LIQUIDITY FOR UNLISTED SECURITIES The Trading and Investment Platform for Unlisted Securities Series 2 Capital Raising
July 2020
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LIQUIDITY FOR UNLISTED SECURITIES The Trading and Investment - - PowerPoint PPT Presentation
LIQUIDITY FOR UNLISTED SECURITIES The Trading and Investment Platform for Unlisted Securities Series 2 Capital Raising July 2020 Strictly Confidential 2 Legal Disclaimer General: The information provided in this presentation pertaining to
July 2020
Strictly Confidential
Strictly Confidential
General: The information provided in this presentation pertaining to PrimaryMarkets Limited (“PrimaryMarkets" or the "Company"), its business assets, strategy and operations is for general informational purposes only and is not a formal offer to sell or a solicitation of an offer to buy any securities, options, futures, or other derivatives related to securities in any jurisdiction and its content is not prescribed by securities laws. Information contained in this presentation should not be relied upon as advice to buy or sell or hold such securities or as an offer to sell such securities. This presentation does not take into account nor does it provide any tax, legal or investment advice or opinion regarding the specific investment
and all liability that may be based on such information or errors or omissions thereof. PrimaryMarkets reserves the right to amend or replace the information contained herein, in part or entirely, at any time, and undertakes no obligation to provide the recipient with access to the amended information or to notify the recipient thereof. The information contained in this presentation is intended only for the persons to whom it is transmitted for the purposes of evaluating the Company. The information contained in this presentation supersedes any prior presentation or conversation concerning the Company. Any information, representations or statements not contained herein shall not be relied upon for any
information in this presentation by you or any of your representatives or for omissions from the information in this presentation. Additionally, the Company undertakes no obligation to comment on the expectations of, or statements made by, third parties in respect of the matters discussed in this presentation. US transactions to be offered on PrimaryMarkets platform will only be offered through a U.S. FINRA/SIPC broker dealer. All transactions in non-U.S. jurisdictions are facilitated by PrimaryMarkets. Confidentiality: This presentation is confidential and is intended, among other things, to present a general outline of the Company. The contents are not to be reproduced or distributed to the public or press. Each person who has received a copy of this presentation (whether or not such person purchases any securities) is deemed to have agreed: (i) not to reproduce or distribute this presentation, in whole or in part, without the prior written consent of the Company, other than to legal, tax, financial and other advisors on a need to know basis, (ii) if such person has not purchased securities, to return this presentation to the Company upon its request, (iii) without the prior written consent of the Company, not to disclose any information contained in this presentation except to the extent that such information was (a) previously known by such person through a source (other than the Company) not bound by any obligation to keep such information confidential, (b) in the public domain through no fault of such person, or (c) lawfully obtained at a later date by such person from sources (other than the Company) not bound by any obligation to keep such information confidential, and (iv) to be responsible for any disclosure of this presentation, or the information contained herein, by such person or any of its employees, agents or representatives.
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BUYERS Own Research Takes Time Missing Know- How Paperwork SELLERS Expensive Gatekeepers High Minimums No Investments Bad Investments High Fees Lack of Diversification
Private Trading Hubs | Secondary Share Sales | Capital Raising | Investor Centres | Corporate Advisory | Research | Cap Table Management SELLERS BUYERS COMPANIES FUNDS
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Offer Size Why PrimaryMarkets? Structure Use of Funds Our Mission Raising A$5M @ pre-money EV A$15M
unlisteds is difficult to source, transact and inefficient.
Australian unlisted public company – ordinary shares.
Key to Success Clear and precise roadmaps for enhanced Technology, Products and Expanded Market Reach. To empower Issuers in a more compelling regime by providing liquidity and access to unlisted markets by directly connecting companies/Funds, shareholders and investors. Strategy PrimaryMarkets:
securities in unlisted/private companies and Funds.
