Download Now you can invest in high-growth companies just before they go

Now you can invest in high-growth
companies just before they go public
Ground Floor Capital (GFC) is offering the unique opportunity to invest at private valuations in highgrowth companies before they go public. In other words, GFC is providing its investors with an
opportunity to buy stock at effectively wholesale prices (pre-IPO) before they get listed on a North
American stock market.
The pre-IPO (initial public offering) market has generally been perceived as an insider’s club, reserved for
only the wealthy and well connected – and for good reason. Traditionally, pre-IPO investment
opportunities have been marketed to wholesale investors, high net-worth individuals and investment
funds. The ability to invest in a business before it goes public has given them opportunities for gains that
the average investor has not been privy to...until now.
Focusing on emerging markets, GFC seeks to identify companies that have profitable, easy-tounderstand business models, and that have demonstrated an ability to grow their revenue by no less than
25 per cent annually.
Our investment assurance
Our investment structure ensures that our investors’ success is paramount at all times. To
maintain the upmost level of integrity with our investments, we earn our share of the profit after
each investor has received a complete return of their investment. In effect, “we make money if
you make money.”
Typically GFC invests alongside its investors under the same terms and valuations, therefore,
investors can rest assured that all of the due diligence has been performed to the most stringent
standards.
Types of companies GFC invests in
GFC sources emerging market companies that are seeking investor-funding in order to become
traded on North American stock markets. There are four main criteria each company must
possess in order for GFC to consider it for an investment:
1.
The Company must be established, significantly-sized and have at least $40,000,000 in
revenue. These companies are not start-ups and have typically been in business for five
or more years.
2. The company must demonstrate consistent annual growth of no less than 25%.
3. We are targeting Chinese companies that are focused on domestic consumption. With
China’s middle class expected to double in the next decade from 300 million to 650
million, we’re looking for companies that are feeding that market.
4. We are looking for companies that are seeking the final round of financing, which would
propel them to access North American capital markets. We believe that partnering with
companies that are at this point in their business makes GFC’s investment timeframe
much shorter, and their return potential much higher.
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CHINA GDP GROWTH RATE
The Gross Domestic Product (GDP) in China expanded 2.3 percent in the third quarter of 2011 over the
previous quarter. Historically, from 2011 until 2011, China's average quarterly GDP Growth was 2.15
percent reaching an historical high of 2.20 percent in June of 2011 and a record low of 2.10 percent in
March of 2011. China's economy is the second largest in the world after that of the United States. During the
past 30 years China's economy has changed from a centrally planned system that was largely closed to
international trade to a more market-oriented that has a rapidly growing private sector.
Source: www.tradingeconomics.com
CHINA GDP PER CAPITA
The GDP per capita in China was last reported at 2425 US dollars in December of 2010, according to the
World Bank. Previously, the GDP per capita in China standed at 2208 US dollars in December of 2009. The
GDP per capita in China is obtained by dividing the country’s gross domestic product, adjusted by inflation,
by the total population. Historically, from 1960 until 2010, China's average GDP Per Capita was 561.84
dollars reaching an historical high of 2425.47 dollars in December of 2010 and a record low of 72.32 dollars
in December of 1962. This page includes a chart with historical data for China's GDP Per Capita
.
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Key points to consider when buying private and going public
Generally, companies try to maximize their value as a private company in an effort to bring the
most value to their shareholders. Typically, private companies sell at valuations much lower than
public companies do. Normally, a private company will be valued at three to five times their
earnings. Since 1990, the range of P/E ratios for the S&P 500 has been a low of 4.78 in 1920 and
a high of 44.20 in December 1999.
Over the last several years, many Chinese companies have become publicly traded companies in
the US. It has been possible to purchase excellent businesses in China for 4 or 5 times earnings.
As seen in the chart below, public companies that conduct the majority of their business in China
trade for a much higher multiple than private companies.
