Exploring IPO Alternatives: Rebecca Kacaba at the NYC IPO Summit

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At the recent IPO Summit in New York City, DealMaker CEO and co-founder Rebecca Kacaba joined industry leaders for a fireside chat focused on the future of public capital markets. The discussion offered practical insight into how founders can reimagine their path to going public, moving beyond traditional IPOs toward more flexible, founder-driven options.

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A Changing Landscape for Going Public

Traditional IPOs have long been the default route to public markets. But that model is no longer serving every company. Today’s market environment calls for greater flexibility, faster timelines, and more control. Founders are increasingly seeking capital strategies that align with their business growth rather than forcing their business to align with outdated structures.

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Understanding the Alternatives

The session unpacked several alternative structures, including direct listings, reverse mergers, SPACs, and Regulation A+ (Reg A+) offerings. Each route has its own benefits and limitations. A direct listing, for example, works best for companies with a strong existing shareholder base. Reverse mergers can offer speed but now require more disclosure and scrutiny than they once did. SPACs are still evolving, with regulatory changes reshaping how they operate.

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Among all the options discussed, Reg A+ stood out as a compelling strategy. It enables companies to raise up to $75 million from retail investors and has proven especially effective for brands with large, engaged communities. Rather than depending on institutional capital, companies can tap into their own customer base to build not only capital but also long-term loyalty and brand momentum.

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Community and Marketing Go Hand in Hand

A key theme throughout the conversation was the growing role of digital marketing in capital formation. Founders who apply performance marketing strategies—similar to those used in e-commerce—are seeing greater traction in their capital raises. When companies take control of their narrative and own their investor funnel, they’re better positioned to build a lasting investor community.

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This isn't about trying to "go viral." It’s about using data, clear messaging, and targeted outreach to bring the right investors into the fold and turn them into long-term supporters.

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A Global Perspective

The discussion also touched on the rise of Southeast Asian companies looking to list on U.S. exchanges. These companies are often drawn to the scale and sophistication of U.S. capital markets, but success requires careful preparation. Understanding investor expectations, adapting marketing strategies, and building a trusted network of partners are all critical.

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Final Takeaway

Founders today are no longer locked into one path to public markets. The rise of new structures—combined with the power of community and digital marketing—gives companies more options than ever before. The most successful capital strategies are the ones built around the founder’s needs, not the other way around.

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At DealMaker, we’re proud to support those founders by providing the infrastructure, insight, and tools to raise capital on their terms.

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Transcript

Peter Goldstein: Good afternoon everyone.

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How's everybody doing?

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We're gonna grab your attention for a fireside chat.

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And I think this one's really important because I know myself and Joe and Rebecca who will introduce themselves, uh, get a lot of questions about alternatives to traditional IPOs.

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You hear about mergers, you hear about direct listings, you hear about Reg A+ IPOs.

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You hear about these back?

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Well, our goal today is to educate you about some of those options.

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An alternative to traditional IPOs.

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So this is to me a really important topic that people continue to misunderstand.

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What are the timing, what are the benefits, what are the pros, what are the cons? So together we're gonna talk through and walk through some of those discussions today.

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And Rebecca, would you like to go ahead and introduce yourself?

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Rebecca Kacaba: Yeah, sure, I'm Rebecca, CEO, co-founder of DealMaker.

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We spoke earlier. DealMaker is a technology platform. I like to say we make it as easy to sell shares online as it is to sell shoes, so you can digitally market an offering today securely and compliantly, and you can have investors go through a digital checkout process and verify and buy shares in your company, so.

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The offering we did a year and a bit ago that everyone knows the Green Bay Packers fan-owned sports team in the NFL. We set up their online store and allowed the fans to go in and purchase.

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They raised $65 million to build a new stadium for the team, so a lot of people think that digitally marketing and offering it's small money today it's big dollars we can talk in more detail about the Newsmax offering and some of the other companies that we've seen do the Reg A+ to direct listing which is having a bit of a moment, uh, as well as up listings and different uh compositions like that.

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Joseph Lucosky: Uh, good afternoon everyone again. Uh, my name is Joseph Lucosky, and, uh, I promise you this is the last panel I'm sitting on today.