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VISION To be the premier platform for buying and selling securities in private unlisted companies and Funds KEY INITATIVES ❖ Enhance investment
deal flow channels ❖ Activate and increase our 110,000+ Investor Network ❖ Expand trading in securities in private and ex-listed companies/Funds ❖ Build out end-to-end online mobile trading App STRATEGIC GOALS ❖ Provide access to trade unlisted securities ❖ Create end-to-end digital trading Platform/App ❖ Build global Accredited/Wholesale Investor Network
AGGREGATION PLAY ❖ Roll-up complimentary growth FinTechs to build scale and technology capabilities ❖ Strategic Partnerships to broaden mutual reach for our investor network and offering opportunities ❖ Exit – Trade Sale or IPO
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➢ New Products ➢ Enterprise TV (Sept. 2020) ➢ Investment Fund (Q2 2021) Trading Platform for buying and selling existing securities in private companies and Funds Connecting private companies and Funds to wholesale investors to create liquidity & presence Multiple one-off trading
securityholders in private companies and Funds Distribution of new raisings by private companies and Funds
Proprietary digital securities registry facilitating title T+0
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Centralised
Decentralised
✓ PrimaryMarkets ✓ Carta ✓ Forge/SharesPost
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supermarket model.
speciality store model.
PrimaryMarkets is analogous to a smart phone’s
technology platform Private Trading Hubs for each company/Fund on the PrimaryMarkets Platform are analogous to the Apps on a smart phone
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Price Discovery Liquidity Enabler Far-reaching global Investor Network Speed of Execution (aim from T+60 to T+0 Transparency, Independence and Trustworthy
Examples of Private Trading Hubs
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Companies can stay private longer by providing liquidity on an on-going basis, not just at exit. Secure, efficient controlled and independent. Features include: ✓ Flexible Access: Company sets the rules - shareholders only, invitees or
✓ Flexible Share Trading Rules. ✓ Transaction controls: Timing and conditions of sale determined by the company. ✓ Investor Resources: Company determines what is made available. ✓ Integrated processes for settlement.
PrimaryMarkets liaises with Company to update Share Register and issue new Share Certificates Seller authorises Escrow to complete - Seller receives funds less Fees Completion of transfer document (DocuSign), title re-confirmation then Buyer authorises release of funds Online Escrow Account established - Buyer transfers funds into Escrow Seller and Buyer complete online KYC/AML/Wholesale Investor ID verification Trade is matched offline and finalised PrimaryMarkets confirms trade details and publishes trade notice Seller or Buyer submits trade notice Seller and Buyer register online & accept T&Cs Issuer provides Share Register, Investor Resources data & Trading Rules
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Estimated time to list an SME is 1.5 years The average cost of IPO is A$600,000+
Estimated time to list is 2-3 weeks Cost of Private Trading Hub A$25,000
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Case Study – Tyro Payments Limited Private Trading Hub now ASX-listed
A$38M+ of unlisted shares using our escrow services and online AML/KYC and Buyer Investor Status processes.
PrimaryMarkets Platform at A$1.07 per share in August 2016.
through the Platform saw consistent share price growth.
September 2019 just prior to the announcement of the proposed IPO, delivering up to a 275% increase on the ASX closing price on 6th December 2019 (Market Cap A$1.3B). Case Study – Planet Group Holdings ‘BY INVITATION’ Private Trading Hub to support pre-approved trading windows
Holdings (PGH) with an independent, efficient and controlled market to support the needs of its shareholders (EV ~A$80M)
the Platform to purchase shares.
address the liquidity needs of shareholders without the pressure to IPO. Case Study – Haoma Mining NL Ex ASX listed now Private Trading Hub
existing shareholders and eligible Buyers.
registry.
liquidity for shareholders and minimises costs and regulatory requirements necessary for an ASX listing.
secondary share trading for shareholders. Case Study – AIRR Holdings Limited Private Trading Hub now taken over by ASX listed Elders
PrimaryMarkets trading hub in May 2018 was A$6.60 to last traded price pre takeover in October 2019 of A$8.50.
@ A$10.85 per share – EV $157M delivering up to a 65% increase from takeover.
registry.
