David Weild Presentation at SEC 3.4.15

8/9/2019 David Weild Presentation at SEC 3.4.15

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© IssuWorks – Proprietary and Confidential © 2014-2015 All Rights Reserved

SEC Advisory Committeeon Small and EmergingCompanies ’15

The U.S. Need For Venture ExchangesMarch 4, 2015

David Weild IV

[email protected] 646-472-9603

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’15

SEC Advisory Committeeon Small and Emerging

Companies

mailto:[email protected]:[email protected]


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’15SEC Advisory Committeeon Small and EmergingCompanies

Weild & Co. | IssuWorksReplacing lost distribution

• We combine

• Data acquisition

• Data science (investor targeting)• CRM (institutional investors)

• Direct marketing (customized outbound emails)

• Computer-telephony (telephone follow-up)

• Feedback

• To provide:

• Enhanced distribution to Wall Street

• Enhanced distribution to Companies

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SEC Advisory Committeeon Small and EmergingCompanies


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Background

• Published Studies

• Why are IPOs in the ICU? (Weild & Kim)

• Market Structure is Causing the IPO Crisis (Weild & Kim)

• Market Structure is Causing the IPO Crisis - and More (Weild & Kim)• A Wake-up Call For America (Weild & Kim)

• The Trouble with Small Tick Sizes (Weild, Kim & Newport)

• Making Stock Markets Work to Support Economic Growth (Weild, Kim &

Newport)• The U.S. Need for Venture Exchanges (Weild & Kim)

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Widely followed:

• SEC

• Federation of European Securities Commissions

• European Commission

• OECD

• G-20

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Agenda:

• The Problem

• Why It Is Important

• Primary Cause• Solution: Venture Exchanges

• Manage by Objective

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THE PROBLEM

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SEC Advisory Committeeon Small and EmergingCompanies ’15’15SEC Advisory Committeeon Small and EmergingCompanies

By the Numbers (1998 to Present)

• U.S. Fell from #1 to #12 in Small IPOs

• U.S. Fell from #1 to #2 in Large IPOs

• U.S. Fell from 14% to 8% Start-ups• U.S. Fell from 9,000 to 5,000 Listed Companies

• U.S. IPOs fell from 500/year to 150/year, should be 950/year

• Lackluster employment

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What IPO market?

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What IPO market?

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Investment Banking System Collapsed (1994)

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No Money For Sales, Distribution and Market Making in

Small Cap Stocks (2014 Bookrunners of Small IPOs)

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What Some Academics Attribute to Weild & Kim as, “ The Ecosystem

Theory of Small IPO Decline.”


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What IPO market?

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WHY IT IS IMPORTANT

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Why Everyone Should CareJobs | Prosperity | Problem Solving

• Jobs (10 million+ total, 1.5 million- 2.5 million direct)

• Poverty (Full Employment)

• Retirement (Growth)• Innovation

• Oncology

• Renewable Energy

• Internet Security• National Security

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PRIMARY CAUSE

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Two Causes

• Capacity (Diminished revenue to pay for investment banking,

research, sales and capital commitment in support of liquidity)

• One-size-fits-all market model

• Works for naturally liquid stocks (large- and mid-cap)

• Fails illiquid stocks (small-, micro- and nano-cap)

• Cost to Issuers

• Disclosure

• Transaction failure

• Aftermarket failure

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Loss of Economic Incentives

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SOLUTION: VENTURE EXCHANGES

Let’s put an end to “One-size-fits-all markets”

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What is a “ Venture Exchange?”

• NASDAQ in the 1970s and 1980s was the de facto U.S. Venture

Exchange

• London’s AIM

• Toronto’s TSX Venture

All have lost their way through a loss of the ecosystem-focused (as

opposed to shareholder-focused) economic model.

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Be Bold: Institutionalize the Solution

• Create “Regulation Venture Exchange”

• Establish a “Venture Exchange Division” of the SEC (and

FINRA and DTCC)

• Charter “member-owned” (sustains the ecosystem) “Venture

Exchanges”

• Permit listings up to $2 billion (feeds ecosystem) in market

value

• Competition:

• Between Venture Exchanges

• Between Venture Exchanges and Other Exchanges for

Listings Up to $2 Billion in Market Cap.

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Exempt Venture Exchanges From:

• Order Handling Rules

• Reg. ATS and NMS

• Unlisted Trading Privileges (Rule 12f-2)

• Decimalization

• Sarbanes-Oxley

• State Blue Sky

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Create a new pro-growth environment:

• “Yes” to

• SEC Review (not State, not NOMAD)

• SEC Scaled Disclosure

• JOBS Act Research Rules

• “No” to

• ETFs & Index Funds

• Depress liquidity

• Siphon capital from capital formation

• Undermine ‘Entrepreneurial IQ’

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In addition, some improvements to private

markets:

• Require basic disclosure

• Require a consolidated tape

• Allow national aftermarket solicitation of accredited investors andinstitutions

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MANAGE BY OBJECTIVE

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The Objective: By the Numbers: 10 mil lion jobs

• U.S. Fell from #1 to #12 in Small IPOs

• U.S Back to #1

• U.S. Fell from #1 to #2 in Large IPOs

• U.S. Back to #1

• U.S. Fell from 14% to 8% Start-ups

• U.S. Back to 14%

• U.S. Fell from 9,000 to 5,000 Listed Companies

• U.S. Goes from 5,000 to 13,000+ growing at 3%/year

• U.S. IPOs fell from 500/year to 150/year• U.S. Goes from 150/year to 950/year growing at 3%/year

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© I W k P i t d C fid ti l © 2014 2015 All Ri ht R d


The U.S. Need For Venture ExchangesMarch 4, 2015

David Weild IV

[email protected] 646-472-9603

mailto:[email protected]:[email protected]

Documents

David Weild Presentation at SEC 3.4.15