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But you're with me today. Yeah, I am with you, you will not be hearing from me again, but, uh, again, I'm uh managing partner of Lucosky Brookman.

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We are a hyper focused, uh, law firm, um, in the emerging growth and micro cap space and as we're gonna talk about today, very, very keenly focused on not just IPOs but all the alternatives, um, direct listings and, and, and Sacks and these specs, reverse mergers, and, um, very excited to be here and, uh, especially on this panel today, Peter, thank you.

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Peter Goldstein: Thank you both. So Rebecca, I'd like to just kind of dive right in. Uh, some of you heard about Newsmax maybe for the first time here today. Uh, I believe it's really a groundbreaking opportunity inside of a regulation A plus what they're gonna, what they're calling a mini IPO. Uh, it was oversold, uh, and opened and had a tremendous debut on the market as an alternative to a traditional IPO. And I've been involved in regular offerings really probably for about 8 years now. And I, I think this is a groundbreaking moment and I'd love to get your perspective on what you see inside of your experience, uh, the work that you're doing also as part of the reform for democratizing, investing, and the near term opportunities inside of regulation IPOs.

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Rebecca Kacaba : Yeah, so as we heard earlier, you know, Ted was talking about the work that they did on Newsmax, they raised a few 100 million, a few 100 million prior to listing to their community and it really shows you the power of having a community around a story because people get very passionate about the stock they love what you're doing they follow you through the good times and the bad and so we saw with Disney even this year right when there was some shareholder activism, the retail community came out and they supported management and said no this is the management team that we want to be leading this company so retail has been.

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In stock for a long time, it's always been a traditional part of the stock market, but in the last, you know, I would say 5 to 10 years with a lot of electronic trading, we saw retail activity go down. And so the way that Congress wanted to combat that was to bring in the Jobs Act about 10 years ago and say we would actually want everyday Americans to be able to participate in the stock market and today the technology has become so advanced that it is becoming easier and easier to raise large amounts and you know I was at Congress about a month ago talking to them about even more of the advancements they're looking to make in the space so that it makes it easier for you guys to capitalize your businesses and have a diverse capital stack. You're going to have institutional capital for some things and just know that the retail base that you have can do different things with your company. We've got people pairing different kinds of perks right? So discounts if they come into a location or become beta testers of a technology product, really the opportunities are endless for you to engage people in your business. When I first, you know, I'm a founder as well when I first went to capitalize dealmaker, I went out to all the lawyers and bankers that I knew and said, look, I'm building a platform that's gonna help the capital markets operate better and more smoothly and so those are the people that were the initial users of my system and I was able to get to revenue much quicker because I had a built-in source of customers that would support me and still support me to this day through the good times and the bad so that's really what building a community is all about. Social media allows you to do that for your brand in a really new and exciting way, and we're seeing lots of different businesses experiment with it and try all kinds of different things that are helping to leverage the business.

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Peter Goldstein: You know it's interesting you talk about building community and then converting that community into being stakeholders.

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And I don't know any better to buy anybody better to buy stock in any of our companies than a committed community because they become sticky shareholders and that's what we would all want on our cap table uh our sticky shareholders. And they have an interest in the company doing well and so one of the benefits of being able to actually solicit from not just your community but from those that you don't have relationships with is utilizing the crowd funding options that exist.

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Rebecca Kacaba: Absolutely, absolutely and those communities, as you said, love the stock they continue. With the stock and they continue to support the company we saw a lot of these kinds of companies who are retail back in the recent stock market turbulence, the stock performed better than the average market and so that really shows you what having a diversified capital stack can do for the company once it becomes traded as we said earlier because IPO is really day one.

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Peter Goldstein: If you look at it a little bit and Joe, you, you give this advice I'm sure to your clients every day from your perspective there's a critical piece of building your shareholder base before you get listed and a lot of companies. Bypass that they wait until the end and they need 300 or 400 shareholders and a lot of times the underwriters are scrambling to be able to build that shareholder base. I'm a big advocate that you wanna have a significant shareholder base before you even go public. But Joe, and if you compare this from a traditional IPO to the ability of utilizing crowd funding to build your shareholder base, what are some of those differences that you recognize? Well,

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Joseph Lucosky: It's a great point because I was sitting here thinking, listening to your earlier panel and listening to your question now. It is a really, really important part of the uh component part of the process, you know, in the traditional IPO.