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What does all this really mean? ➢ Illiquidity for shareholders, investor short termism, limited broker support and difficulty raising new capital. ➢ Initial and ongoing high costs. ➢ Compliance brings costly infrastructure and increased overheads. ➢ Strategic & operational focus taken away with high-maintenance compliance regime. ➢ Attracts undue attention from shareholder activists, short sellers, ligation-funded class actions and opportunistic takeover offers. ➢ Exchanges enforces controls on companies for diversity, gender targets, social responsibility and “social licence to operate”.
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Features include:
transparent and orderly environment.
liquidity across all unlisted/private securities.
sale including partial Founder sell-downs.
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View all activity across the register Transaction confirmation Change view between Issuers & shareholder Issue Holding Statement Issue New Securities
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Company’s tab with drop down of Investor Centre Resources Live Share Price and Historical Graph Information regularly updated Company Banner Ad
Homepage
INVESTOR CENTRE FEATURES ✓ Marketing Communication: Regular communications (eDMs) to our 110,000+ global Investor Network. ✓ Platform Prominence: Company is prominently positioned
✓ Targeted Investors: We can create specific campaigns accessing PrimaryMarkets’ Investor Network. ✓ Dedicated Customer Support ✓ Investor Resources and up-to-date Information: The Company determines what information is made available. ✓ Corporate Video and Commentary Note: Creation of institutional-grade corporate video and Commentary Note to better educate investors.
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Identify Investments, Review Offer and Trade (Buy/Sell) Clearing & Settlement – T+0 Cap Table Management Onboarding Investors Onboarding Issuer
Investor Application KYC/AML/CTF Compliance Investor Status Accreditation Signup Issuer Application Investor Resources & Trading Rules Open Private Trading Hub
Investor Management
Admin Console Portfolio Management
Network Management
Investor Relations (Forums, Expos) Digital Marketing Mobile App Check-in
Offline
One-Off Secondary Trading Corporate Advisory Capital Raises
Online
Investor Connect
Trading Platform (omni-channel)
Issuer Resources Info Issuer/Investor Communications
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➢All “blue-chip”(above US$50M EV) local companies / Funds. ➢Locally listed companies / Funds with Cap > US$100M.
investors, issuers and intermediaries.
directors, HKEX, accounting bodies, broker networks).
intermediaries to introduce PrimaryMarkets to local players.
PrimaryMarkets partners with local participants:
and Partnerships to align interests.
blue chip companies and Funds. PrimaryMarkets will expand its Technology deployment to connect with:
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Current corporate challenges for our Target Market Unlisted Private
Leading (2,500+) unlisted companies and Funds
Listed
Companies with market capitalisation of A$100M or less
governance
Private companies can achieve higher private valuations Unicorn valuations not always higher at IPO PE Firms will often look for liquidity prior to IPOs Founders, early-stage investors and employees
liquidity High cost burden and time to IPO and remain listed Total Market Cap(3) A$ Average Market Cap(3) A$ ASX Bottom 50 Listed Companies $29,618,412 $592,368 ASX Bottom 100 Listed Companies $87,087,930 $870,879 ASX Bottom 200 Listed Companies $270,445,050 $1,352,225 ASX Bottom 500 Listed Companies $1,453,246,890 $2,906,494
2,373,568 Companies (2)
(1) ABS National Accounts Dec 2019 5232 (2) ABS 8165 (3) ASX as at 15 May 2020
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AUSTRALIA A$ HONG KONG HK$ SINGAPORE S$ Market Cap - Listed $2.1T (1) $33.4T (3) $58.5B(4) Market Cap - Unlisted $5T(1) $106T(6) Value of new equity raised - Listed $5.4B(2) $312.9B(7) $3.1B(5) Value of new equity raised - Unlisted $1.2B(9) Value of Secondary Trading - Listed $7.4B(5) Value of Secondary Trading - Unlisted $3.4B(6)
