Financial markets in the US face a mix of plain sailing and storms as they weather new technologies, according to the CEO and Co-founder of a new generation broker dealership.
Shari Noonan, who heads the innovative New York-based Rialto Markets, predicted fair winds from crowdfunding using Regulation CF or Regulation A+, which can create high-productivity jobs, promote better technologies, and break down barriers across private markets.
But after delivering this forecast as the keynote speaker to private investors and entrepreneurs at Equity Crowdfunding Week (4-8th October), she warned this week of choppier waters elsewhere from regulators grappling with innovation and the “rise of crypto”.
Though reassured by the recent appointment of the hugely experienced and technology aware Gary Gensler as Chairman of the Securities & Exchanges Commission (SEC), Noonan added:
“He and his team have been left with much to catch up on, through the rise of crypto, new and unregulated securities such as NFTs (non-fungible tokens), and innovative trading technology.”
Nevertheless, crowdfunding momentum from the 2016 JOBS Act highlighted an era of opportunity, she added, persuading her and the Rialto Markets team to leave blue chip financial houses – Noonan’s own CV includes senior roles at Goldman Sachs, Deutsche Bank, and Instinet – and found the company in 2016, initially as a broker-dealer.
Rialto Markets has since also invested more than two years gaining FINRA (Financial Industry Regulatory Authority) recognition and SEC-qualification for its secondary market ATS (alternative trading system) for private company share trading.
Shari Noonan said: “We saw how JOBS would revolutionise private company capitalization and investment for all, not just big investors.
“Crypto and blockchain technology has also raised questions about managing and regulating rapid change, but we have assembled a team of highly talented and experienced people each averaging 20 years on Wall Street.
“Chief Operating Officer Joel Steinmetz has huge knowledge in data analysis and electronic trading, while our Head of Market Structure, Lee Saba, is a trading tech guru, and a leading global thought leader and networker who co-chairs the FIX Trading Community (the non-profit global trading standards body).”
Such expertise had created a new generation company for changing times, she said, founded on three pillars:
Primary Markets, as a broker dealer working with Issuers (private companies) raising capital via Regulation CF, A+ or D offerings; a Secondary Markets business offering the company’s secondary trading platform – MarketBoard (ATS); and the third pillar, a white label regulated offering to partners allowing other secondary marketplaces and private market issuance services to use Rialto Markets’ platform.
“We are currently running nine live crowdfunding investment opportunities/completed capital raises, with 10 more in the pipeline,” said Shari Noonan. “But even more encouraging is the swift uptake on the two newer pillars.
“We have already signed numerous private securities for the launch of our MarketBoard ATS, going live when we approach 100,000 registered investors on the platform, while onboarding hundreds of issuers that have completed thousands of transactions onto our white label ATS partnerships.
“And we have just closed a $5 million CF raise for electric vehicle pioneer ATLIS, raising nearly all the money in less than a month and $2 million inside the first 24 hours.”
She added that this followed $4 million raised towards a $15 million Reg A+ target for Digital Twin tech leader Cityzenith. On reaching $5 million any Reg A+ company and its shareholders can start trading a percentage of their shares via a regulated secondary market ATS for private companies.
“Cityzenith could be the first Reg A+ company to achieve this and highlight how shareholders can realise share value much earlier when investing in private companies,” added Noonan. “The norm was previously 12-15 years.
“And it’s nice to see our new approach winning media attention and awards including the Aite 2021 Capital Markets Innovation Award.
“Before the end of 2021, we will launch our own $5 million Reg CF raise, ahead of a much larger, institutional round next year; accredited investors and institutions are watching with much interest, but we are committed to making investments accessible to everyone, so the CF raise enables retail investors to compete on a level playing field with larger investors.”
Paving the way for this CF raise, Rialto Markets is staging investment webinars and roadshows Bringing Private Markets to the Public to share more detail on company growth and business plans, and answer questions from potential investors and partners. You can register here.