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Most companies that have uh legacy shareholder bases, that's friends and family maybe they did some bridge rounds, investor rounds you come with significant shareholders. That's great, but for a lot of companies they have, you know, very tightly held or maybe just their neighbors, friends, and cousins, and the bankers, as Peter says, have to scramble during the deal. Maybe scramble is not the right word, but bringing 300 to 400 shareholders to even qualify.

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Um, what we're seeing now and Peter's point is that, you know, being able to, uh, build a community or build a following and do a raise in maybe a more we'll call it or less traditional way to show up with your community or show up with your shareholders to make it easier on the deal, easier on the bankers is um.

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You know, I think a lot more companies are starting to explore, but what I really wanna talk about, and you mentioned this, you know, is Reg A+ in this community building concept right for every company because we get that question so many times, you know, Newsmax worked well because they had such a loyal following, right? Just look at what's going on in the country. You weren't gonna talk to Newsmax shareholders out of investing, it doesn't matter what happened, what they said they were investing in Newsmax. So how do companies do it? That maybe isn't as sexy, don't have an amazing retail story going to use Reg A+ in the future to bypass these traditional IPO processes because that's what we're seeing, that's the questions we're getting.

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Rebecca Kacaba: Yeah, I think that's a really great point because when we look at companies over a 9 year life cycle, they actually build up and do their biggest raises in year 4 and 5 for us.

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We've got companies like EnergyX, uh, Lithium Exploration Company, right? They've done over $100 million now. They did $75 million this year from a retail audience, but that is probably their 3rd or 4th race, and they've paired that with institutional capital in between General Motors Ventures and a couple of other folks who are institutional capital like that.

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So it's really something that you start building a community, you start to read the data. You understand who your buyer is and it becomes more and more powerful over your life cycle.

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I've got another company, Miso Robotics, right? They've done a number of community raises with us. They've now raised over $100 million as well from retail capital over the course of about 5 to 6 years and then eventually post IPO they can continue to do that.

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So there's lots of different ways that companies are pairing all different types of capital with their strategy and you make an important point that this isn't going to work for everybody so who does it work best for?

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It works best for folks. Think of it as thumb scrolling through a TikTok ad if it's earlier about the messaging having to be simple, you have to really be able to explain your business very simply whether it's institutional or retail and you have to be able to make it exciting and then you have to have good metrics as well you have to be in. An industry that's in the zeitgeist, um, tech companies do well AI robotics, um, sports very up and coming, uh, biotech does well as well, and the lithium company like I mentioned, I mean that isn't something traditionally as a category that's done well, but they had a really interesting play on the story and they have a really innovative business that people got excited about lithium powering the future of America's economy.

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Joseph Lucosky: You know, it's funny, I, um, I, we talked earlier about, uh, the two jobs of founders, you know, running your business and then running the public company. It's, it's very important you get both of those right and and there's a lot of disconnect in the industry what founders believe and what they play, what role plays more, but I had a founder say to me the other day I was talking to him about this exact topic ever since news back when, and it's the hottest topic in our industry.

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And he said to me, he said, Joe, are you telling me now I have 3 jobs? And I said, What do you mean? That's why I have to run my company. I have to run a public company, and now I have to be an influencer.

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And I said, I'm not quite saying that, but I said we do have to find a way to build a community or build the following. So it was a funny little moment, um, but it really goes to what Rebecca is saying, and I think, you know, as companies, as you, um. You know, follow, uh, the progress in the Reg A+ direct listening space, especially now that NASDAQ has changed the rules, it's gonna everyone's looking for a way around that $15 to $18 million dollar IPO raise because not every company needs that kind of money. Not every company wants to suffer that delusion or get a great valuation, you know, at the time of IPO. So direct listing, especially with the Reg A+ component. I will make one point though.

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If you haven't built a community and you don't have this retail following, you know, from a crowdfund or Reg A+ or Reg D or some other, you know, private placement, then, um, you can still, uh, you can still use alternative ways to get to NASDAQ, uh, or the New York Stock Exchange.

