Direct Public Offerings & Crowdfunding

A photo of the Bulgarian First Investment Bank...
A photo of the Bulgarian First Investment Bank from Sofia, 2006. (Photo credit: Wikipedia)

Obviously this is not our standard review style post, we believe that in order to keep ahead of the crowdfunding trend we must devote a section of our site to Direct Public Offerings (DPOs). Going forward we will be researching and reaching out to firms that provide services allowing small companies to raise capital form the public without the expense of a Wall St. investment bank.
Over the last 25 years Direct Public Offerings have ebbed and flowed in both quantity of offerings and success with which those offerings have been received. Our belief is that with the growth of social media, crowdfunding coming mainstream and the passing of the JOBs Act, Direct Public Offerings will finally get the recognition they deserve as a cost effective and democratic means of raising capital for small business.
Over the next few weeks we will be providing reviews of various DPO service providers. The combination of Direct Public Offerings and crowdfunding will in our opinion eventually be the “winner” from the JOBs Act by combining the established secondary markets with the cost effective benefits of an equity crowdfunding style platform hosted directly on the issuing companies website.

 

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Securities and Exchange Commission has approved a proposed amendment

Seal of the U.S. Securities and Exchange Commi...
Seal of the U.S. Securities and Exchange Commission. (Photo credit: Wikipedia)

 

NEW YORK, Oct 17 (Reuters) – The U.S. Securities and Exchange Commission has approved a proposed amendment from Wall Street’s industry-funded regulator that helps investment banks use a new U.S law aimed at easing the way for small companies to go public.

 

Six months after the JOBS (Jumpstart Our Business Startups) Act was passed amid much fanfare as a way to help companies raise money in public markets, banks have not embraced some key provisions, which allow analysts to join bankers on pitches to investors, and publish research reports before a company goes public.

 

The new amendment from the Financial Industry Regulatory Authority, effective immediately, eases the restrictions somewhat by aligning rules of the financial watchdog with those of the JOBS Act. The SEC approved the amendment on Oct. 11.

 

The rule change removes the previous 40-day quiet period after an initial public offering so underwriters can publish research. The change would also allow analysts and bankers to attend IPO pitch meetings or “bakeoffs” together, as long as the analysts don’t solicit business.

 

However, the FINRA change involving communication between analysts and their investment banking colleagues does not apply to Wall Street’s largest banks, bound by a separate regulation, the Global Research Settlement.

 

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