Nearly 2 years ago in 7/15; our IR firm disclosed a flat and deferred annual fee rate alternative for comprehensive PR/IR customer relationship management (CRM) of contractual clients. This rate is contingent on the client being approved by a payroll finance or CRM accounts receivable (A/R) funder.
Now let’s compare just how much cheaper the above rate option is to phony “success fees” contingent on borrower being capable of meeting funding approval criteria. Especially when investors nationwide reject 95% of all dealflow due to the 4 reasons; incoherent, conceptual, deceptive, and NO skin in game.
An IR firm is in effect a public relations firm (PR). But pretending an IR firm was just a simple broker and there is no other fee on Wall Street but commission; then the national average is sliding scale to transactional valuation. This is called the Lehman Formula. Our IR firm commission rate from ABL transactions that close inside 30 days ranges from 1 to 10% (per) transaction. The higher the valuation is the lower the commission. The commission for a $100M+ (per) each ABL transaction is 1% or from $1M.The smaller the transaction is the larger the commission up to 10%.
The contrast is that the flat and deferred fee rate is NOT contingent on each transaction or task rendered. Instead it applies for all tasks rendered by however many people it takes to do the task(s) during 1 year. These tasks include SOMOCLO, algorithm and telemarketing, advisory services, analysis, government relations, & commercialization of technology to name but a few. One exception is asset management services which are derived on the national 2/20 rate. That’s 2% of AUM and 20% of profit generated. Asset management and IR support are 2 different things.
The monthly rate disclosed on the FEE OPTIONS page of our company website is a flat $25K. The annual rate therefor is 25 x 12 or $300K; or 70% cheaper then a single transactional traunch of $100M. This still does not take into consideration that transactional fees or commissions can be REPETITIVE during a year.