1. https://www.bca.com.au/trends_in_australian_capital_markets + ABS National Accounts Dec 2019 5232 2. https://www.onmarket.com.au/about-us/blog/2019-ipos-return-an-average-of-35-2/ 3. https://www.statista.com/statistics/270126/largest-stock-exchange-operators-by-market-capitalization-of-listed-companies/ 4. https://www2.sgx.com/media-centre/20200110-sgx-reports-market-statistics-december-2019 5. https://www.sgx.com/research-education/market-updates/20200107-singapore-small-caps-significant-institutional-inflow 6. http://www.hkgem.com/statistics/ms1/e_MktHighlights201912.html 7. https://www.hkex.com.hk/Market-Data/Statistics/Consolidated-Reports/HKEX-Monthly-Market-Highlights?sc_lang=en&select={5B984B00-9551-4A5B-B3A4-4AFD16B70E88} 8. https://www.pwc.com/us/en/services/deals/library/us-capital-markets-watch.html 9. https://www.smartcompany.com.au/startupsmart/analysis/biggest-raises-2019/
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Upfront Listing Fees Initial Set-Up Fees Trading Fees Monthly/Quarterly Administration Fees Corporate Advisory/Actions Fees Communication Actions / Distribution of Monies Fees Ancillary Fees – Research, Marketing, Events, Escrow
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20 Secondary Trading Private Trading Hubs New Equity Cap Table Management Investor Centres
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21 Gavin Solomon Founder Executive Chairman 30+ years ECM in Australia/Asia including as MD/CEO & Chairman of Helmsec Global Capital which participated in raising >A$1.7B in 2008-2015 Jamie Green CEO/Managing Director Former Head of M&A Advisory at Patersons Securities, Corporate Finance at Austock (Phillip Capital) and KPMG Corporate Finance Rodney Payne Executive (elect) Experienced big bracket banking and international financial services
respected, global Director with extensive networks. David Sarkis Executive Director (elect) 30+ years Risk & Investment management in Australia/Asia including roles as CIO, CEO & MD across Capital Markets and Asset Management Nick Capp Independent Non- Executive Director Founding CEO PrimaryMarkets and Linqto Inc., ex- multinational divisional head (Linfox), ex-Strategic Advisor to Telstra.
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22 Team Members Role Resume Kate Graham Head of Secondary Sales Ex-Merrill Lynch Private Wealth, Macquarie Bank, Deutsche Bank. Joti Singh CFO/GM – Operations & Finance 15+ years in the Financial Services Industry with expertise in managing accounting, finance, HR, client services and ECM. Rick Solomon CTO 30+ years of experience in the strategic planning and technical/operational management. Tiffany Fok Senior Manager Ex-Macquarie Group, Perpetual Investments and CBA. Oscar de Vries Senior Manager Ex-Network officer Volvo Cars and Ferrari Australasia. Jackson Capp Marketing Manager IT and marketing. Strategic Advisors Role Resume Philip Reicherz North American Representative Former Founding Partner SecondMarket Inc, Founder Magnolia Ventures, ex-Non-Executive Chairman of Linqto Inc. Brett Spork Strategic Advisor Former CEO of E*Trade Australia, ex Director Macquarie Bank Financial Services, Aust. Stockbroking “ Hall of Fame”. Darren Vaux Strategic Advisor 30+ years in the technology, property and maritime sectors. Director of commercial, NFPs and Government Boards.
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Investor Network - 110,000+ (40% Australian: 60% overseas)
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Member/Followers locations - 119 countries
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Opportunities reviewed - 1,333+
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Opportunities listed - 333+
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Value of all Opportunities listed - > A$2B in value.
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Origin of Listings - Australia, NZ, USA, Canada, Germany, Malaysia, Singapore, Hong Kong & UK
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Average new unique web visitors per day -115+ Location of Investor Network Location of Website Visitors
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creating, delivering and enabling Private Trading Hubs.
broker-dealers trading in USA Unicorns with USA Buy-Side and USA Sell-Side.
Hubs and Secondary Trading.
global investor reach.
prices.
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help employees sell their shares in pre-IPO unicorn companies.
raising in total US$85.6M.
more than US$1B in secondary transactions through its electronic trading platform, which matches an international set of willing buyers with holders
vested stock
and private shares.