This chart is a random sample of publicly listed Chinese companies that have positive earnings. A
P/E ratio can be misleading for a number of reasons but a large sample demonstrates that public
company valuations are much higher than private company valuations.
Source: Bill McNarland Exempt Analysis Report – July 26 2010 – Please Click HERE to access the full the report.
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Why private companies choose GFC
Companies within emerging markets are attracted to GFC’s business model, as it streamlines the
process of becoming listed on major North American stock exchanges – avoiding timeconsuming, expensive and difficult roadblocks along the way. GFC’s approach is affordable and
fast, and has the additional benefit of drawing upon North American and international investors.
How GFC invests in private valuations before a company goes public
Ground Floor Capital and its investors provide the final round of financing for high-growth
companies before taking them public in North American markets.
A word from our CEO on GFC’s due diligence process
“At Ground Floor Capital, we take our investments very seriously. Our investment structure ensures that
our investors’ success is paramount at all times. We believe this is a testament to our commitment to
make your capital grow. Through a number of sourcing partners and advisors within China, we find
companies we want to invest in. We practice full due diligence with each potential company, ensuring
they meet our investment criteria.
The company must be established, significantly sized, and have at least $40 million in revenue. These
companies are not start-ups and have typically been in business for five or more years. They are each
required to provide US GAAP audited financial statements produced by an accredited accounting firm.
Our companies to date have demonstrated consistent growth of more than 25 per cent each year and
each company we consider must have, or hire an English-speaking, western educated CFO.
Once we have decided on a company to invest in, our investments go through a very specific process in
order for us to take them from being private companies to being reporting issuers, allowing them access
to the North American capital markets.
We have been told that our platform is very compelling, and we agree.
Firstly, we are able to participate in emerging markets, and then we get to invest at private valuations
before companies go public – and yes, it does have the potential to earn “oversized returns.”
I always emphasize the importance of diversification, encouraging folks to not put all of their eggs in one
basket. Many of our investors choose to allocate an amount they would like to invest in the GFC
opportunities and then invest it equally over three to four private placements over a 12 – 18 month period.
Investing in private equity should be part of your portfolio, along with your real estate, stocks and other
income investments.
We are excited about the promising opportunities that exist when investing in high-growth companies just
before they go public, and think you will be too.”
–
Dave Steele, CEO Ground Floor Capita
Hear what our investors have to say about working with GFC…
“You now have a solid investor willing to support any of your upcoming opportunities…I am 2 for 2 with Ground
Floor Capital, thanks guys for the opportunity. What’s Next?” M. Basas – Sechelt BC
“I attended an information session in Calgary several months back and decided to invest. I am very excited about the
potentials. It takes a great team to drive a bold vision. Awesome platform, highly recommended” P. Jarman –
Calgary AB
“I have known GFC’s CEO, David Steele for many years and have always done well with his investment opportunities.
David, as always, has found a unique and profitable investment strategy here. Keep em coming Mr. Steele!” B.
Elkington – Vancouver BC
Please Read The Ground Floor Capital Disclaimer – www.groundfloorcapital.com/disclaimer.aspx
“Your presentation was one of the best from all the presenters at Invest Fest in Vegas. After talking to David after his
presentation, we are convinced that your investment opportunity is the best that money can buy. We are action takers
and invested with you after we came back from Vegas. We are looking forward to a long and lasting relationship”. G.
Wolff – Vancouver BC
“Like many investors we had our doubts but based on the results we were able to double our money in only 5 months.
We are now believers! And are eagerly awaiting the next 2 deals to go public.” F. Wolff – Scottsdale AZ
“I have known David for 15 years, I highly respect his business sense and based on his personal due diligence my wife
and I choose to invest. After reviewing the platform, I realized the complete potential and decided to become more
involved.” Ric Harris
Corporate Office: 604-980-8460 or email us at
[email protected]
Please Read The Ground Floor Capital Disclaimer – www.groundfloorcapital.com/disclaimer.aspx