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Flawed Market Structure Exacerbating the Great Wealth Divide
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Flawed Market Structure Exacerbating the Great Wealth Divide

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This power point illustrates how flawed market structure exacerbates wealth disparity and how the JOBS Act is helping to narrow it by transforming our capital markets and creating an abundance of new …

This power point illustrates how flawed market structure exacerbates wealth disparity and how the JOBS Act is helping to narrow it by transforming our capital markets and creating an abundance of new opportunities for smaller issuers and investors to create wealth.

Published in: Economy & Finance, Business
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  • NOWSTREET SYMBOLIZES THE CAPITAL MARKETS OF TOMORROW AND THE HOPE FOR A MORE PROSPEROUS ECONOMIC FUTURE. WE ARE STARTING TO BECOME KNOWN IN FINANCIAL CIRCLES FOR OUR COMMITMENT TO REPAIRING A DAMAGED CAPITAL MARKETS SYSTEM WITH THE INCLUSION OF A PRIVATE COMPANY MARKETPLACE THAT ENCOURAGES LONG-TERM GROWTH INVESTING WHILE FACILITATING CAPITAL FORMATION, SMALL BUSINESS EXPANSION, INNOVATION AND JOB CREATION. TODAY YOU WILL LEARN HOW THE FUSION OF NEW LEGISLATION, ADVANCEMENTS IN MASS COMMUNICATIONS AND A GROUND-BREAKING MARKETPLACE FOR PRIVATE COMPANY STOCK IS DEMOCRATIZING THE CAPITAL MARKETS AND CREATING A NUMBER OF NEW OPPORTUNITIES CREATE WEALTH.START BY EXPRESSING MY SINCERE GRATITUDE FOR YOUR PARTICIPATION IN TONIGHT’S EVENT AND FOR JOINING US IN OUR MISSION TO FIX THE MARKET ‘S STRUCTURAL PROBLEMS SO THAT WE CAN RESTORE THAT WEALTH-CREATING ENGINE THAT ENABLES TO AMERICA TO PROSPER.
  • WE ARE ESPECIALLY GRATEFUL TO OUR SPONSORS FOR PROVIDING THE RESOURCES THAT MAKE OUR EVENTS POSSIBLE. AND FOR HAVING THE FORESIGHT TO REALIZE THE SIGNIFICANCE OF THE PRIVATE MARKETS IN CAPITAL FORMATION AND GROWTH INVESTING. THANK YOU FOR ALL YOU DO FOR THE SMALL BUSINESS COMMUNITY AND INVESTING PUBLIC. AND I’D LIKE TO PERSONALLY THANK YOU FOR BELIEVING IN US AND FOR SUPPORTING OUR VISION OF A FAIRER AND MORE FUNCTIONAL MARKET SYSTEM.
  • I’D LIKE TO DEDICATE TONIGHT’S EVENT TO OUR LEGISLATORS INCLUDING CONGRESSMAN SCHWEIKERT WHO WERE ABLE TO PUT POLITICS ASIDE AND COME TOGETHER TO PASS THE MOST ECONOMIC RESTORATIVE LEGISLATION IN MODERN HISTORY.
  • OUR JOB TONIGHT IS TO HELP YOU UNDERSTAND HOW THE JOBS ACT IS RESHAPING OUR FINANCIAL MARKETS SO THAT YOU CAN SUCCESSFULLY RAISE CAPITAL AND MAXIMIZE RETURNS IN THE NEW ENVIRONMENT.