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You know, don't be discouraged by the fact that you haven't taken advantage of these sort of um vehicles to raise capital. There's also some other workarounds we're seeing, you know, even coming back through the OTC because the rules have loosened a little bit. We talked about that in our prior panel, but, um, it is, it is interesting now and I'm gonna think about that third role as we go forward for founders and CEOs.

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Peter Goldstein: It's always interesting how the market shifts.

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But there was always a new way to be able to move through if you think about to put some context to it, you know, traditional IPOs were the norm and that was largely almost all institutional. You would be lucky if you were a client of a bank and they gave you an allocation and you got a piece of an allocation. Those were, those were those days in the last 5 years, you know, we've really seen this shift where 25-30% of buying and trading in an IPO is done with a retail base and so things will continue in my opinion, the trend that way as one option and this is also only for North American companies. There are a lot of foreign private issuers in the room. They also want to clarify and you can help as the expert here.

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Rebecca Kacaba: Yeah, the rules do require uh North American head office, so it is something to be cognizant of and uh it makes sense, right? The American retail audience is gonna see typically a story that is tied to America in some way to be comfortable and to make the investment.

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Peter Goldstein: Yeah, it's just important because there's a distinction here. There are certain benefits of being a foreign private issuer and, and then certain to to being in North America, um, so you know you mentioned some of the, you know, the alternatives, uh, and I, I just wanna kinda open up the discussion a little bit because people are exploring this is one option, but. We also hear a lot and I'm sure you get a lot of requests around, hey, can I do a reverse merger? Can I merge into a NASDAQ or an NYS shell and, and that's often thought of as a workaround. It's often thought of as a faster, cheaper route, uh, and I'd like to get your thoughts around that.

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Joseph Lucosky: Yeah, I don't know if anything's faster or cheaper in this market. But I will say that uh 11 last point on direct listings. I will say if you're considering a direct listing and you have a uh a legacy shareholder base, we used to be able to use that to qualify in an IPO. We can no longer do that - NASDAQ is only looking at primary offerings. We talked a little bit about that $15 million new rule coming out of primary offerings, but if you are doing a direct listing, there's a couple things you gotta be really careful about, and I think the Reg A+ take this risk out of the picture because generally when you qualify for a direct listing you have to really prove your value to the exchange whether that's through a fairness opinion or some other valuation metric and they don't just look at that because you know you can buy a valuation report they're not that hard, right? So the exchange will now go back and look at your history in the past.

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Where did you raise money and at what valuation? And if there's a big disconnect between where you're raising money and the valuation report.

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They're either gonna put you through the wringer or deny your application. I would argue that, uh, raising money privately is different than a valuation you would get with liquidity on an exchange, but the listings group at both New York Stock Exchange and NASDAQ have yet to agree with me.

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So we need to be careful about the history, but just to get to your question

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Peter Goldstein: before we get there because I think it's a really interesting point for the room.

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In a traditional IPO, the market is really set by the investors. I mean, the underwriter's job is to create a range to determine the appetite and the evaluation in which investors will want to buy your stock in a, in a Reg A+ or direct listing. That's not necessarily the case. It's more set by the company and it's more set by evaluations that are often done on forward looking projections. And so one of the big mistakes that happened early on in the first generation of Reg A+ is they overvalued their companies during the Reg A+ process and then they went into the open markets and the institutions didn't agree with those valuations so valuation is super critical and as we're talking about these options, some of those nuances.

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Make a big difference between how you get a deal done at what valuation, but to think it all the way through about what happens when you enter the public markets.

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Joseph Lucosky: Yeah, and I think it's a great point because we're talking about really bridging the gap between listing evaluation and then market valuation. And sometimes the two don't always equal because you're trying to chase a higher metric for the category that you're listing for and the market may not agree with that at all. In fact, it may be completely opposite.

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Peter Goldstein: Typically they want a discount, right? not overpriced and I think you know about to be curious to get your input on that but founders as we like to talk about earlier, of course they're always after the highest valuation, the highest return it's not always the best strategy. Because the market once you're trading is gonna look at you very, very differently. One of the reasons Newsmax is so interesting is because they nailed it. There was more demand than there was supply and, and the market reacted that way, but that's not always the case.

