JOBS Act opening window for smaller investors
By John Aidan Byrne
September 28, 2013 | 10:05pm
The JOBS Act has opened the window for smaller investors to get a taste of the deals once reserved for the 1 percenters.
This historic change is a product of the bipartisan 2012 law aimed at job growth as well as small business creation.
For example, it promotes crowdfunding — investments in new ventures from family, friends and office colleagues. And it permits emerging growth companies to file an IPO without publicly disclosing sensitive financial details, à la Twitter.
And on Monday, an 80-year-old ban preventing hedge funds, private equity funds, startups and other private investment outfits from advertising was lifted. Billboards, social media, print and television are now fair game. The swift change triggered a flood of private offerings of securities this week, dealmakers told The Post.
“I am running into people taking advantage of it all over the place. There are deals everywhere, including one company that’s raising $60 million,“ said an upbeat David Weild, CEO and chairman of IssuWorks, a financial-services software platform in New York.
“I spoke about our business at a conference [recently] — and that’s something I could not have done before,” added Weild, a former vice chairman at Nasdaq.
“The last time they were able to market like this was when sliced bread was invented,“ said Patrick ONeill, head of strategy at The Longtails, a marketing agency for financial services. ONeill estimates the changes will also result in tens of thousand of jobs for marketing teams across Wall Street.
Weild’s IssuWorks announced on Monday it was raising capital in these formerly hush-hush private-placement offerings. “We’re going to start with as little as $2 million and ultimately raise about $20 million,“ Weild said.
John O’Shea, co-chairman of TerraNova Capital Equities in New York, also jumped on the bandwagon, offering notes on AllGreen Energy, a renewable-energy project in India. O’Shea was even interviewed on a Russian television channel with 20 million curious viewers. And he then got to post his sales pitch on YouTube.
O’Shea says he now has “indications” from investors for about half the deal, $10 million.
“It would have been a lot slower in the past,” O’Shea said. “Now you can target hundreds of thousands, or millions, of prospective investors.”