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Capital Raising “Capital markets point of view” dealer

For private issuers, raising capital is the next natural step once you have exhausted other traditional forms of financing. It becomes even more enticing when you read about other firms doing it, and thinking why shouldn’t that be us.

However, being prepared to take the issuer to the next level can be a source of frustration if you’re not ready for it. Nobody is willing to just hand out money; you have to make a convincing case based on fact and incomplete due diligence documentation can leave you out in the cold.

Issuers must prepare comprehensive information which covers who the guiding minds behind the issuer are, who the current shareholders are, business continuity planning, company financials, what is it that makes you unique and a comparison with competitors in the same industry.

Dealers are bombarded by people who claim to have the next best thing, but if you can’t boil it down to facts and figures, they won’t spend much time looking at you. Using up to date technology to gather all the corporate information is critical to your success. Using a platform to house your cap table management, minute book, financials, investor relations and corporate data in electronic format means you can walk into a meeting prepared for whatever they throw at you.

For dealers, having a platform whereby issuers can login and input all the relevant information that you need from them, allows you to control the process and weed out the unprepared ones before you devote a lot of time to analysing potential deals. A controlled mechanism whereby issuers know what information they need to provide and where to put it, saves everyone significant time and effort.

Taking it one step further, for registered dealers to have the ability to easily showcase their approved products online, along with pertinent information about the issuer – corporate biographies, financial information, information about the proposed raise –  helps dealers to bring their proposed offerings to potential investors. From a compliance perspective, it means having all of your due diligence in one place, for when the regulators come to visit.

Taking it two steps further, for investors to b able to view potential offerings, input their Know Your Client (KYC) information to determine their eligibility, answer questions to determine the suitability of the investment, have the platform conduct the necessary AML checks and then provide an efficient method for payment, once approved by the CCO, and you have an efficient and cost effective ecosystem which helps issuers, dealers and investors communicate.

KoreConX has an all-in-one platform to accomplish this and ensures that all parties are acting in compliance with securities regulations. Issuers can effectively connect with dealers who in turn can connect with investors all while ensuring that they have the necessary KYP/KYC processes and documentation in place, should they get audited.

About the author
Jonathan Heymann

Jonathan Heymann

Jonathan Heymann began his career in the financial services industry working at Spectrum United, a mutual fund company. In 1999, Jonathan joined the Ontario Securities Commission and within two years became a Supervisor in the OSC Contact Centre, where he developed a broad knowledge of the Capital Markets in Canada and particularly the role of compliance.

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