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Rebecca Kacaba: Yeah, absolutely, I was gonna use Newsmax as an example because you can see that stock price bounced because we raised $65 million from retail and the Reg A+ cap is $75 million and they could have done way more than that, right? So there's a lot of people wanting to get in on that offering who couldn't who are then buying in the open market after and so I think that's a critical component of your capital raising strategy.

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One of the things that we see the most successful. Founders being very savvy about building up through their consecutive raises and offering as much as the business needs of course to hit its next milestones but not going out to try and raise too much so call it being an influencer calling creating that FOMO around your story, right? I've only got 5 million available. It's gonna cap out and then there might be another offering available 6 months or a year once the company's. Hit some milestones and that's how you want to be thinking about it once you're a public company anyway so you're really gradually getting into that progression of raising money, hitting milestones, showing the market what you can do, and then raising again and that allows you to really build the stock price.

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Joseph Lucosky: You know, I, I wanna answer your question about reverse mergers and alternatives, but I, I wanna ask you a question, Rebecca, because I think it's important you and Ted talked about on the earlier panel and I've had conversations with Ted.

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You know, you don't have to be an influencer to do one of these deals, right? There are other ways to generate retail interest through digital marketing and other strategies. Maybe just talk about that for a second because I think it's important to, you know, for everyone to take away that, you know, you don't have to go and, you know, uh, dance on TikTok. You, you, there's other ways to generate the right that you have to pay for it, of course, but there's other ways to do it, so don't be discouraged by that sort of third job category we keep, you know, effectively referenced.

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Rebecca Kacaba: Yeah, it's effectively performance marketing right? it's the same thing that a business does to sell a product online. I joked earlier about selling shoes online, but it is effectively the same business strategy, so you are marketing your business you're coming up with ads that make it quick and easy to understand what the business does, and then you're driving people with those ads to a landing page where they can read more about the story they can read the offering circular, and they can really get familiar with it.

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And then eventually they go through an online buying process and they check out and buy and invest in the stock and then you're gonna keep doing your communications with them like we talked about earlier and so the CEO often is not the person that's doing all of that you've got performance marketer um think of it like you're in house IR team light, right? You're not yet public so you're not doing that full public company infrastructure, but you're kind of dipping your toe in the water and you're getting a little bit set up to do that. And you're testing the messaging that works so that by the time you hit IPO day or your big pre IPO Reg A+, you're in a position with news like Newsmax was where you've got a large community they understand the story, but most importantly, you understand the story, you understand what you're selling to the market.

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You come off as a stronger CEO because you know your company and you can speak intelligently to the milestones your company is going to hit and how you're going to make people money.

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Peter Goldstein: And, Joe will get there regarding the mergers, but I think it's important for me to stand.

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There is a cost to capital raising money this way.

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And it actually sounds very appealing when you can talk about going to your community, but there's a big marketing component to this, and, and that requires a campaign, requires a big budget, and that's to be incorporated into the cost of capital and the overall cap stack that you bring out.

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Rebecca Kacaba: Absolutely it's part of the brand development and there is a cost of capital as well.

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Joseph Lucosky: Um, let's talk about reverse mergers for one second because I've talked with some of you in the audience a little bit at the lunch break about this and we get this question all the time, um, without getting into all of the metrics and details and sort of listing requirements, I will say this, um, over the years, especially last July when the SEC passed some new rules about disclosure and how these mergers can be effectuated.

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In the process, the gap between the traditional IPO and a reverse merger got a lot closer together. It used to be that reverse mergers were cheaper and faster, and IPOs were longer, more expensive and more risky.

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Well, with the new rules and in part or really in some, this is what it says if you're gonna do a merger with the NASDAQ or New York Stock Exchange, basically an exchange listed company.

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And the existing companies in the public company, the Pubco, the Nasdaq, the New York Stock Exchange are going to spin out or discontinue or do something other than stay and operate.

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You know, either at closing or within a reasonable amount of time after closing, they're gonna treat you for disclosure purposes and review purposes as if you were doing an IPO, and you will get all of the benefits and burdens of doing an IPO.

