PIPE DREAMS and nightmares

DRAFT -- COMMENT PLEASE

Q: What is the difference between the Pink Sheets and the Otcbb?
A: The method of dumping on the OTCBB is way more veiled and sophisticated...

On the Pinksheets, the pumpers use 504 offerings, and distribute a bunch of free shares to their buddies and promoters and sell these shares directly to the public. On the bulletin board, it's a little more sophisticated and wholly accepted.

Most start up companies raise money from friends and family, then angels, then venture capital, then if they are lucky through the public capital markets.

Existing companies with revenues and profits can access growth capital by issing debt, selling to equity, issuing a secondary offering, etc.

Failing companies raise money with PIPES. The problem with PIPES is that the risk reward proposition is out of alignment. Companies that are controlled by a majority...