New Ideas in a Weak Economy

Karen E. Klein
Los Angeles Times

Look for opportunities to bring in revenue and cut costs where possible. For instance, if your cash flow decreases, look for innovative purchasing opportunities, said Estrea Dworkin Janoson, president of ProAd Solutions Inc. "Stock4Services.com allows you to use company stock to buy services such as nationwide advertising," she said.

Finally, don't panic. Smart businesses can turn a bad economy into a plus for their firms by taking advantage of lower prices and new opportunities for partnerships.

How to Earn a Hundred Million Dollars or More

NewsUSA

The deal, which was later reported by major news media around the world, did not portend much initially. It was struck in 2005 between a high school dropout with a history of petty thefts and a little-known startup with no revenues. The latter wanted the former to spray paint graffiti on their office walls. The former brazenly asked for sixty thousand dollars -- an astronomical fee in graffiti business; the cash-strapped startup countered by offering him its shares, which had no market value.

Seven years later, the company, no longer a startup but the largest social network, went public. That very day, the Facebook stock received by David Choe, the graffiti painter, turned into liquid assets valued at more than two hundred million dollars. As the stock price has been climbing, David's network exceeded half a billion dolars.

This remarkable rags-to-riches story is now prominently featured on Stock4Services.com, deployed by renowned KMGi Group to facilitate similar investments of services into emerging growth companies.

"There's over a quarter of a trillion dollars per year of unsold advertising inventory in the USA alone, which could be invested into promising businesses," says Alex Konanykhin, CEO of KMGi "Yet broadcasters and publishers let it perish instead of investing in promising businesses that seek visibility. It's a colossal waste, and we seek to correct it, generating tens of billions of dollars of value."

Stock4Services also facilitates investments of other kinds of services, including online and outdoor advertising, visibility at major events, product placements, celebrity endorsements, public relations, programming, design and creative services. While no one can assure returns as high as in the Facebook example, investments can be quite secure, especially if made into VC-funded or public companies.

"Companies invest trillions of dollars in the stock market," says Jay Baguioro, president of Stock4Services. "We provide them with opportunities to invest their services, without having to sell them for cash first. It makes the market more efficient and allows for faster wealth accumulation and economic growth."

Stock4Services' website lists some additional compelling examples that support their premise.

Rapper 50 Cent accepted stock from the company behind Vitamin Water in exchange for his endorsement in 2004. When Coca-Cola bought the company four years later, his after-tax earnings exceeded $100 million.

The stock that actor William Shatner received in exchange for being a pitchman for Priceline in TV commercials has risen to over $600 million.

Canadian geologist Chuck Fipke holds about a billion dollars in stock due to the work he's done uncovering diamonds in the country's Northwest Territories.

And now Stock4Services facilitates such deals to all service providers and advertising inventory owners. "We take a standard agency commission in the form of the stock of the transaction, so we only make money when our investors make money," points out Jay Baguioro. "It motivates us to seek investment opportunities with the highest and fastest return."

New company provides beneficial bridge to

emerging businesses and service providers

By David Wilkening
Editor, Chicago Star-Tribune
For SyndicatedNews

A new Manhattan-based company offers help to both cash-strapped start-ups and publishers with unsold ad space.

The funding problem has long been a thorn in the side for startups. The odds of surviving the first two years in business are sometimes compared to the chances of surviving a trip over Niagara Falls in a barrel. “While poor management is cited most frequently as the reason businesses fail, inadequate or ill-timed financing is a close second,” says a U.S. Small Business Administration report.

"At the same time, publishers often are faced with unsold ad space. Some publishers solve the problem by drastically reducing prices or giving ads away", says Raynaya Valles, a consultant who works with joint venture companies. “Let’s face it: if the ad is unused, you have made zero dollars,” he says.

"We offer a publisher a way to accumulate equity in fast-growing companies in exchange for unsold advertising space. At the same time, emerging companies will be able to make their products known nationwide without any cash expenditure. It’s a mutually beneficial situation for everyone," says Alex Konanykhin, CEO of Stock4Services.com.

Registration in Stock4Services is free for service providers and allows them to search the database of small cap public companies and promising start-ups to determine where they want to fuel growth in exchange for equity. “Our company lets many types of service providers leverage their excess capacity by exchanging it for valuable equity in emerging companies,” says Konanykhin. He points out that even a small piece of an early-stage venture can result in huge windfalls down the road.

On the other end of business, at Stock4Services.com, for a modest monthly fee, emerging companies can promote themselves among hundreds of media publishers and qualified service providers who are interested in trading ad space and other services in exchange for stock. Participants are guaranteed privacy and Stock4Services pledges not to share their information with others.

How to Beat a Recession

Nevada Business Magazine

The dreaded ‘R’ word is making the suppertime news, the dollar is in a free-fall and consumer spending is slowing to a crawl — a bad news combination that has struck fear into business owners across the nation.

The good news is that there’s a silver lining in all the doom-and-gloom statistics: studies of previous recessions have shown that smart businesses can turn a bad economy into an advantage. The trick is not to panic.