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Peter Goldstein: Well, let's underscore that for the audience because, because he nailed it.

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And that's the misunderstanding that I think so many people get when they talk about can I do a speed merger? Can I go quickly to the market? Well, the SEC and NASDAQ don't look at it as a speed merger. It's actually more cumbersome. Would you agree?

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Joseph Lucosky: Yeah, it's more cumbersome and it's more risky because you have the risk of now this public entity, uh, either being, uh, on a delisting notice or having some other restructuring issues. Obviously you inherit the liabilities and contingent liabilities.

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But I will say that there's been a, um, you know, a new development in this merger world where you know you can step the merger through the process now it's a little bit controversial and it doesn't always work and it's gotta be, you know, really structured properly because NASDAQ and New York Stock Exchange are not stupid. They understand nobody wants to meet the IPO requirements, but in some cases.

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For the right companies and the right industries with the right synergies, it can work and it can work very well, especially if you have a legacy investor or an institutional investor who's willing to commit capital at the time and generally they are because they're stuck in a deal that's not doing so well. If you can find a new company to come in that's complimentary and synergistic, then you may be able to get out of those IPO like rules, but other than that you're pretty much on par these days.

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Peter Goldstein: agreed.

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So if we compare now traditional IPO reverse merger, and a Reg A+ IPO, I think you can all see they're all different. And so this is not a one size fits all, right? There are unique characteristics of your company, of your own strategy, your own timeline, and, and hopefully we can expand a little bit more about the pros and cons.

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On each side because not only we talked about these options but I think there are some real benefits and there may also be some dark sides.

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Rebecca Kacaba: I was hoping you're gonna ask Joe that one.

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Joseph Lucosky: Well, I, I actually have something to say on this because I was thinking while you were talking, so I'll give you a couple seconds to cover.

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Uh, I want to be clear on the reverse merger. So what we said before is they're coming together and they're on par.

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Really when we talk about that, we mean the regulatory side. So whether or not you can do what you can do after listing in S3 and SA, all these little short forms, um, you know, tactics we use to raise additional capital have come closer together. They treat them as a kind of new IPO company, you know, the disclosure prior to the deal used to be that you can do a reverse merger, not have a registration statement.

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Now you have to depend on what that legacy business is doing, but it doesn't mean you have to raise $15 or $17 million in fresh capital through an underwritten deal. Now it does mean you have to meet the IPO requirements, but generally if you're already a trading public company, you have probably at least a $5 or $10 million dollar float, sometimes a lot more $15 to $20 million that takes you through the requirements to get listed. So it might be a little bit easier from a listing perspective um and you know there's other requirements you have to meet share price is the one that usually is the problem because it's below $4 so you gotta consolidate, reverse, split otherwise restructure to get there but don't confuse the regulatory side with the actual listing side because it is still a little bit easier on the listing side, um.

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You know, for different reasons.

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Rebecca Kacaba: Yeah, I think that's right, so.

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What do I think about it? I'm a CEO, right? If I was gonna take dealmaker public to cut through all the noise, what does it matter for me? It's my job, it's your job as the CEO to structure a transaction that's gonna make the shareholders the most value.

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And so if you have. A great lawyer like Joe, they're gonna get you through any of those transaction types on approximately, you know, similar cost, similar timeline every deal is gonna have its ups and downs but as long as you've got a good counsel and good bankers, you're gonna get through it.

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So I think about it at the end of the day you're trying to get your company listed how are you gonna create the most value for people if you've got a back that has some cash in it and you can complement that with some additional types of capital and create a shareholder base like we talked about on the panel earlier that's gonna be with you through the good times and the bad, then maybe that's a viable option if there's a listed company that does have a spin out with an asset that you can leverage and you can create some institutional partnerships that way maybe that's a good option too if you want more, do it yourself and you think that you can create the syndicate around you that's gonna be beneficial, then I think a direct listing can be quite an attractive opportunity as well.

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So that's kind of how I would break it down.

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Peter Goldstein: Well said. Well said, guys. So you mentioned Sack, so I don't want to leave out because SPAC is a big conversation. And we have clients and we have others in the room that are exploring that as an option and I think to Joe's point it's, it's fairly similar in the way it's treated by the regulators as a reverse merger and there are some pros and cons.