  • HERE ARE SOME KEY COMPONENTS OF THE JOBS ACT THAT OUR EXPERTS WILL BE DISCUSSING TONIGHT.2 KEY COMPONENTS OF THE JOBS ACT WERE INTRODUCED BY CONGRESSMAN SCHWEIKERT & HE WILL BE HERE SHORTLY AND WILL PROVIDE YOU WITH GREATER INSIGHT AS TO HIS INTENT .MOST OF THE MEDIA COVERAGE OF THE JOBS ACT HAS BEEN FOCUSED ON NEW OPPORTUNITIES FOR THE SMALL ISSUER. WHILE THAT IS REALLY IMPORTANT TO THE DISCUSSIONS, I REALLY FEEL WE NEED TO FOCUS ON HOW THIS LAW WILL IMPACT THE INVESTOR. BECAUSE EVERYONE IN THIS ROOM - WHETHER YOU ARE A BUSINESS OWNER, ATTORNEY, CPA, INVESTMENT BANKER, WEALTH MANAGER – IS AN INVESTOR. WE ALL WORK HARD BUILDING A NEST EGG TO ULTIMATELY ONE DAY RETIRE. AS INVESTORS, IF WE’RE NOT ABLE TO ACCESS GROWTH INVESTMENTS, THIS IS WHAT OUR RETIRMENT WILL LOOK LIKE…
  • LET’S FACE IT, THE MAJORITY OF TODAY’S AMERICAN WORKER S ARE PAYING INTO A SOCIAL SECURITY SYSTEM THAT WON’T BE THERE WHEN THEY ARE READY TO RETIRE
  • WITH SOCIAL SECURITY GONE AND MOST OF THE INVESTING PUBLIC ONLY ALLOWED TO INVEST IN THESE TRADITIONAL PUBLIC ASSETS. TODAY’S AMERICAN WORKER WON’T BE ABLE TO RETIRE UNTIL HE/SHE IS 145. AND BECAUSE WE’RE NO LONGER ALLOWED TO DRINK 64 OUNCE SODAS, WE’LL CERTAINLY BE LIVING THAT LONG!$3.7T IS SITTING IN IRA ACCOUNTS. 98% IS IN TRADITIONAL IRA’S WHERE THE HOLDER IS LIMITED TO INVESTING IN CONVENTIONAL PUBLICLY TRADED ASSETS LIKE STOCKS BONDS AND MUTUAL FUNDS – WHERE AS YOU CAN SEE OFFER VERY LIMITED GROWTH. THAT IS A LITTLE OVER $3.6T THAT IS BARELY BEATING INFLATION.  THE REMAINING $74B IS SMART ENOUGH TO BE IN SELF DIRECTED IRAS WHERE THE ACCOUNT HOLDER IS ABLE TO INVEST IN ALTERNATIVE ASSETS SUCH AS PRIVATE COMPANY STOCK, REAL ESTATE, HEDGE FUNDS, FRANCHISES.  I URGE YOU TO TALK WITH JIM JONES, OUR RETIREMENT EXPERT, TONIGHT. JIM IS THE DIRECTOR OF BUSINESS DEVELOPMENT FOR ACCUPLAN AND CAN ANSWER ANY QUESTIONS RELATING TO RESTRUCTURING RETIREMENT PORTFOLIOS TO INVEST IN ALTERNATIVE GROWTH ASSETS. HERE’S WHY THIS IS SO IMPORTANT…
  • OUR NATION IS AT WAR ARGUING OVER HOW TAX STRUCTURE IS CREATING THIS GREAT WEALTH DISPARITY. IT IS DIVIDING THIS NATION WITH CLASS WARFARE. YOU CAN TAX THE 1% 100% AND THE 99% 0% AND STILL HAVE GREAT WEALTH DISPARITY! WHY? THE REAL CRUX OF THE PROBLEM IS NOT TAX STRUCTURE – IT IS MARKET STRUCTURE!THIS IS WHAT HAPPENS WHEN YOU HAVE A GOV. THAT TELLS THE 99% THAT IT IS TOO STUPID AND POOR TO INVEST IN GROWING PRIVATE COMPANIES.
  • FACEBOOK’S CAPITAL FORMATION EXEMPLIFIES WHY THERE IS A MASSIVE WEALTH DIVIDE!REID HOFFMAN & FRIENDS: $5M IN 20045/05 - $100M4/06 - $550M10/07 – 50M USERS, MSFT INVESTS AT A $15B VALUATION5/09 – DIGITAL SKY HAS OPPORTUNITY TO TAKE ADVANTAGE OF DOWN MARKET AND INVEST AT $10B1/10 – PCM AT $14B3/10 – LOU KERNER REPORT6/10 – BONO INVESTS AT $24B FINALLY FOUND WHAT HE WAS LOOKING FOR1/11 – GOLDMAN SACHS BOTCHED PRIVATE PLACEMENT AT $50B6/11 – GSV2/11 – S1 FILED5/17/12 – 104BAL – AL GORITHMTHIS IS WHAT HAPPENS WHEN YOU HAVE A GOV. THAT TELLS THE 99% THAT IT IS TOO STUPID AND POOR TO INVEST IN GROWING PRIVATE COMPANIES. I WILL NEVER UNDERSTAND THE LOGIC BEHIND LAWS THAT PERMIT AVERAGE CITIZENS TO PURCHASE STOCKS ONLY WHEN “SOPHISTICATED” INVESTORS ARE READY TO DUMP THEM.
