The following interview (by Alicia Purdy) originally appeared on Accredited Investor Markets (AIMkts) and can be found at http://www.accreditedinvestormarkets.com/a-few-minutes-with-ace-portal.
1. What sort of gap/need in the private investment market spurred the inspiration for ACE Portal?
Peter Williams (PW): The initial basis for ACE Portal was born from practical experience. Having worked in investment banking for close to a decade I was pulled into numerous private placement processes and was amazed at the inefficiencies in that process. On the investment banking side the process is very labor intensive, with most investor interactions recorded manually. Investor reach was highly limited and literally relied on a couple of guys and a telephone as the state of the art way to reach the investment community. While there are over 30,000 qualified institutional buyers in the US alone, collectively we, the bankers, would determine which 25-75 investors would be the only ones to even know about the specific transaction we were marketing. This took months and often resulted in failed transactions. Ultimately I thought there had to be a better way to bring efficiency to this market, to increase transaction speed and success rates, all in a fully compliant manner.
Carl Torrillo (CT): For me, the inspiration is about democratizing access to capital for deserving companies and in turn democratizing access to deal flow for investors, which I believe ultimately helps stimulate growth in the economy. The catalystfor me to leave my profession and join forces with Peter and Rich was the passage of the JOBS act. This created the practical opportunity to address the grand vision of streamlining a tremendous (~$1 trillion) market.
Richard Pistilli (RP): What I found in the private investment market was a common structural impediment towards streamlining processes which was driven by antiquated systems and aversion to change. The challenge to introduce efficiencies through innovation resonated with me, and it’s what I saw in ACE. The private capital markets are in need of structural solutions that can transform the asset class, which can then enhance capital flows and accelerate economic growth.
“The ultimate result of shielding men from the effects of folly is to fill the world
with fools.” ~ Herbert Spencer, English philosopher (1820 – 1903)
Financial Markets have been Calm since 2012
Since the European debt crisis in 2012, things have been relatively “calm”. Investor sentiment has improved. Central bankers did what they know best – inflate the money supply. An impressive and extended rally in stock markets around the globe continues. The recovery story seems to have broadly been accepted, albeit with some bumps.
Over the past few months, a change of mood has started to transpire. After the arrival of the emerging market crisis earlier this year – i.e. slower EM growth, currency gyrations, capital outflows – the crisis in Crimea has led to some market uncertainty. Across the board, investor expectations no longer shine as brightly as they did in 2013. The cracks in the recovery story have been noticed. This needs to be considered and kept a close eye on in the coming months.
I don’t agree with the panic mode some commentators have recently fallen into – even James Rickards, generally a moderate commentator, speaks of a financial system collapse and a 90% loss in the dollar. However, at BFI, after last year’s impressive performance in stocks, we too do expect some turbulence ahead and a sideways movement in global stock markets at best, for the next one or two quarters.
Private Equity Industry Hiding Fees
Who knew what PE managers were hiding from their investors?
Are private equity documents so opaque that even sophisticated investors couldn’t possibly figure out how much PE firms actually earn (or save) from their portfolio companies?
The SEC thinks so.
Following Dodd-Frank, the agency has been examining hundreds of new PE registrants and has found serious disclosure violations regarding fund fees and expenses in more than half of the firms examined.
This article, which first appeared in the VC Experts ‘Buzz Feed, features Joe Bartlett explaining some basic terminology on the VC and angel industry.
Considering an angel investment?
Before you take the plunge, learn to talk shop like a professional VC.
Angel investing is an increasingly common practice among high-net-worth individuals. But many would-be angels lack a true insider’s vocabulary – and the savvy that goes with it. Do you know the difference between a “burn rate” and a “burn out”? The pros do, and so should you if you’re looking to invest in a start-up. For a summary of “types” of angels see this post.
What then, in plain English, are all these venture capitalists talking about?