In April ([Article link]) Bob Clyatt asked if incorporating 50-50 with his Chinese wife would disqualify their company from the potential benefits of minority-owned status. An insider warns:

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When ownership is 50-50, the SBA may rule "negative control" because if, say, you're on the board of directors, you could block her corporate actions with your 50% stake.

Do your own marketing before you attempt to use minority status as an asset. If you try to use it as an entrée, it becomes a liability.

Robert Nicholls

Assistant District Director for Minority Business Ownership

Small Business Administration


Bill Tabler was looking for guidance in drafting a preliminary-offering prospectus (Prospectus Perspectives, March, [Article link]). A deal maker, fresh from a similar draft, advises:

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I've spent six months putting together a Regulation D document, and the easiest way is to structure it around your well-annotated business plan. Just omit anything that, in the business plan, refers to the expected return on investment.

Our adviser also suggested we keep the whole document shorter than 10 pages and include a table of contents noting that detailed charts and appendixes are available on request. Don't bog investors down with extras unless they ask.

If you don't already have a one-page executive summary, write one up. It doesn't have to be fancy, just focused.

Robert Kelly


Kelly Green Environmental Services

Exeter, N.H.