  • NASDAQ’S WILLINGNESS TO LIST THESE INNOVATIVE COMPANIES WHILE THE LARGER EXCHANGES BANNED THEM MADE THE GREATEST WEALTH PRODUCING ENGINE THE WORLD HAD EVER KNOWN!
  • THE PRIVATE MARKETS ARE THE NEW BLACK
  • THIS IS WHERE THE GROWTH COMPANIES LIVE TODAY. WHY? BECAUSE THIS IS WHERE INNOVATION IS ABLE TO FLOURISH.
  • THIS IS NOTHIG NEW. OUR STOCK MARKETS HAVE ALWAYS BEEN TRANSFORMING BASED ON INNVOVATION.
  • I have hypothesized is that it has been innovation in mass media that has long been the impetus for stock market growthRADIO – 1920s47 to 57Internet 1.0 IN THE 1990STHESE INVENTIONS HAVE FOREVER CHANGED THE WORLD AND ALL HAVE 1 THING IN COMMON: THEY HAVE ALL CREATED A MORE DYNAMIC WAY OF REACHING THE CONSUMER!TODAY’S SOCIAL & MOBILE REVOLUTION IS MORE PWOERFUL THAN ALL OF THE PREVIOUS INVENTIONS COMBINED AND IT WILL FUEL THE NEXT ECONOMIC EXPANSION ESPECIALLY IN CONJUCTION WITH SUPPORTIVE LEGISLATION AND A RISING UNTARNISHED LONG-TERM GROWTH MARKETPLACE
  • IT TOOK RADIO 38 YEARS TO REACH 50M USERS – IT TOOK CITYVILLE LESS THAN 3 WEEKSNOT BAD CONSIDERING IT TOOK MAN OVER 4M YEARS TO DEVELOP THE WRITTEN LANGUAGE
  • I REALIZE THAT THE OUTLOOK IS GRIMBUT DON’T BELIEVE EVERYTHING YOU READ IN THE TIMES ….THESE ARE NOT EVEN TODAY’S HEADLINES. THESES ARE THE HEADLINES FROM 1994 RIGHT BEFORE ONE OF THE GREATEST ECONOMIC BOOMS IN HISTORY
  • THE STARS ARE MORE ALIGNED TODAY THAN THEY WERE IN 1994REGULATORY REFORM – OPENING NEW OPPORTUNITIES FOR SMALL ISSUERS AND INVESTORSTRANSFORMING MARKET STRUCTURE – NOT RELYING ON DEPLETED FISCAL POLICYUNPRECEDENTED INNOVATIONNEW ERA OF MASS COMMUNICATIONSA RAPIDLY, EXPANDING SMALL BUSINESS SUPPORTIVE UNTARNISHED GROWTH MARKETPLACETHE FUTURE IS NOT BLEAK – IT IS FULL OF ENORMOUS PROMISE
  • Transcript

    • 1. ‘S EVOLVING CAPITAL MARKETS COCKTAIL EVENT New Legislation, New Markets, New Opportunities NEW YORK, NY JULY 30, 2012 HASHTAG FOR YOU TWEETERS: #financialmarketsreformDara Albright, Founder of NowStreetTwitter: @nowstreetwww.nowstreetjournal.comdsa@nowstreetevents.comhttp://facebook.com/nowstreetevents
    • 2. Sponsors
    • 3. DEDICATION“I am pleased to see the president signed the JOBS Act into law today. The American people deserve a government that upholds the principles of economic freedom and does not create harmful barriers to free enterprise and capital formation. For that very reason, the JOBS Act makes important progress giving job creators the freedom to achieve prosperity.” ― REP. DAVID SCHWEIKERT Tonight’s event is dedicated to our legislators including Congressman Schweikert who were able to put politics aside and come together to pass the most economic restorative legislation in modern history.