Here’s how you can recession-proof your small business:
  • Use high-return marketing techniques. While your competitors are slashing their advertising budgets, you are redirecting your resources to results-oriented campaigns such as public relations. Publicists will work to get your business in print, on radio and on TV at a fraction of the cost of an ad agency campaign. For example, Publicity Guaranteed pioneered the pay-for-results-only PR system, saving small business owners thousands of dollars in fees they would have paid an ad agency for a campaign that failed to bring results.
  • Spend smart. Look for innovative ways you can buy the services you need to succeed. For example, Stock4Services.com, a “services for cash” facilitator, gives emerging businesses a vehicle with which to boost their profile — and their profits — without spending cash. Save money by using your company’s stock to acquire the nationwide advertising you need through the Stock4Services.com.
  • Increase conversion rates on your website. Advertising and publicity allow your company to get noticed, but what happens once you get customers to your online site? Try increasing its effectiveness by adding interactive components to your website. For example, KMGI.com shows business owners how they can turn their websites into dynamic multimedia presentations of how their product works.
  • Create a distinct advantage. In marketing terms, it’s called a Unique Selling Proposition, something that sets you apart from your competitor. Once you’ve decided which product or service would be considered essential during bad economic times — remember, consumers will cut out non-essentials — target your marketing efforts to your USP.
  • Be an optimist. According to an old Chinese adage, “When strong winds are blowing, some hide behind walls and other build windmills.” Remember that many smart businesses became successful during market shake-downs caused by recessions.

Boulder County Business Report

Business Report Staff

Attention startups: Can't afford to advertise?

Attention publishers: Want to get in on some of the venture capital action?

Stock4Services can provide answers to these questions.

Their service makes it possible for publishers to invest unsold advertising space into emerging companies that need to connect with a national audience. In return, publishers' equity investments will multiply once these companies achieve their full potential.

Companies wanting to advertise join Services4Stock. Publishers search the Services4Stock database for companies they would like to invest in.

Registering at Stock4Services.com is free for publishers. Stock4Services only receives a commission from a closed deal, in the form of stock from the same company.

"Companies invest trillions of dollars in the stock market," says Alex Konanykhin, chief executive of the New York-based company. "We provide them with opportunities to invest services, without having to sell them for cash first. It makes the market more efficient and allows for faster wealth accumulation."

Swap shop: exchanging equity

for professional services

Smarta

What happens when you give shares to another business?

Back in the halcyon days of the dotcom boom, a nice little trend evolved that cut through the airy, overinflated fads of the day. Start-ups reluctant or unable to sell great slabs of their equity to drooling venture capitalists instead gave shares to businesses that could actually help them grow, in return for that company's services. What usually happened was some creative spark with a big idea for a website gave shares to a development business. And the development team would work hard to build a top-notch site in the hope it would pump up the value of their shares. Things worked out pretty nicely for both parties: the business founder didn't have to spend a dime and the development company got a good chunk of equity in a potential next-big-thing.

This idea of swapping equity for professional services outlived the dotcom boom, expanded to all types of B2B businesses, and is still going strong in the U.S. today. Websites such as Stock4Services.com are dedicated to matching up suitable parties. Big advertising agencies and media companies have set up programs specifically to facilitate the exchanges. And you only have to browse top U.S. small-business websites Entrepreneur.com and Inc.com to find examples of new businesses adopting the equity-for-professional-services model.

Scanned version

D.C. Firms: It's Time To Take Stock

Aversion to Trading Work For Client Equity Fading Fast

Legal Times
By Vanessa Blum
Monday, April 3, 2000

Caption: Stocking Up: Arent Fox has entered a stock-for-fees deal with KMGI.com, founded by Alexandre Konanykhine and Elena Gratcheva (above). Partner Richard Gale (right) says such deals can have a “tremendous upside”.

Excerpt:
East Coast law firms once viewed owning stock in clients as a risky enterprise, limited to those crazy California lawyers and small-town practitioners.

No more.

As it turns out, those crazy firms in California haven't gotten sued. But they have gotten rich. This is, after all, how business is conducted in the New Economy. And D.C.-area firms are worrying less about getting too close to their clients and worrying more about being left behind in an increasingly competitive legal market.

There are two major ways law firms can acquire stock in client companies - by paying cash like other institutional investors or by taking the more controversial path of trading their legal services. Local firms are suddenly doing both.

Since January, D.C.'s Shaw Pittman; Hogan & Hartson; Piper Marbury Rudnick & Wolfe; and Akin, Gump, Strauss, Hauer & Feld have launched venture investment funds for firm attorneys.

At those firms and others, including D.C.'s Arent Fox Kintner Plotkin & Kahn and Dow, Lohnes & Albertson, partners have decided to aggressively pursue equity interests in clients in exchange for legal representation.

"The attraction is obviously the tremendous upside you can realize if the company is successful," says Arent Fox partner Richard Gale, chairman of the firm's financial management committee. "The firm can realize incredible returns, gains far greater than regular hourly fees."

Case in point: In 1999, Palo Alto, Calif.'s Wilson Sonsini Goodrich & Rosati saw its equity stake in client Webvan Group Inc. soar to $51 million on the company's first day of trading.

Last week, Arent Fox, announced it was taking equity in New York-based start-up KMGI.com - a Web advertising company owned by Alexandre Konanykhine, Elena Gratcheva, and Nikolai Mentchoukov - in lieu of legal fees. About six similar deals are under review, according to firm chairman Marc Fleishaker.

"It's really no different from taking a contingency case. If it works, then it comes out great, just like a contingency fee. And if it's not successful, you take a hit," Fleishaker says. "If it's a transaction as opposed to litigation, I'm not sure that makes a difference."

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Equity For Time

Growing number of local law firms taking equity in start-ups

Washington Business Journal
Jake Richardson, Staff Reporter

Caption: Alexandre Konanykhine, president of New York-based KMGI.com, agreed to give an undisclosed equity stake in his company to D.C. law firm Arent Fox Kitner.

Excerpt: The Washington law firm is providing services for Konanykhine’s 18-month-old start-up, KMGI.com, in exchange for equity in his company.

Arent Fox and KMGI represent a growing group of start-ups and lawyers who are swapping stock in Internet start-ups - a commonplace practice among Silicon Valley firms - for legal services in the region.