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The one thing that I wanna make sure everybody understands is the money that is in the SPAC. Is not likely to convert at the time of the merger and this may be the most misunderstood aspect that I get asked all the time. Well, the bank raised $100 million. That $100 million is gonna come over on our deal. That's just not reality. The majority of that money north of 90% does not convert at the time of the merger.

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So then what's happened recently, which is of great benefit to the stock market, is that the pipe market has come back. So at the time of that merger in order to raise money, you need to do a private placement into the public entity, and that's the way that those deals are now being done, but it's not likely to be $100 million. It could be more than $10- $15 depending on your size. We're here, small cap micro cap.

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So SPAC is an option. It's very, very viable, but do not make the mistake of thinking that the original money that was raised in the back at the their time of IPO is gonna convert at the time of the merger. Those institutional investors have the option and they have some rights, so inside of that, the model and the the back industry is changing quite a bit. Uh, it's not going away. It's gonna continue to be one of the options that's added into the mix, so all of these nuances come back to me very much to its specific to your own company's needs, timing requirement, and your own access to capital. So in every one of these, including the SPAC, I would say almost all companies have to be prepared to spend a significant amount of money.

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Joseph Lucosky: I would say on the uh I got a lot to say on the back side no surprise, but Peter said it very well. One thing I will say on the SPAC, um, you're right, most of that money over the last few years has disappeared from the trust, so 90% more, 90% plus more redemptions.

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So you know, SPAC raises $100 million. You're lucky you have 10 million stays, but here's the thing.

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You know, in the micro and emerging growth space, you know, I was never a fan and we've done a number of these SPACs, but I've never been a fan of.

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Um, a micro cap company or an emerging growth company that doesn't have substantial revenue, substantial numbers doing a dSPAC because the market, the SPAC market is sophisticated. A lot of times it doesn't either understand it or it just throws their hands up and says they're not ready and these investors in the SPACs, the original SPAC deals, the money and trust, these aren't generally retail investors. They're insiders, they're deal makers, they're people that understand the game.

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So if you're going into a spack in a micro or emerging growth company and you don't have something, some flash to you, and I'm not talking about um being an influencer, I'm saying some size and some scope and some substance.

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Chances are that money is gonna fly out the door, get redeemed, and you're gonna be left facing the pipe market as Peter has mentioned, which is a very unforgiving market.

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Um, pipe investors are only out for one thing.

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Protecting pipe investors, they're, they're, you know, they're, I'm not gonna say they're not real investors. They take risks, but they're not looking at your company fundamentally beyond the basics. They're looking at your company technically with a tremendous amount of downside protection. So I like alternatives, the Reg A+, the direct listing, the reverse merger, or other methods to get a micro or emerging growth company listed.

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Peter Goldstein: Well said, Joe, and I, and I think you know the takeaway is there's a different tool. That has to be applied for the right job at the right time and, and the, the biggest mistake I would, I would add to what you're saying about micro and small cap doing a dSPAC is back to evaluation.

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And the fallacy that you think you can create a valuation that the market is gonna buy into on the institutional side and in the aftermarket after you go public.

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And you can have a valuation rule with the SEC, it has to be 80% or greater, you know, of the value of the SPAC. So the game that's being played is people will increase their valuation to be able to meet those requirements, but that's not market driven. That's a way to get a transaction done and for all of us that are looking to build sustainable companies you really need to have those fundamentals in place and that's a critical kind of.

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Moment when valuation growth strategy and the right choice in which way to go public comes to then the decision making and each one of these alternatives has again their pros and their cons you know you're you're hearing from three different experts about all those you know I think that from your perspective if you're looking at the options you really need to understand those nuances and what does it mean at the time of when you are ready. You know, the preparation, you've heard a lot of talk today about preparation.

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To me, the majority of the work that you're doing in a traditional IPO, Reg A+ IPO, it requires the same amount of thought.

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Governance, systems, control, planning, board governance, oversight, leadership. And then at a certain point you need to choose your lane.

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But that preparation can serve every one of you.

