Brad Armstrong of Blue Whale Movers said the SCOR is an option for him while organic growth, venture capital and banks are not options because he has a big goal that would take a large amount of cash. He and his partner had already exhausted their own cash reserves, the profits from the Austin location were not great enough to take away and apply to another location, the banks are too cautious and the venture capitalists and angels wanted to own at least 40% of the company if they were to invest. By doing a SCOR, Brad offered just 10% of equity in the company to a number of individual investors.

Topic for discussion: Why would an investor buy stock in a privately-held company?

Answer: To make money and for a sweet tax break. A big part of figuring out if the SCOR is the right vehicle for you is determining if the investment would be attractive to others. Remember, there is no secondary market for SCOR investments. If you buy stock in a publicly traded company listed on a stock exchange, you can sell it when the price goes up or down and you want to divest yourself of the investment.

Not so with investments made under a SCOR. There have been several attempts to develop a secondary market based on SCOR offerings, but they have all collapsed becase the numbers are too small --too few businesses, too few brokers, and such little numbers -- the fellows in the big market just think it's a waste of time.

Individually, it could work for you if you are able to provide the investor with a return, e.g., a proposed dividend schedule and an exit strategy. The investor's exit is tied to yours. Ultimately, do you intend to sell the company? Go public? The investor will require answers to these important questions and a timetable to evaluate the investment opportunity.

Topic for discussion: What does it take to execute a SCOR?

Answer: Unlike the initial public offering (IPO) under the Securities and Exchange Commission (SEC), a complicated, expensive process, the SCOR is under your state's Securities Commissioner; and by comparison, it is a fairly inexpensive and straightforward way to go public.

David Porter said you need an attorney, an accountant and a stock broker. Tom Stewart Gordon estimated a total cost of about $30,000. The IPO process costs well over $1 million in underwriting, legal and accounting fees. If you are interested in investigating a SCOR further, start by obtaining the downloadable SCOR issuer's manual, SCOR, Small Corporate Offering Registration, How to Complete the Question and Answer Disclosure Document for Your SCOR or Reg. A Filing from the website of the North American Securities Administrators Association at http://nasaa.org.

This 100+ page manual has a soup-to-nuts description of what you need to know about the application process. Here's an excerpt from the beginning of the issuer's manual: "Part I of this Manual informs you of the general requirements to use and file the Form U-7, called the "SCOR Form."

Part II of the Manual provides specific directions on how to fill out the SCOR Form. Once completed, the SCOR Form may be filed as the main disclosure document for offerings being registered in all states accepting SCOR." Part II has a separate section for each of the 50 questions of the Form U-7, making it a user friendly document when a number of different people contribute to the preparation of the prospectus. You could answer some of the questions yourself while employees and/or outside consultants answered others. That way you could minimize your cost and still produce a high quality disclosure document. At the same site, you can obtain the necessary forms for filing in MS Word, further facilitating the document preparation.

You think about it: Can you imagine having shareholders? What would you do with the money you could raise with a SCOR?