these things.
Don't be afraid to experiment and explore. Eric really has given us a lot of insight as to the skills he was able to utilize.
05-07-2008, 09:53 AM
You sure need to know how to work on lawn mowers. A friend of mine hauled his mowers into the local shop this spring for tune-up and oil change. I offered to do them for free labor just buy the parts. He waited three weeks and paid $65/hour shop rate. I did mine myself this year, he ended up hiring my son on my mowers for a week. So not only did his jobs get delayed, he had to pay shop rate and hire out the work.
You can't fix stupid.
05-07-2008, 07:08 PM
I wonder ultimately if a lot of that is just being afraid to learn to experiment.
Or maybe he just didn't want to impose on you, his friend.
05-15-2008, 08:28 AM
Thanks for the mention in the video.
05-15-2008, 11:37 AM
You are very welcome. I try to make the GopherHaul show an encapsulation of what is going on in the forum and then direct the viewers to the different posts, in the episode guide.
05-15-2008, 11:52 AM
Just an update on what's going on here....
We're a subcontractor source for Ford dump kits that fit 2009 F-250's. A Ford dealer in New York is submitting a bid to supply 17 dumping pick-ups to one of the county governments. The purchasing dept pulled the bid specs. from one of our competitors Ford product. They specify a 6,000lbs. capacity which is double or more the factory F250 payload. Our capacity is 3,700 which is about half ton more considering the installed weight of the kit.
We are going to argue the competitor specs. are out of line with the chassis and will void the truck warranty by default upon installation.
05-15-2008, 12:15 PM
Oh that is very fascinating! Let us know how this works out!
Have you ever experimented with other custom truck projects like lift kits for trucks or 4x4 conversions? Would that be anything you would be interested in?
When you go to trade shows, do you have a show truck that you put on display to show off your product? Were show trucks ever something that interested you?
05-15-2008, 12:28 PM
I'm constantly getting ideas for trucks, but I'm too busy and undercapitalized to pursue the products. If I had equity investors willing to put up the funds to patent my ideas and bring them to market it would be a load off my wallet.
I don't go to trade shows because I can't keep these kits in stock ready for sale. Everything is sold before I can even buy the steel to make them. I've got 10 weeks of work as our current backlog. Meaning, if you bought one today, it would show up 10 weeks from now.
Show trucks? Didn't you see them on our home page? There's four of them, one is a GM factory e85 show truck. First GM sponsored dumping pick-up in history. It was in the 2006 SEMA show at Las Vegas, then toured other shows.
05-15-2008, 03:44 PM
Quote[/b] ]I'm constantly getting ideas for trucks, but I'm too busy and undercapitalized to pursue the products. If I had equity investors willing to put up the funds to patent my ideas and bring them to market it would be a load off my wallet.
Is there a way at all to raise funding from lawn care business owners possibly that are looking to invest? Or from other customers you make this product for?
Quote[/b] ]Show trucks? Didn't you see them on our home page? There's four of them, one is a GM factory e85 show truck. First GM sponsored dumping pick-up in history. It was in the 2006 SEMA show at Las Vegas, then toured other shows.
Oh yes I saw the images, great pictures! I didn't know if they were show trucks that installed your product or your trucks that you use to promote your product.
05-15-2008, 04:01 PM
Quote[/b] ]Is there a way at all to raise funding from lawn care business owners possibly that are looking to invest? Or from other customers you make this product for?
No, that would be considered a solicitation of an unregistered security. I try to minimize my criminal activity down to going 4 miles an hour over the speed limit. I have no desire to spend even a minute in jail.
05-15-2008, 10:24 PM
Well, I don't know anything about that, but could you sell shares to raise funding? Could you do this as a private corp or would you have to be public?
What would the difference be between selling shares and "that would be considered a solicitation of an unregistered security?"
Can you share some insight as to what an unregistered security is?
05-15-2008, 11:40 PM
Yes, I can sell shares with some qualifications. *I own shares in an S corporation registered in Virginia. *In order to sell them I have to follow the both the Federal Securities Act of 1933 and rules in this particular state. *I have to file a prospectus containing various information including audited financial statements. *Since I've been in business over three years the statement has to be current aged no more than four months old with a current balance sheet.
The above paragraph where "I" is mentioned means both myself and/or the corporation since we are somewhat joined but separate entities. *When I sold my prior corporation, the agreement excluded shares in return for all assets and my labor. *This allowed us to side step the rules by a certain extent since the securities were not exchanged. *Essentially the old corporation was allowed to die gracefully while it's assets were disposed of at a profit.
Corporations exist to shield the people behind their creation and operations from personal liability. *They are like a new baby but with responsibilities. *By the same token, should a corporation be very successful, then it can exist for eternity even though the founders are mortal.
Getting back to selling shares, it costs the corporation time and money to go thru the paperwork process. *The lawyers and accoutants that specialize in this area are very expensive. *Secondary to that, the existing shareholders ownership and control over operations become diluted or thwarted by greedy new shareholders. *Seldom can a new corporation escape everything going into micromanage mode because second or third parties want to get involved.
I'm not ready for getting grilled by shareholders on a daily basis about the corporations past, present, and future. *Neither do I need my financial statements examined by bean counters who's sole purpose is to cut costs that affect product R & D and quality. *If I say I need to use a high grade stainless bolt, I don't want a numbers guy telling me not to buy it. *Too many cooks spoil the soup, then I get a bill for their unwelcome services.
One of my competitors was convinced to go public on a national scale about a year ago. *The sharks who did the deal approached me first. *I turned them down flat so they found him instead. *The scam is called "reverse merger" and involves a shell corporation that is regstered to sell securities, buying your corporation. *The false promise is access to investors and cash to continue or expand your business. *What happens after the deal is totally different. *These shareholders in the shell put out a bunch of PR and press releases, sell every share they can in days, then leave you to go bankrupt. *So you can check off load hog industries from my list of competition.
Not happening here.
Some reading material on reverse mergers:
05-16-2008, 11:55 AM
Very interesting stuff! Is it possible to have two classes of stock, one with greater voting power than others? So you could theoretically sell one class of stock and then still own the stock with the voting power?
I don't know how that works exactly, but if that were possible, then couldn't money be raised while you still held control of the business and if a shareholder wasn't happy, all they could do was sell their share?
05-16-2008, 12:52 PM
At the present time I only have one class of stock. Here's a quick glance at the two classes of stock that might answer your questions.
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