Beware: You Might Be The Cause For Your Capital Failure

12 Mistakes Often Made

Perhaps, one should put themselves under the microscope when then are seeking capital for here are 12 mistakes often made in the “Quest for Capital!” First and foremost, always remember that “Cash is King” – always for without it, failure might be the only option. As one of my business teachers once taught me the definition of a business: the 3 C’s – Cash, Cash and Cash for one needs it to start a business, manage a business and then one often forgets that in the final analysis you must turn your investment into Reality – make money and then exit if that is your objective or provide for its continuity if one wants to continue building his EQUITY! Without cash, the costs for success might be one’s most expensive lesson!

Second, and equally important, is the fact that one’s success in seeking Cash might be oneself – your EGO, Appearance, Commitment and Presentation! Do not come to a meeting improperly dressed and wearing your Ego on your sleeve. Listen and learn well as to why you are being denied “the Opportunity!” Further, your presentation might also be too long in content, not focused and rambling in content or just missed the Boat! Here, most people forget to crystalize what the Opportunity is – the how’s of what differentiates your from competition. Too often presenters do not have at the beginning of their presentations the Twelve Reasons, yes – 12, for that makes one think harder and not just state the typical explanations as to why one should invest.

Now, here’s comes the Challenge: Number 3 – “I versus We.” We shows a Team Approach – I shows vulnerability and dependence on one person. I also tells of one’s ability to share in the Rewards. Remember the Bill Gates/ Microsoft Story – he probably made more millionaires in seeking Success than anyone else in U.S. Corporate History and that is more than likely the reason for becoming the “world’s wealthiest man.”

Next – Number Four, the Approach. Make sure your business model makes sense yet also defines one’s capital needs with the proper supporting documentation. Yes, that means the ability to put forth and independently analysis assumptions used to create one’s Business Plan. Then, comes Number 5: the Risks Factors which lawyers always state in any Offering of Capital and sometimes include the “kitchen sink.” Here one should think “outside of the Box!” A Presenter should look at his opportunity from the other side of the table and put under the microscope as if he were investing his last penny. Number Six is where most investors request “too little capital” in order to avoid ownership dilution which oftimes is a necessary part of one’s costs. Probably, Howard Hughes had the best insight here: tell me what you need and I will multiple it by 1.5 in order to accommodate customer miscalculations (“anticipation revenues”), production problems and the ability that cash provides which is the longevity of a business.

Numbers Seven, Eight and Nine are inter-related. These include: anticipated investor returns, market investment capitalization analysis – who is in the industry and what is the range of success for results, and what are reasonable investment returns. Too often presenters oversell their opportunity here and present themselves as if the “sky has no limit!” Just remember, Number Ten, it is how an Opportunity is managed that creates the Return! Number Eleven then follows: keep your investment presentation: Simple and Stupid, the KISS Philosophy, so your audience can understand it and doesn’t have to be an Einstein to understand it.

Lastly, Number 12, if “I” invest “X”, how much do I need to invest, what is the range for my Capital Return and how soon can I get my money back – the when and Greed Factor” for everyone likes to tell how smart they were, taking home the “Bakery of Monetary Rewards.”

These are just some of the lessons that I have learn as a senior expert in the Capital Markets and becoming one of North America’s leaders in the corporate middle market in “how to be successful in seeking capital from a results oriented approach.”

Take a look at M Line Holdings, Inc., (Symbol: MLHC), an “under valued” opportunity coming through a “definable” operational turnaround , where Bruce Barren is the Chief Executive Officer, to see how the Rules of Capital have been positively implemented! Mr. Barren is also Chairman of The EMCO/ Hanover Group (

Are you looking for a qualified Court Expert Witness Specialist?

Try EMCO/Hanover ( for their specialists have been accepted by the U.S. District Courts, various State Courts, the I.R.S. and the U.S. Tax Courts in regard to:  Wrongful Terminations; Executive and Fiduciary Responsibilities; SEC; Trusts and Estates including Wealth Succession; Executive Compensation and Litigation plus Contract Labor Disputes, both at the Federal and Corporate Level – Expert Witness; Capital Transactions; Business Practice and Responsibilities; Corporate Governance; Labor Contractual Disputes plus Bankruptcies and Creditor Reorganizations – Chapter 7 and 11.

Contact Bruce Barren, Emco/Hanover Chairman, for more information.

Discounting the Value of Publicly-traded Stock and Getting the IRS plus the SEC to accept it.

An Unique and not impossible Result !

There are 6 guideline references used by EMCO/Hanover, which the SEC and IRS have accepted, that can be used in valuing stocks in a publicly-traded company. These are explained on EMCO/ Hanover’s website ( where a 60% discount was used and accepted in two specific cases involving compensation for a Company’s Officers and Directors and also as compensation to an independent contractor for services rendered. Perhaps, they might be useful for you. If so, click here.

Need an Industry Specialist?

Try then EMCO/ Hanover (www.emcohanover) and using one of its Specialists for they have been qualified as experts by both the I.R.S. and the U.S. Tax Courts in the following industries: professional standards – including accounting, banking and broker/ dealers; conservator and trust officer responsibilities and standards; aerospace; apparel and textile; SEC regulatory issues, including reporting, corporate governance and fiduciary responsibility; banking and finance; consumer products; defense and government contracting; direct marketing, including multi-level and e-commence; electronics; employment policies and procedures; energy – gas and oil; food: processing, distribution – wholesale and retail; furniture and accessories, including hardware manufacturing; printing and graphic arts; publishing: magazine and newspapers; media and entertainment; medical, including hospital, nursing care and elder living residences; mining; paper: manufacturer and distribution; real estate: commercial and residential; social media and transportation, including automotive and truck assembly and distribution.

