Midwest Crowdfunding Conference

 

Join IPOvillage, Managing Director and Mayor, Howard Orloff at the Midwest Crowdfunding Conference on Friday, November14th at One Financial Place, 440 S. LasSalles St. Chicago, IL (Second Floor). The conference includes an impressive list of Speakers and Panelists covering Reward/Donation Crowdfunding, Crowdfunding Campaign Promotion, Real Estate Crowdfunding and Equity Crowdfunding. The event will begin at 9am, kicking off with Keynote Speaker Daryl Montgomery followed by speakers and panelists including Rose Spinelli of The Crowdfundamentals, Elena Mikhaylova from Crowdfund Productions, Jon Goldberg of VCapital and Howard Orloff from IPO Village.
The Full Days Agenda is available Here

We encourage everyone with an interest in any of the crowdfunding areas being covered to join us at the Midwest Crowdfunding Conference. There will be ample opportunity to meet with the experts either during the midday break or at the reception following the event at 5:30pm.

Howard Orloff will be available to discuss not only IPO Village but opportunities that are presenting themselves in every corner of the crowdfunding industry. They include crowdfunding platform and service reviews, as well as crowdfunded securities research.

We hope to see many of our friends and followers at this very exciting crowdfunding event.

 

 

Why the IPO “experts” are wrong

Those who study the history of financial markets learn one thing: When all the “experts” agree, they are wrong.

That’s the case with the naysayers who are looking at 2013 to be an even flatter year for Initial Public Offerings. 2012 was down from 2011 and the experts say the financial condition of the United States and the world have not improved enough to make the market pick up.

“Gau, Ritter, and Zhu [authors of a paper “Where Have All the IPOs Gone"] expect the JOBS Act and other regulatory stimulus efforts to have an inconsequential impact on IPO activity and think we are unlikely to see the number of deals return to the levels seen in decades past,” states a report in SeekingAlpha.com , an investment website.

What these men almost overlook is the Jumpstart Our Business Startups act. JOBS promises to cut through the red tape that hinders small businesses from going public to raise needed capital. The three authors do acknowledge the JOBS act, but they believe it will have no effect on the IPO market. These men are not accustomed to dealing with smaller businesses. Since their focus is on giant corporations, they are not able to see the small companies.JOBS was specifically created for the small businessman who flies under the radar of the world’s financial giants. The innovations they create, which previously had to be shopped to existing giant tech companies, can now be developed and marketed by the creator.ACCESS MATTERSWhile the US led the IPO market by a large margin in 2012, the decline will hold, Hazem Ben-Gacem told the Wall Street Journal in the article “U.S. Has Biggest Slice of Slower Deal Market.” Mr. Ben-Gacem is the head of European corporate investment for Investcorp, an investment firm with offices in London, New York and Bahrain. “The one advantage with slow IPO markets is that, typically, only the best companies come forward and give it a try. A successful IPO in current markets requires some good timing and a compelling story for investors.”

Again, as a financial firm, Investcorp has little experience in dealing with companies that employ 20, 10 or fewer people, the very kind of company JOBS targets.

Such small companies do not have the existing financial resources to “ante up” to the big tables for an IPO. They simply cannot afford to spend tens of thousands to possibly $1 million on lawyers. They are also not willing to let giant industrial investors buy the stock at a discount and turn around to sell it to the public at a substantial profit.

While good timing and a compelling story are very important, just getting access to investors is more important. You can have the best idea in the world and the timing be perfect, but if you can’t get capital, it’s not going to matter.

TECH TALK

The WSJ’s MarketWatch also talked to Deutsche Bank officials which said tech companies are going to be particularly slow. Chris Dieterich reports “Several factors have cast a pall over technology IPOs, Mr. [Ted] Tobiason said. For one, investors remain soured from a disappointing third-quarter earnings season, even as tech giants gear up to report fourth-quarter numbers in the weeks ahead. Weak earnings in the tech sector could act as a deterrent in the IPO market because potential issuers would likely get lower valuations. Tobiason is managing director of equity capital markets at Deutsche Bank.

The key words here are “tech giants.” Again the small picture is lost as the experts stand back to admire the expansive vista created by the giants. In the rush to talk about tech stocks, everyone seems to forget that tech advances come from one person or a small group of people, even from within a giant company.

Look at Apple, Google and other tech giants on the block. They all started small. Steve Jobs and Steve Wozniak almost didn’t manage to start Apple because of the problems at the time in attracting capital investors. Today, with the JOBS act and the IPO marketplace the way it is, they’d find raising money a much easier task.

Just as a single candle may not shed much light, a thousand, a million candles can light an opera house. Small business IPOs are going to be those million candles lighting up the financial world in 2013.
We firmly expect the upcoming IPOs of 2013 to turn the negative trend that has been impacting the small-cap IPO market for the past few years. The market needs to work to understand the JOBS Act and the positive impact it can have on the US equity market system.
Additional Crowdfunding Information

Upcoming DPO(s) will help bring about Equity Crowdfunding Rules

After reflecting on the event at Crowdfund Texas, I have come to the firm belief that the upcoming IPO(s) from IPO Village will encourage movement on the rules that will ultimately  govern equity crowdfunding. Equity Crowdfunding will bring about a new asset class that will have its own rules and regs from both the SEC and FINRA. The Direct to Public Offerings (DPO) being presented on IPO Village are a natural intermediate step to this new asset class. Unlike the traditional definition of equity crowdfunding, the offerings shown on IPO Village are not private equity offerings. They are in fact companies that are going to be publicly traded and include all the benefits that come with that status. Two of the benefits from the perspective of the investing crowd are the facts that these companies will have filed S-1′s that have been approved by the SEC (standard investor protection as exists under 1933 securities law) and an established secondary market (The issues stock will trade on the OTC market).
This actually resolves two of the biggest concerns surrounding equity crowdfunding, the first of course is the disclosure (investor protection) being offered by companies seeking to acquire capital through equity crowdfunding, the second being, once you own a piece of a privately held company how do you liquidate the holding. There will ultimately be a secondary market for equity crowdfunded offerings, the question is when. Under the JOBS act you are required by law to hold that investment for a minimum of one year, this is not the case with a public offering.
The updated and fully functional version of IPO Village will be available over the next few week. This will include an investor education section and many features to ensure the crowd has access to the same level of detailed information as the “professional” IPO investor. All SEC filings and disclosures will be made available to the crowd in one easy to find location, as well as business plans, video’s and financials for the companies being presented for DPO (Direct To Public Offerings). Unlike any IPO we will have seen you will have an open forum to discuss the offering with other members of the crowd and have the opportunity to “Ask the CEO”. These questions and answers will be made available to the crowd. You can’t get that kind of transparency on any other platform.
Once the power and intelligence of the crowd is proven through the success of IPO Village, it will speed the change to private equity offerings via equity crowdfunding.
The updated site will be available at www.IPOvillage.com , Signup to take your place in line for the democratization of the IPO process. Signing up is not a commitment to invest but it is the only way you will have the opportunity to decide.