PRINT Signature does not work with struggling companies. We dedicate our strength, expertise and energy to businesses poised to accelerate with Signature Capital's support. Signature Capital has a very different start-up investment model than do most all other Venture Capitalists (VC's). While different, our model is rapidly gaining followers. By the end of 2007 we expect to have structured capitalization in excess of $100 million for five of our sponsored companies through our network of high net-worth individuals, private equity hedge funds and corporate venture funds.
Signature Capital VC's
  • Very early-stage start-ups.
  • 4-5 deals per year.
  • No fund.
  • One time capitalization structure.
  • No traditional management fees.
  • No syndication.
  • Later stage start-ups.
  • 10-20 deals per year or more.
  • Funds.
  • Multiple tranches.
  • Annual fees, large portion of investment returns plus closing fees.
  • Syndicates and other large structures.

We manage fewer early-stage deals so that we can focus our time and energies into putting our real-world operational expertise to work for our sponsored companies, skills that most VC's do not possess or have the time to apply. Because one of Signature's key thesis points is to have a close and direct relationship with our sponsored companies, Signature Capital will not syndicate the financial model, but will act as a singular contact for initial and ongoing financial matters. Management knows every member of our staff and how to access resources directly and immediately. Unlike traditional VCs, we do not take the 2% to 3% annual management fee on invested or committed money in a fund, nor do we take up to 30% of our investors' returns that a VC will typically claim as a "carry." As part of Signature's paradigm shifting philosophy, deal structure is "standardized" to enhance efficiency. Please contact us for further detailed information. Founders like the Signature Capital approach for a number of reasons, including: At the outset of a new deal we judge what a start-up company will need to be successful in their particular industry and structure the capitalization accordingly. We believe strongly that this approach significantly reduces the financial "cramdown" risk of the start-up and allows management to focus on building the business. Signature's financial management also allows the companies to hire more skilled but perhaps less risk tolerant staff than is possible otherwise. The VC multiple tranche method frequently falls short of its promise of higher valuations at subsequent raises as more often than not companies are raising additional funds at a point in time when they are facing technical or other business problems. In fact, VCs get most of their deals from companies with strong business ideas that are experiencing these types of temporary problems but do not have the capital to see them through. If a company does need additional capital for some unforeseen reason, Signature Capital stays the course. In the case of biotech deals it is not uncommon for these companies to require larger amounts of capital in order to see that type of company through the clinical trials process. Signature Capital has a strong following because we offer, in one creative package, important incremental benefits for all constituents (founders, employees, investors, "who's who" directors and customers) contrary to traditional Venture Capital models. The capitalization structure, post full-money, on an issued and outstanding basis would typically look like the following:
Founders 35-40% Common
Signature 10% Common
New Investors 40-50% Preferred A
Who's Who Board / Advisors 4% Common

Series A Preferred stock, which Signature Capital also invests side-by-side with our investors, typically has weighted average anti-dilution price protection and preference improvement features should there be future funding required at different terms, assuming the shareholder has fully participated by exercising their warrants. In addition Series A holders also have a two-times-your-investment liquidation preference. On the upside, warrants are attached to every share purchased with an exercise price less than twice that of the original share price and rights to purchase additional shares of any future raise to preserve ownership percentages, except in the case of an IPO, strategic partnership purchase, warrant exercise, etc. Signature's capital structuring model provides unique incentives for all levels of accredited and institutional investors with pricing and warrant grants specific to the timing and amount of each investment. Please contact Signature for a detailed explanation in order to determine what will be most suitable to meet your investment objectives. As an added benefit to all involved, we look to sponsor start-ups that have at least one new market application for the first company's technology in yet another multi-billion dollar market where the technology can also change the way that second industry does business. An exclusive license to use the technology for use specifically for that new purpose is granted. In return the first company receives a cash payment as well as approximately 30% of the spin-off's stock, on an issued and outstanding basis which is distributed to the shareholders. In the end, the Founders keep a higher ownership percentage of their company and shareholders, both large and small, whether high net-worth individuals, hedge funds or corporate venture funds, receive a fair and significant portion of the company at a fair price, with a cramdown resistant capital structure.