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Technology Stocks : FBN Associates - Year 2000/Y2K IPO!!!

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To: Bill Ulrich who wrote (2258)12/5/1998 2:43:00 PM
From: tugboat   of 2770
 
The FairShare Solution
- Organize the Buyers!

Premise:

Young technology companies increasingly use IPOs to
raise, essentially, venture capital.

Problem:

The public pays too much to participate! Companies get
a higher price from "public VCs" because the public is so
eager to invest in high potential stocks. IPO pricing takes
advantage of the desire by investors with limited access
to early stage deals and poor ability to demand a more
attractive price.

Why? Valuation is not a required disclosure for public
investors, but it is the most critical piece of information
for the "big guys" when they evaluate a deal. Absent
valuation disclosure, public investors principally
evaluate IPOs on other --non-financial--terms, such as:
Are early investors and underwriters
prestigious?
Is the company well known?
Positive impression of company's product,
technology, management, and market space?

Result:

Ordinary investors occupy the last position in the
"investor food chain"; unlikely to make money on popular
IPOs unless they get in before others who are even less
"valuation aware" than they are. They also find it hard to
decide if a less well known IPO or DPO (direct public
offering) is fairly priced.

Solution:

Organize investors to get better deals on venture capital
IPOs. Provide deal structure education, the ability to
network and to pool due diligence. Provide promising,
pre-screened companies with IPOs/DPOs free access to
these investors in exchange for VC (low) valuations and
guarantees that small investments may be made.

That's What Fair$hare Is All About!



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