Starlight provides various services to its corporate clients throughout North, Central and South America.

Starlight is a boutique, middle-market investment bank and M&A/corporate finance consulting advisory practice in the financial marketplace of the Americas for profitable, middle-market, private and small public companies seeking equity capital.

The firm connects a network of institutional investors with its private and small public company clients. It believes that it provides value to both sides of the investing equation; increased deal flow and syndication opportunities to institutional investors and decreased marketing costs and enhanced exposure for those clients needing expansion or buyout capital.

Starlight on the Financing Spectrum

Investment Banking

Funds raised are usually in the $5 million to $50 million range. Representative client industries include communication/IT, energy, real estate (REITs), banks and distribution/logistics, especially in the medical field. Starlight team members are registered (only registration allows professionals to do this legally and provides certain disclosures for their clients). Typical clients are profitable and have annual revenues between $5 million and $50 million. Starlight provides services during three distinct phases of our engagement: pre-money, fund raising and post-money.

Pre-money (Mentorship)

Raising money is time consuming and involves special skills and knowledge. The pre-money phase ensures that Starlight's clients appreciate the expectations of potential investors, articulate their business's value proposition on paper and in person, and understand the process of raising money. Companies that try and fail to raise money, often undervalue the importance of pre-money preparation.

Some clients can do a lot of the work themselves, supervised by Starlight staff. Others are lightly staffed and hire Starlight as a full service firm. Services include the conceptualization, review, editing and development of the Company's work in the following areas:

• Pre-funding due diligence
• Business model (competitive advantage, sustainability, milestones, gaps)
• Technology strategy and implementation plan (proprietary, patented, products, services)
• Management and succession plans (management team's bios, relevant experience, needed expertise, presentation)
• Financial models (historical / projected financials, income statement, balance sheet, cash flow)
• Strategic options for a potential sale, acquisition or merger
• Financial or marketing presentation materials
• Partner identification, domestic and international (particularly in North, Central and South America)
• Strategic advice to the Company and its Board members
• Introductions and relationship building with potential investors, venture capitalists, investment bankers, and other important stakeholders
• Sponsorships at investment conferences or seminars
• Financial research reports and market making activities (outsourced)
• Investor oriented documentation and correspondence
• Planning and execution of launch events (parties, dinners, etc.)
• Industry white papers, press releases, articles, and speech writing
• Webcasting and taped interviews for marketing and promotion.

Fund raising

The fund raising portion of the engagement consists of identifying and presenting the client to qualified institutional investors and obtaining the funds. Starlight has several unique resources for its clients. These include a network of institutional investors, equity conferences in which clients present to an invitation-only audience of investors, and behind-the-scenes services to increase client effectiveness at each meeting.

Post-money

A successful fund raising round increases options. Does the client want to go public? Raise another round? Be acquired? Grow organically? Starlight works with its clients to explore the potential and pitfalls of short-term and long- term options. Starlight is paid by retainer for pre-and post-money services and secures a retainer, warrants and success fees to raise money. Occasionally, Starlight principals invest small sums in their clients.

Measuring Our Progress

We portray our competitive position through the use of the Value Curve. The Value Curve came to our attention from a group of M.B.A. students at Rice University's Jones Graduate School of Administration and was originally developed by Chan W. Kim and Renee Mauborgne ["Creating New Market Space," Harvard Business Review (January-February, 1999): 84]. A value curve is a graphic depiction of a company's relative performance across its industry's factors of competition. The firm's value curve is plotted on the same graph as the industry's value curve. The horizontal axis represents the range of factors of competition in the industry and the vertical axis represents the offering level that buyers receive across all the key factors.

Our research has identified the following factors as important for our industry. We have plotted our relative position on it.

• Cost of Funding. This is a measure of the fee rate that an external financing source would charge for raising capital. Whereas the cost of our services is not as low as our prospective clients desire, it is still, on average, less than that of our competition.
• Industry Connections/Expertise. This category represents the quality and extent of industry contacts that an investment firm can provide. The roughly 50,000 members in our network is, we believe, one of the most extensive actively-managed networks in the industry.
• Investor Contacts. The ability of an external financing firm to gain access to potential investors and close and fund deals on a timely basis. We have been very fortunate to be able to draw on our extensive network of potential investors to get appointments for our clients, however, their ability to receive financing on favorable terms is a function of the strength of their business plan and management team.
• Reputation. This is a measure of the brand name of the financing company or source. A strong reputation is demonstrated by a strong track record of successful deals and a desire by entrepreneurs and investors to do business with the company. It is a measure of experience, particularly financial banking experience, and trustworthiness. Due to the extensive industry experience of our representatives, many of whom have long Wall Street resumes, we believe that we are more competitive than our regional and local peers.
• Due Diligence. This is the process through which an external financing company will evaluate and verify the financial information of a specific company desiring funds. This information is used by companies to help with marketing with its deal as a solid investment. Investors look to the due diligence process to provide a sense of security for their investment. Please see our sample due diligence template. Although each situation requires additional and case-specific investigation, we believe that we do a thorough due diligence investigation on each company that engages with us.
• Adding Value to the Management Team. This is the ability of an external financing firm to provide consulting advice to its clients. This category could also reflect a firm's ability to recruit additional talent to join the company being financed. Most of the professionals on Starlight's team have either run or managed companies themselves and, therefore, know quite a bit about how to add value to a management team.
• Product Services. These are the different types of products and services that an investment bank could provide. Starlight has a small, focused offering of services that match the actual experiences of its team members.