    • 4. Key Components of the JOBS Act Removal of the solicitation ban:  Allows public advertising and promotion of private securities offerings Enables “Emerging Growth Companies” (companies with annual revenues of up to $1 billion) to be exempt for up to five years from many of the financial control and reporting requirements instituted by the Sarbanes-Oxley Act of 2002 Raises the shareholder threshold from 500 to 2,000 before requiring SEC reporting  Allowing a significant expansion of private trading markets The legalization of “Crowdfunding” – raising money from large pools of small investors Raises regulation A private offerings from $5M to $50M
    • 5. The Harsh Reality• DJIA 2011 performance: +5.5%• Nasdaq 2011 performance: -1.8%• S&P 2011 performance: FLAT• Current yield on a 10 yr T-Note: 1.57%• Savings account interest: 1% (high-end)• Average yield on a junk bond: 6.95% • 2011 Inflation Rate: 3.2%
    • 6. Flawed Market Structure Exacerbating the Great Wealth Divide
    • 7. MSFT HISTORIC CHARTWhere theinvestingpublic hadtheopportunityto invest
    • 8. DELL HISTORIC CHARTWhere theinvestingpublic hadtheopportunityto invest
    • 9. MKT. VALUE AT IPO: $438M MKT. VALUE AT IPO: $58M MKT. VALUE AT IPO: $123M MKT. VALUE AT IPO: $52M MKT. VALUE AT IPO: $165M MKT. VALUE AT IPO: $188MMKT. VALUE AT IPO: $519M MKT. VALUE AT IPO: $226M •All IPO’d well under $1B in market cap (average: $217M) •Average raise at IPO: $37M •Combined market cap today in excess three quarters of a trillion dollars •Average 44,443% in investor appreciation •Employ over 500,000 individuals (532,860 as of February 2012) •Laid the groundwork for the next evolution of technological innovation
    • 10. “The Crown Jewel of Capitalism”
    • 11. The Small Cap IPO has been dying a slow death The 1990s The 2000sAverage Number of 447 102Annual IPOsMedian Market Cap $130M $1,094BPer IPO VCs PE Funds Accredited Pre-IPO Retail Hedge Funds
    • 12. There is no more meat in the public markets!
    • 13. The Private Markets The new black
    • 14. Where Growth Lives Today PRIVATE COMPANY VS. PUBLIC COMPANY GROWTH IN 2011590%490%390%290% PCM NASDAQ190%90%-10%
    • 15. Our Stock Markets Are Transforming Era of the social stock market
    • 16. The Social & Mobile RevolutionFueling the Next Economic Expansion NASDAQ +629% DJIA +517% DJIA +657%
    • 17. Days It Took To Reach 50M Users 14000 12000 10000 8000 13870 6000 4000 4645 2000 1460 1325 88 21 0
    • 18. “Every two days there is more information being created than between the dawn of civilization and 2003.“- Google CEO Eric Schmidt
    • 19. HOW DO WE CAPITALIZE ON THEINNOVATION OF THE DAY?
    • 20. Don’t Put All Your Eggs in One Basket
    • 21. Discover The Private Company Marketplace• Leading PCM Platforms: – GATE – SecondMarket – Sharespost• Private Share Desks: – GreenCrest Capital – Wedbush Securities – Emerson Equity – Liquidnet – du Pasquier & Co., Inc. – GFI Group• Emerging Pre-IPO Hedge Funds: – HighStep Capital – Magnolia Ventures – The Social Internet Fund• Publicly-Traded Funds: – GSV Capital – Firsthand Technologies
    • 22. Move to Self-Directed IRAs• Ability to invest in real estate, rental properties, LLCs, private stock, hedge funds, mutual funds, and stocks and bonds;• Increased control over investment strategies and decisions;• Maximize investment returns by gaining exposure to today’s fastest growing companies;• Diversifying outside the public markets;• As with all IRA investments, taxes on investment returns are deferred until funds are withdrawn from the account;• New Account Opener
    • 23. THE GRIM HEADLINES“Statistics Offer No Solace To Those in Jobless Line” – NY Times February 13, 1994“New Data Suggest Slow Economic Growth” – NY Times July 2, 1994 “More Hints Of Economic Slowdown” - NY Times August 31, 1994 “Pessimism Takes Hold On Wall St.” - NY Times September 22, 1994
    • 24. Regulatory Reform Transforming Market Structure Not relying on depleted fiscal policy A rapidly expanding, small-business supportive, untarnished growth marketplace Unprecedented innovationNew Era of Mass Communications
    • 25. New Legislation New MarketsNew Opportunities Dara Albright, Founder of NowStreet Twitter: @nowstreet www.nowstreetjournal.com dsa@nowstreetevents.com http://facebook.com/nowstreetevents

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