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IPOs for the Rest of Us

IPOs for the Rest of Us

No matter what your career choice, it comes with some elements of a downside. For me as a technical author and journalist my career has kept me out of the stock market. It comes down to the appearance of impropriety. Writing about technology and technology companies ethically has kept me out of investing in these companies. It just wouldn’t do to be singing the praises of a hot company if I was also able to financially profit from the recommendation. Your morals may vary and I couldn’t see risking my reputation.


IPO VillageThanks to some rather ingenious thinking from the portfolio companies of First-Line Capital I get to play without violating my morals. I expect to profit handsomely and believe you can as well. Let me explain and see if you agree if it works for you.


First Line Capital is an investment banking service company that is been around for a few decades. Their reputation is stellar. In short what they have managed to do is to take the quite lucrative pre-IPO investment opportunities typically only available to the industry generally known as Wall Street and made it available to the public. To understand how this works let’s take a brief peek at the IPO market.


There are two types of companies in the corporate realm. Public and private. Private companies have far fewer regulations. Nowadays you can find out what the public companies are doing with rollouts by looking at crowd source funding sites. They have really been hot the past couple years. For an overview of the various crowdsourcing funding sites take a look at it is the crowd source funding they gave First Line Capital an idea.


As I mentioned above public companies have a great deal of restrictions placed upon them by the SEC in the launch of their stocks. More about that in a minute.


To help complete the puzzle we need to look at the anatomy of Wall Street and the IPO. A great deal of analysis goes on to determine the value of a company which in turn determines what the stock price will be set at. The way the game is played a prices set balancing the competing factors of maximizing the capital being raised with setting the price low enough that investors get an immediate ROI on the day the stock goes public the jargon for this first day up turn in the stock price is called the pop. This game has been l mostly limited to that small section in Manhattan called Wall Street.


First Line Capital has taken the concept of crowd source funding and married it to the IPO with a website called


Working on a first-come first-served basis you get in line by registering with them while the IPO being offered is in the “Quiet Period” required by the SEC. They tell you a great deal about the company without telling you who the company is. Looking at their current offering I think I know which company it is because of my travels outside the US (no, I’m not talking).


So you sign up free of charge on the first-come first serve basis. When the deal comes up you have an opportunity to make an investment, which appears to be as little as $100. The operative word here is opportunity. There are no requirements to do so. If you elect to get into the pre-IPO they accept major credit cards, PayPal , ACH transfers and electronic transfers.


Funds are held in escrow until the IPO expires or sells out, whichever comes first. If it is not successfully funded all funds are returned. Once the IPO has gone public shares are transferred via the usual methods.


There are two points to this concept I find fascinating. First, IPOVillage is replacing several layers of ‘middlemen’. Secondly, the structure allows ordinary people to get in on the game that has been reserved exclusively for Wall Street.


And a final point for us ethical journalists, we get to participate since we aren’t being told the name of the company.


Obviously by the very nature of the investment market there are no guarantees. And in my lifetime I cannot think of a public IPO that on opening day did not yield a positive ROI for that closed club of investors.

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