IPO Village is a crowd funding platform company that hosts initial public offerings (IPO). IPO Village has recently received over $1 million in pledges for their first crowd funded IPO and it is set to go live in a few weeks. IPO Village is an organization that uses crowd funding to bring exclusive pre-IPOs to the everyday retail investor which would let “Main Street” investors access stock that was once only reserved for Wall Street companies.
?We are thrilled with the number of people signing up to lock in a chance to purchase shares at pre-IPO prices,? stated IPO Village managing director Howard Orloff. ?Our first company is set to go public within the coming months and already $1 million dollars in pledges from approximately 500 retail investors have been received through IPOVillage.com. Retail investors are excited to secure their place in line for our first crowdfunded IPO.?
Investors are not committing themselves to purchase stock. They are getting a place in line to buy stock. After an investor signs up on their website, they will receive an e-mail and detailed information to begin their research before making an investment decision. After the offering comes out of the quiet period, investors that sign up will receive an alert letting them know that the option to buy stock is available.
I spoke to Daniel Hirsch of First Line Capital to learn a bit more about IPO Village. He told me that through IPO Village, companies are able to cut out the middleman in crowd funding IPOs. These companies now have “open door access” to grant Main Street investors the same opportunities as Wall Street offerings. IPO Village is a member of the National Crowdfunding Association too.
Before working with IPO Village, Mr. Hirsh has helped over 20 companies go public. The process of an IPO can be overwhelming because shares have to be sold to an underwriter, who takes a huge chunk of the deal and then they take it to an investment banker. Then the institutional investor takes a large amount of shares. IPO Village allows companies to go to anybody and they do not take a cut from the deal. Every $1 that an investor puts in goes right to the company.
By using a crowd funding framework for IPOs, it is a game changer and a shift from traditional capital market models. I believe that this is a step in the right direction for promoting entrepreneurship and encourage companies to embrace the opportunity to go public.