US$85.6M
US$90,000
companies with a global community of investors and provides an integrated equity solution for managing everything from cap table management to stock plan administration.
dealer) was acquired in Q1 2016.
company-sponsored secondary transactions – a new annual record high – with total transaction value of US$4.8B.
US$30M+
US$440,000
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private companies and markets them at specific price offerings to investors.
arranging transactions and charges commissions of 3% to 5% that depend on the size of the transaction.
transactions since 2013.
US$500M
US$100M
US$12.5M
US$120,000
the
private-company marketplaces.
counter marketplace and employs private securities specialists to help navigate company restrictions on the sale of stock, including any right-
facilitates direct investment into late-stage venture- backed companies through its SharesPost 100 closed-end fund.
closed a US$300M Series E (US$1.7B Valuation).
the firm’s series D in Dec 2018 which totalled US$80M (US$800M valuation).
agent for private companies that enables seed-stage to pre-IPO companies to manage equity electronically with the participation
auditors, and legal counsel.
along with stock options, warrants, and derivatives to create a real- time image of who owns what at a start-up.
Merged 20 May 2020
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USA Private Markets sector is now highly active with secondary trading and M&A activity, consolidation of leading broker-dealers at significant valuations.
27 * On 12 May 2020 Forge agreed to acquire SharesPost via cash/scrip offer with Forge valued @ US$160M. Company Employees Est Revenue (2018) Revenue / Employee Total Funding
Valuation/Rev US$M US$ US$M US$M NASDAQ Private Market 139 $61.2 $440,288 $200 $1,000 16.3 MERGED MAY 2020 SharesPost * 110 $72.9 $662,727 $28 $160 10.3 Forge Global * 62 $5.6 $90,323 $89 $200 35.7 EquityZen 50 $6.0 $120,000 $13 $75 12.5 Carta 600 $55.0 $92,000 $443 $1,700 30.9 PrimaryMarkets 7 $1.1 $150,571 $3.0 $9 8.8
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Accredited Investor Status Confirmation AML/KYC/CTF Confirmation of Ownership of Securities – Cap Table Input
Sell-Side Investors for Secondary Trading Only Investors who have been fully onboarded (complying with each relevant jurisdiction) are permitted to offer securities for sale. Only Investors who have been fully
jurisdiction) are permitted to offer securities for sale. Confirmation required as to ownership of existing securities include type, number, exact name of holder with account designation, address, contact name and details. Buy-Side Investors for Secondary Trading Only Investors who have been fully onboarded (complying with each relevant jurisdiction) are permitted to bid for securities. Only Investors who have been fully
jurisdiction) are permitted to bid for securities. Buy-Side Investors must provide prior to bidding exact name of holder with account designation, address, contact name and details. Issuers with Private Trading Hubs N/A N/A
issuer containing full details including type, number, exact name of holder with account designation, address, contact name and details.
Issuers who do NOT have Private Trading Hubs N/A Only Issuers who have been fully onboarded (complying with each relevant jurisdiction) are permitted to have their securities offered for sale. PrimaryMarkets obtains written/email confirmation of Sell-Side ownership of existing securities include type, number, exact name of holder with account designation, address, contact name and details. New Equity Raising by Issuers on Platform Only Investors who have been fully onboarded (complying with each relevant jurisdiction) are permitted to bid for new securities offered by Issuers. Only Issuers who have been fully onboarded (complying with each relevant jurisdiction) are permitted to have their securities offered for sale. PrimaryMarkets uses best endeavours to get all bids participating in bookbuild of new offer.
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Address: Level 16 56 Pitt Street SYDNEY NSW 2000 AUSTRALIA Phone: +61 2 9993 4475 Email: info@primarymarkets.com Web: www.primarymarkets.com Gavin Solomon – Founder & Executive Chairman gs@primarymarkets.com (m) +61 412 978777 James Green – MD/CEO jg@primarymarkets.com (m) +61 406 429 588 David Sarkis – Executive Director (elect) dnsarkis@gmail.com (m) +61 404 938 016 Rodney Payne – Executive (elect) rodney@rodneypayne.com.au (m) +61 421 093 093