This document discusses capital formation and crowdfunding. It notes that many successful tech companies like Google and Facebook had initial market values under $1 billion and have since grown tremendously. The capital markets are transforming with innovations in technology, communications, and regulations. New rules under the JOBS Act allow for increased crowdfunding opportunities. This represents a shift from large institutional funds and public companies to growing private markets and a more supportive environment for small companies.

1. PAVING A NEW PATH TO ECONOMIC PROSPERITY
CAPITAL FORMATION & CROWDFUNDING
FORUM
New York, NY
May 17, 2012

2. “It is time to lead. This doesn’t need to be the
sunset on the American Era. We can make it
the dawn of the next great century for
America. The only way China ever catches us
is because we let them.”
― DAVID WEILD, FORMER VICE CHAIRMAN OF THE NASDAQ STOCK MARKET

3. DEDICATION
Today’s event is dedicated to our speakers who
continue to enlighten us with their wisdom
and inspire us with their deep commitment to
rectifying America’s capital markets.

4. SPONSORS

5. Welcome to the Future of
America’s Capital Markets

7. Support System
Receptive
Boutique Investor Small Cap
Investment pool Analysts
Bankers
Supportive
Small Cap
Marketplace
Institutional & Retail Market
Sales force Makers
willing
to risk their
own capital

8. MKT. VALUE AT IPO: $438M
MKT. VALUE AT IPO: $58M
MKT. VALUE AT IPO: $123M
MKT. VALUE AT IPO: $165M
MKT. VALUE AT IPO: $52M
MKT. VALUE AT IPO: $188M
MKT. 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

9. “The Crown Jewel of Capitalism”

11. •PROGRAM TRADERS
•PIPE FUNDS
•SUPERSIZED BANKING
CONGLOMERATES
•LARGE CAPS WITH
LIMITED GROWTH LEFT
•MASSIVE INSTITUTIONAL
FUNDS

12. THE CURRENT FLOW OF CAPITAL
CIRCLE OF “BIG”
$$ $$
$$$$
$$$$$$

16. APRIL 5, 2012
THE DAY THE CAPITAL MARKETS WERE FOREVER ALTERED

17. Take Everything you know about Wall Street
and throw it out the window

18. PROGRAM
TRADERS
PIPES
$$$$

19. The Private Markets
The new black

20. CAPITAL FORMATION
Repaving The Path to Capital - brick by brick

21. 20/20 Hindsight

22. The Rules Are Changing
•The Crowdfund Act
•The removal of the solicitation ban
•Increased shareholder threshold
from 500 to 2,000
•Raising the Regulation A Exemption
Ceiling from $5M to $50M

23. Innovation is Accelerating

24. Global Communications is Advancing

25. “Every two days there is more
information being created
than between the dawn of
civilization and 2003.“
- Google CEO Eric Schmidt

26. Days It Took To Reach 50M Users
14000
12000
10000
8000
13870
6000
4000
4645
2000
1460 1325
88 21
0

27. Innovation in Mass Media
Catalyst for Stock Market Growth
NASDAQ
+629%
DJIA +517%
DJIA +657%

28. Our Stock Markets Are Transforming
PRIVATE COMPANY VS. PUBLIC COMPANY GROWTH IN 2011
590%
490%
390%
290%
PCM NASDAQ
190%
90%
-10%

29. Our Stock Markets Are Transforming

30. INVESTING BEHAVIORS ARE SHIFTING
The 1700s The 1920s The 1950s The 1980s The 1990s The past
Tomorrow
12 years
“I’m investing “I’m buying any “I only invest in “I only invest in “I’m trading “I just locked in “I am investing
in Government stock I can on mutual funds, SURE THINGS dotcoms, a 300% return to help my
bonds because 10% margin” Daddy-o” and I only speak baby!” on ACDC and I community and
I am patriotic on BIG cell have no idea the equity
and there are phones” what the kicker may just
really no other company does!” send my kid to
options” college!”

31. The Regulatory Environment is
Transitioning
• Via Social Media outlets,
“the crowd” was able to
detect the fraud within 2
days
• No investor money was lost

32. Even the Crowd is Evolving

33. 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

34. Friendly
Legislation
Next phase of mass communications
A rapidly expanding, small-cap supportive,
untarnished growth marketplace
20/20 Hindsight
A hungry crowd eager for change

35. The Rising Private Markets
Collaborative Markets
Balanced Markets
Pure Growth Markets
Better Markets
Dara Albright, Founder of NowStreet
Http://nowstreetjournal.com
dsa@nowstreetmedia.com
@nowstreet

36. Where to go for industry data
Crowdfunding Industry Report:
http://www.crowdsourcing.org/research
Industry Organizations:
• http://cfira.org
• http://crowdfundingprofessional.org/