For more information, please contact Bruce Barren, Chairman Emco/Hanover Group.

Give Thought To Company Owned Life Insurance (COLI).

Have you ever given thought to setting up Company Owned Life Insurance (COLI) for the benefit of both of your company  and your employees.

Try EMCO/ Hanover ( for it  was one of the first sponsors (and is often referred to as the “Inventor of COLI”) of Company Owned Life Insurance (COLI) when it first introduced the concept to George R. Vila, the former Chairman and President of Uniroyal, in the very early 1970s in tandem with Northwestern Mutual Life Insurance and one of their then agents, Phil S. Pohl, a New Yorker by residence but a South African by birth.

Continue reading Give Thought To Company Owned Life Insurance (COLI).

Are You Looking for a Court Qualified Expert Witness?

Look then at EMCO Hanover ( where a  cross section of involvements include those related to the Tax Court and Chapter 11/7 situations, with the following companies and a brief description thereof: (1) court-appointed expert under a Chapter 11 proceeding for Rocket Industries, automotive parts and importer of exercise equipment re: inventory accounting procedures under GAAP standards plus (2) Bongo Jeans (Tom Trading); (3) Westward Ho Markets, as expert witness re: various union contract wage and benefit concessions; (4) Tokai Credit’s expert, re: Team Nissan, automotive dealership under a Chapter 7 proposed liquidation plan; (5) U.S. Computer Systems, Inc., financial services, cablecasting-as an expert witness in a divorce matter regarding valuation of a deceased spouse’s business, where the estate and prior, the ex-husband held the proxy thus gaining 51+% equity control; (6) Wilshire Industries, Inc., fireplace accessories, under a Chapter 11 proceeding; (7) Jeffrey, Corigan v. Smouse, Pistole in a determination of damages opinion; and (8) Maxon Industries, Inc.–transportation equipment, under a Chapter 7 “exit” petition; (9) The Matter of the Mark Hughes Family Trust, case number BP063500, in the Superior Court of the State of California, County of Los Angeles.

Continue reading Are You Looking for a Court Qualified Expert Witness?

Are You Looking For a Compensation Specialist?

Perhaps, EMCO/ Hanover has the required credentials that you seek?

Try, EMCO/Hanover ( for its specialists have authored various articles on executive compensation plus given testimony as a compensation specialist before the United States Tax Court (i.e.: L&B Pipe & Supply Co., Inc., wholesale/plumbing and irrigation supplies; Lumber City, a wholesaler and retailer of building products; and Norman Wright Mechanical Equipment Corp., a representative for various manufacturers of heating and air conditioning equipment) plus Cellceutix Corporation (trading symbol: OTC:CTIX), an IRS disputed matter regarding stock received as compensation for services rendered.

Continue reading Are You Looking For a Compensation Specialist?

Are You Looking For a Wealth Management Specialist?

Perhaps, EMCO/ Hanover ( can meet your needs for in 2014, The EMCO/ Hanover Group added another dimension to provide quality service to our client base through HK Wealth Management, Inc.. (“HK”), which is a Registered Investment Adviser, located in the Westwood section of Los Angeles .  Like EMCO/ Hanover other Group Members, HK’s motto is:  THE ANSWER IS YES!  What this really translates to is a dedication to help clients achieve everything that they believe can be attainable.  While returns are never guaranteed, we believe that nothing is impossible…it just takes diligence and hard work!   Most people hear the word “NO” whenever they ask a question or have an idea.  Such negativity is ingrained in our collective psyche. Not to us!  EMCO/ Hanover has made a conscious decision to use positivity [hence the word: YES] to distinguish itself from the rest of the business community.  These simple words have become our hallmark.

Contact Bruce Barren at EMCO/Hanover Group for more information.

Discounted Cash Flow Method of Valuation Short Comings

The short comings of using the Discounted Cash Flow Method of Valuation.

This is another valuation method used to estimate the attractiveness of an investment opportunity. However, the shortcomings in the use of Discounted Cash Flow (DCF) analysis is that it uses future and often very difficult to measure free cash flow projections and discounts  for they most often using the weighted average cost of capital to arrive at a present value, which is used to evaluate the potential for investment. If the value arrived at through DCF analysis is higher than the current cost of the investment, the opportunity may be a good one.

EMCO/ Hanover’s advice is: be aware that the Discounted Cash Flow Method (DCF) does have shortcomings. DCF is merely a mechanical valuation tool, which makes it subject to the axiom “garbage in, garbage out”. Small changes in inputs can result in large changes in the value of a company. Instead of trying to project the cash flows to infinity, terminal value techniques are often used. A simple annuity is used to estimate the terminal value past 10 years, for example. Remember that it is harder to come to a realistic estimate of the cash flows as time goes on.

Because of the above,  EMCO/ Hanover (see: rarely uses this method and only when there is a definable and projectable flow in earnings as is often found in real estate and “quality” tenant occupancy. Also, understand that industries do have volatility and cycles (i.e. real estate), thus is often difficult to predict. Further the stability of historical earnings should always be taken into consideration plus changing consumer preferences along with any emerging competitive new technology in today’s world as was mistakably not done in the automobile industry. Here there were also considerable pressure exerted from the energy industry which had a material impact of the industry itself.