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Vm pp 10.4 (2)


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“Current Legislative Proposals Changing the Capital Market by Vincent Molinari CEO of GATE Technologies

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Vm pp 10.4 (2)

  1. 1. Current Legislative Proposals Changing the Capital Markets Landscape” <br />by Vincent Molinari, Founder and CEO of Gate Technologies <br />Impacts on Investors, Intermediaries & Issuers<br />October 4, 2011<br />New Market Infrastructure  The Value of a Centralized Marketplace<br />
  2. 2. The Growing Secondary Market for Private Shares<br />Developing Market<br /><ul><li>Secondary Private Equity Market growing dramatically
  3. 3. New market infrastructure needed to support expansion
  4. 4. Centralized electronic marketplaces will bring greater transparency, efficiency, and liquidity</li></ul>What’s behind the growth?<br /><ul><li>Decline in smaller, venture-backed IPOs
  5. 5. Growing efficiency and maturity of the market
  6. 6. Time to IPO for venture backed companies has doubled</li></ul>© GATE Technologies LLC 2011<br />
  7. 7. Market Evolution<br />Mature, liquid asset classes such as listed equities, fixed income, foreign exchange, and commodities have all followed a similar path<br />Voice Brokerage<br />Electronic Quotation<br />Electronic Execution<br />In-Person Trading<br />Book Entry Transactions<br />Opaque, illiquid market<br />Transparent, liquid market<br /><ul><li>Secondary trading in private equity has developed quickly to the point of electronic quotation through online bulletin boards that allow members to post bids & offers
  8. 8. The natural progression of the secondary private equity marketplace is through the development of new technology infrastructure to support growing participation and volume
  9. 9. Move to electronic execution through ATS venues
  10. 10. Electronic connectivity through FIX
  11. 11. Development of a central depository for private share</li></ul>© GATE Technologies LLC 2011<br />
  12. 12. New Market InfrastructureBenefits for Market Participants<br />New technology infrastructure is required to support the evolution and expansion of the market<br /><ul><li>Bulletin boards were the first step toward a more centralized market
  13. 13. Voice-brokerage models limited by personnel bandwidth
  14. 14. Electronic systems can provide greater distribution and lower execution cost</li></ul>Centralized electronic transaction venues benefit market participants<br /><ul><li>Transparency
  15. 15. Better view of market activity for participants
  16. 16. Enables regulatory oversight without additional regulation
  17. 17. Efficiency
  18. 18. Electronic execution lowers transaction times
  19. 19. Buyers & Sellers have more information on which to base decisions
  20. 20. Liquidity
  21. 21. Connectivity increases potential liquidity sources
  22. 22. Transparent market environment brings increased confidence
  23. 23. Potential for private shares to be held in street name</li></ul>© GATE Technologies LLC 2011<br />
  24. 24. Current Legislative ProposalsThat Could Redefine Capital Formation<br />Congressman Issa, Chairman of the Committee on Oversight and Government Reform was an early proponent of capital formation reform. <br />Financial Services Committee Chairman Bachus and Capital Markets Sub Committee Chairman Garrett advance legislation tomorrow <br /><ul><li>( Rep Schweikert )H.R. 2167 - Private Company Flexibility and Growth Act
  25. 25. ( Rep McHenry ) H.R. 2930 - Entrepreneur Access to Capital Act
  26. 26. ( Rep McCarthy) H.R. 2940 - Access to Capital for Job Creators Act
  27. 27. ( Rep Fincher ) H.R. ------ - Small Company Job Growth and Regulatory Relief Act
  28. 28. ( Rep Himes ) H.R. 1965 – Thresholds for shareholder registration</li></ul>Other pending legislation of importance includes:<br /><ul><li>( Rep Schweikert ) H.R. 1070 – Small Company Capital formation Act
  29. 29. ( Sen Tester & Toomey ) Companion Bill to H.R. 1070 ( Rep Schweikert )</li></ul>© GATE Technologies LLC 2011<br />
  30. 30. Letters to Congress<br />Honorable Kevin McCarthy<br />Honorable Spencer Bachus<br />
  31. 31. The Future of the Secondary Market<br />Expected Trends<br /><ul><li>Increased institutional investment in late-stage private companies
  32. 32. Greater participation from traditional asset managers
  33. 33. Continued centralization of transaction volume
  34. 34. Standardization of transaction processes and documentation
  35. 35. Growing regulatory oversight of private markets
  36. 36. Adaptation of old rules to new market environment
  37. 37. Increased collaboration between transaction venues
  38. 38. Growing presence of dedicated research providers
  39. 39. Global expansion!</li></ul>© GATE Technologies LLC 2011<br />
  40. 40. What Can You Do <br /> <br />1.   An online or print journalist friend that can cover our message.<br />2.   A reporter, tv personality, writer or celebrity that will voice and convey our call-to-action<br />3.   A congressman or senator you know personally or have interacted with before.<br />4.   A VC or private equity partner with holdings in the space that should learn more about this topic.<br />5.   Our letter to be signed for congress and senators on our website <br /><br />6.   Bloggers and twitter writers that could cover this topic.<br />7.   Blog at <br /> and recommend articles on this topic for us to post on TSL and Gate Tech websites.<br />
  41. 41.<br />(646) 449-7990<br /><br />GATE Technologies, LLC<br />1212 Avenue of the Americas, 8th Floor<br />New York, NY 10036<br />