brokerdealer

Broker Dealers Battle To Manage Tech Guru Billions: BrokerDealer.com Blog

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Aka “It can be good to be a Wall Street broker-dealer…”

Brokerdealer.com blog update courtesy of WSJ and reporter Randall Smith

Chester Higgins Jr./The New York Times.Thorne Perkin, a wealth adviser, said the young tech group was not to be ignored.

Chester Higgins Jr./The New York Times.Thorne Perkin, a wealth adviser, said the young tech group was not to be ignored.

When Microsoft went public in 1986, its chief executive and largest shareholder, Bill Gates, wound up with a broker at Goldman Sachs, the Wall Street firm that had led the company’s initial public offering.

The San Francisco broker, William Hobi, was so excited to have Mr. Gates as a client that he put a vanity license plate on his Porsche for a few years with the letters MSFT, the trading symbol for the company’s stock.

Times may have changed, but technology billionaires still set the engines racing among Silicon Valley brokers. Social media I.P.O.s, including LinkedIn, Facebook and Twitter, and acquisitions like Facebook’s planned $18 billion purchase of WhatsApp have created more than a dozen billionaires, by one count of Forbes magazine data.

Competition to handle their money is intense. “Every day I get a connection request from a wealth manager on LinkedIn,” said Michael Cagney, the founder and chief executive of Social Finance, or SoFi, an online student-loan platform in San Francisco that might go public in the next year or two. Mr. Cagney sold another financial software company, Finaplex, in 2007 and runs a hedge fund.

 For the full story from the WSJ, please click here.

 

BrokerDealer Credit Suisse Back in the IPO Business

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Brokerdealer.com/blog news extract below courtesy of  June 10 WSJ and reporters Telis Demis and Evelyn Rusi

The chinos are gone. So is the sprawling Silicon Valley hub.

facing eastBut more than a decade after its fall from the peak of the dot-com-banking business, Credit Suisse Group AG CSGN.VX -0.33% is at the helm of some of the sector’s biggest deals.

The bank is one of the lead managers of the expected $20 billion-plus initial public offering for Alibaba Group Holding Ltd., the Chinese online shopping and e-commerce giant.

Credit Suisse also helped lead IPOs for Weibo Corp. WB +1.39% , which operates a Twitter TWTR +2.61% -like service, and online cosmetics retailer Jumei International Holding Ltd. JMEI +0.82% , earlier this year.

Credit Suisse’s climb back in tech banking began with a Starbucks SBUX -0.77% -fueled brainstorming session in 2010 between Jim Amine, the firm’s global head of investment banking, and David Wah, global head of technology banking Continue reading →

Do’s and Don’ts When Raising Capital

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BrokerDealer.com/blog thanks the Sydney Morning Herald for below extracts re: profile of top gun entrepreneur Greg Taylor and guidance on best ways to raise capital for start-up enterprises..

Entrepreneur Greg Taylor

Entrepreneur Greg Taylor

“..Raising capital is stressful and incredibly time consuming. It’s a full time job. So if you embark on a money raising mission, make sure your business is at a stage where it can survive (and hopefully flourish) with minimal input from you. The raise will demand most of your time and attention for the next little while.

It’s actually a lot like internet dating. You write a profile (information memorandum) you go on a first date (swipe right), you decide if you’d like to see each other again, (thank-you text), one party plays hard to get (valuation), meet the parents (due diligence), buy a ring (appoint lawyers), ask the question, (term sheet) and get married (settlement).

Once you’ve got a little seed money to work with, it really then becomes an issue of timing. If you go to the market looking for money before you have a concept or product, you don’t have as much leverage with investors and could potentially be beaten down on your valuation. So founders are generally better off building the product and getting as much traction as possible before courting investment to reduce the risk profile of their venture.The longer you can hold off, the more leverage you have with investors. But the longer you wait, the more risk there is that your competitors will land funds and get the jump on you. And it can be hard to play catch up.

Preparing the business for a capital raise correctly is critical. My advice is to find yourself someone who knows what they are doing. I was incredibly fortunate to have met a trusted adviser who works in the digital space.

QUICK TIPS FOR RAISING CAPITAL

Dos

  • Have all your legal documents prepared and in order.
  • Ensure the information you provide to potential investors is easily understandable and clear. Some aspects of the business may seem simple to you but complex to them. It’s always better to put more information than less.
  • Have all of your company information (ABNs, insurance, contracts) centralised and easily accessible so that it can be supplied to potential investors upon request.
  • You will end up getting married, so make sure your new partners and you both have the same goals (exit strategy, founders’ roles etc) and that the culture is right.
  • Be prepared to negotiate and get a deal done.

Don’ts

  • Don’t think you have the cash in the bank until it’s in the bank
  • Don’t be cocky. You need to show investors that you not only have a good idea, but are willing to listen and learn off them. Most of the time, they are investing 80 per cent in you and 20 per cent in the product.
  • Don’t have an unrealistic goal on valuation – its better to have 10 per cent of something huge than 100 per cent of nothing.

Greg Taylor is the co-founder and CEO of Clipp, an app that allows consumers to open, view, share and pay their bar tab or restaurant bill seamlessly and securely. Clipp secured $1.55m investment in November 2013. Greg sold his previous venture, eCoffeCard for an undisclosed amount earlier this year.

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