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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 opportunities for smaller issuers and investors to create wealth.

Published in: Economy & Finance, Business

Flawed Market Structure Exacerbating the Great Wealth Divide

  1. 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. 2. Sponsors
  3. 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. 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. 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. 6. Flawed Market Structure Exacerbating the Great Wealth Divide
  7. 7. MSFT HISTORIC CHARTWhere theinvestingpublic hadtheopportunityto invest
  8. 8. DELL HISTORIC CHARTWhere theinvestingpublic hadtheopportunityto invest
  9. 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. 10. “The Crown Jewel of Capitalism”
  11. 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. 12. There is no more meat in the public markets!
  13. 13. The Private Markets The new black
  14. 14. Where Growth Lives Today PRIVATE COMPANY VS. PUBLIC COMPANY GROWTH IN 2011590%490%390%290% PCM NASDAQ190%90%-10%
  15. 15. Our Stock Markets Are Transforming Era of the social stock market
  16. 16. The Social & Mobile RevolutionFueling the Next Economic Expansion NASDAQ +629% DJIA +517% DJIA +657%
  17. 17. Days It Took To Reach 50M Users 14000 12000 10000 8000 13870 6000 4000 4645 2000 1460 1325 88 21 0
  18. 18. “Every two days there is more information being created than between the dawn of civilization and 2003.“- Google CEO Eric Schmidt
  19. 19. HOW DO WE CAPITALIZE ON THEINNOVATION OF THE DAY?
  20. 20. Don’t Put All Your Eggs in One Basket
  21. 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. 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. 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. 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. 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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