SILICON VALLEY, CA — (Marketwire) — 02/05/13 — Equidity, the company dedicated to better IPOs, today formally launched Equidity 360?, its new IR platform beta, PIPO Advisory, and announced 135 Economic GrowthSTARS Award nominees. The GrowthSTARS awards honor the top late-stage, IPO-track companies, the “Heroes of the Economy,” which collectively have the potential to deliver five million new jobs, upon remediation of the IPO process and the completion of their IPOs. A book highlighting the 135 nominees, an infographic on Equidity-s improved IPO model, and other important economic information is available [upon request to ].
Equidity formally invites long-term growth-oriented public and late-stage private QIB investors to participate on the Equidity 360? platform beta, a cloud-based software platform that connects investors directly to the GrowthSTARS nominees in a secure private forum designed to support their private company research and investing needs, including facilitation of PIPOs private placements (Public Investors in Private Offerings). Equidity 360?-s virtual data room is hosted by DataSite, the premier online virtual data room solution, provided through a strategic partnership with Merrill Corporation, the leading provider of Capital Market Disclosure Solutions.
With the majority of IPO companies recording disappointing post-IPO results over the past decade, and many more unable to realistically undertake IPOs due to unfavorable valuations and other issues, an acute market need has emerged for growth-company liquidity. Issuers and investors alike are calling for an improved IPO mechanism that can revitalize the entrepreneurship and venture industries that are critical to America-s economic and job growth.
“This is not a market cycle; this is an issue of a broken IPO infrastructure. The traditional IPO process hasn-t worked well in our disrupted markets for over a decade, yet companies and their investors continue to undertake the same IPO process while expecting different results,” said Equidity CEO and Founder, Mona DeFrawi. “Today we understand the structural issues, and Equidity has designed structural solutions including an improved IPO process, beginning months or years earlier with the PIPO private offering. PIPOs support long-term investing and fundamentals-based valuations to effectively produce primary liquidity, economic growth, and job creation.”
Equidity offers a unique combination of a technology platform for the highest quality QIB investors only, combined with customized advisory services for the top, pre-IPO client companies. Equidity provides a structured, secure and transparent research and collaboration environment, hard wired to replace missing capital markets infrastructure that has disabled the traditional IPO process- ability to deliver optimal results.
Designed by CEO Mona DeFrawi based on 20+ years of experience building internal functionalities for companies and funds to conduct their own powerful fundraising, IPOs and aftermarket performance, Equidity is an “investment concierge” for late-stage companies and the public and private QIB investors potentially interested in such companies — but whose objectives are often thwarted by the fragmented and opaque nature of the private investing process. The Equidity 360? platform is designed to leverage the power of the network to provide a haven within the current dysfunctional IPO industry ecosystem, and deliver the best relationships and tools for pre-IPO research and private placements in the $20 to $200 million range.
Architected for transparency and direct access for an internal “do-it-yourself-toolkit,” the 360? platform delivers what companies and investors need in order to facilitate optimal results, from the right relationships, to secured document sharing. Built-in privacy and security enable companies and investors alike to search profiles, identify the right opportunities, facilitate introductions and meetings, research and exchange confidential information, and more. Rather than parachuting into lightning-paced public markets, issuers and investors have instant, round-the-clock access to a new kind of structure that supports their long-term goals. Issuers have the tools they need to enable strong and sustainable post-IPO performance.
As America has evolved from a manufacturing to an innovation economy, the IPOs that fund entrepreneurship and venture capital, also have become critical to U.S. capital formation, economic growth and job creation. Entrepreneurial companies, and the investors who incubate and finance them, together comprise the engine of America-s economic growth. Enterprises younger than five years old have created in excess of 40 million new jobs over the past three decades — almost all of the new job creation in the country, according to the Jobs Council [1]. Ninety-two percent of job creation occurs post-IPO, according to research by IHS Global for the National Venture Capital Association (NVCA) [2]. Moreover, IPOs spark a multiplier effect in the economy in which each innovation job creates an additional five jobs in the local economy, according to Dr. Enrico Moretti of the University of California, Berkeley [3]. Statistics show that less than 0.2% of GDP is invested in venture capital annually, yet produces revenues of 21%, a 10,500% return on investment for the U.S. economy [4].
Around the turn of the millennium, many permanent changes occurred in the financial markets infrastructure that automatically supported healthy IPO and aftermarket performance. Additionally, much market activity today results from high-frequency trading, which doesn-t support long-term investment potential, and in fact, creates an eroding effect from too much liquidity and not enough stability in shareholder base composition for young potential IPO companies. The velocity of trading in newly public companies without a stable shareholder base can negatively influence valuations simply through trading logistics alone, without regard to actual corporate performance. This market-wide phenomenon of valuations detached from fundamentals has created downward pressure on valuations, while dramatically increasing uncertainty and lack of confidence in IPOs. Compounded in aftermarket trading, IPOs frequently debut to great fanfare, only to see their share prices sharply decline in the aftermarket. Equidity-s platform is designed to correct the shareholder base stability issues to counteract today-s trading dominant markets, to provide aftermarket structural support, and to re-attach valuations to fundamentals to help restore trust in IPOs again.
Equidity-s 360? platform develops companies- internal Investor Relationship assets and IR functionality in the most powerful and time- and cost-effective ways possible, and provides comprehensive support for successful transactions and aftermarket activity. Companies receive full support for liquidity, late-stage fundraising and IPO success. Participation in the Platform beta is complimentary to the top private companies with the greatest likelihood IPO-potential — highlighted by the first 135 GrowthSTARS Award Nominees. The Equidity 360? platform is also designed to provide excellent IR and investment banking support for companies working with our client companies.
The Equidity 360? platform enables investors to research the complex private markets with full visibility, transparency and direct access potential, so they can determine valuations attached to actual fundamentals. The platform is designed to allow investors to properly vet and value companies by delivering the investor relations and financial information needed to research corporate performance and potential. Participation in the platform beta is complimentary to long-term growth QIB investors with a minimum average portfolio-holding period of two years or more.
“If the IPO process doesn-t improve, economic growth and innovation will remain hobbled,” said DeFrawi. “Equidity was created to solve the problem for both investors and IPO candidates alike, by providing the groundwork for solid networks, deep collaboration and, as a result, stable long-term growth. By facilitating an orderly transition from private to public markets, Equidity will play a powerful role not only for companies and investors, but for job creation at large.”
To find out more about Equidity, please visit .
Equidity offers a unique combination of a cutting-edge technology platform combined with customized advisory for its clients to revolutionize the way privately-held companies and QIB investors prepare and navigate through the IPO process for optimal results, best aligned with long-term economic and job growth. To learn more about Equidity, please visit .
[1] Jobs Council, “Nurture the High-Growth Enterprises that Fuel New Jobs.”
[2] “Venture Impact: The Economic Importance of Venture-Backed Companies to the U.S. Economy,” IHS Global for the National Venture Capital Association (NVCA).
[3] Moretti, Enrico. “The New Geography of Jobs.” Boston: Houghton Mifflin Harcourt, 2012. Print.
[4] Venture Impact, IHS Global Insight, 2007, 2008, 2009 & 2010
Ethan Parker
BOCA Communications
415.377.0978
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