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Up until the point when you're ready, and this is, I think the other mistake that people make with listing options is they want to lock into one.

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And the market is unforgiving that way. You can live by one, you can die by one, but you can take yourself to a certain point in your journey before you actually have to lock into that one.

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Joseph Lucosky: Yeah, listen, I, I think keeping your options open is is a good thing and a lot of the work from my perspective as a lawyer and sort of a, you know, uh, uh, a quarterback if you will of the transaction process we be, we're very mindful of repurposing product.

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To switch gears quickly or pivot. So for example, where you know you have to get an audit no matter what structure you choose. You need a good outsource CFO no matter what structure you choose.

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You need to have good disclosure.

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No matter what structure you choose, but if you keep that process tight and, and, and have somebody in charge who knows what they're doing, even if you pivot later in the process, you're not gonna lose or start over 100%. You'll lose a little bit of waste, but you're gonna be able to repurpose that time, effort, resources, value, cost, and that's where companies can be the most successful, keeping their options open but understanding.

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Um, what they can reuse, what they can't in planning for the future, so they're not constantly restarting it 100%.

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Well said, Rebecca, any closing comments?

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Rebecca Kacaba: I just want to underscore what Joe said. I think that's exactly right. You have a good lawyer. I did that in my background so many times you pivot transaction types. That's normal. You can do that as the team management. You wanna be agile and take the company where it needs to be, and I would add in addition to the law firm and the audit, you're gonna need an institutional base, a retail base, or IR strategy, all of these components you're bringing together regardless of what transaction type you're doing.

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Peter Goldstein: Yeah, that's uh the shameless plug. That's our job. We help to bring all of that together because it's a tremendous amount to try to manage that on your own and if you've taken one thing out of today you need the right team. And yes it's a shameless plug, but why not? I'm hosting so you know that the reality is that you know these nuances are critical and if you make a misstep it can set you back.

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Like in a detrimental way.

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So before you know you would choose to make commit to any one of these scenarios, make sure you have good guidance whether it's us or others to really choose the professionals that have been through that are current, you know, there's a joke in the IPO market that if you've done two IPOs, you're an expert. Well, the question really that I'd be asking the people that are advising you is when.

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What's your relevance in this market? Things are moving not just around the world at a rapid pace in this market, day to day.

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Hour to hour, get relevant current expertise to help guide you who knows what's happening with market intelligence.

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Joseph Lucosky: I would just add to that as closing.

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Look at the data as well. You know, one of the reasons why we started tracking data 5 years ago in the micro cap is because it didn't exist.

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Most service providers, uh, information providers don't track anything under $50 million or if they do, it's very inconsistent.

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We honed in and focused just on the micro cap, so we use this data to make better decisions for our clients to save money, less dilution make better decisions, but focus on the data because if you don't.

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You're just then asking someone their individual experiences.

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My individual experiences are gonna be different from yours and yours and yours, and you don't wanna be limited by that one advisor's individual experiences. So I'm not saying you have to use our data or use us. I'm just saying try to take a little bit of a data driven macro approach to the advice you're getting and then gut check that against, you know, others and their sort of data.

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Or you can just call me and I'll give you all the data and then you don't have to worry about it. But the point is to focus a little bit on data as well because it really tells the story as opposed to individual experience.

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Peter Goldstein: It's great, Joe and if you think about any decision making.

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You want to have your decision making be based on fact driven first.

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And then of course there are the nuances and understanding the basis of your decision making because you're always gonna have options but check on that market intelligence, check your data, talk with your experts and understand there are a myriad of options that are gonna be custom fits for your specific company.

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I think we're out of time.

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So maybe we got time for one quick question if anybody's got a.

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Joseph Lucosky: yeah, so there's, there's many, um, I will say they're, they're a little bit more challenging, uh, on the qualification side than an IPO, but they're easier in the sense of you don't have to raise that capital that you can raise capital. They changed the rule two years ago where you can raise capital now alongside a direct listing, but generally I would say.

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Everybody has to meet the shareholder equity requirement of $5 million or 4 million, you know, depending on the different tiers, but for the most part, the market value of listed securities starts at about $30-35 million.

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And the initial share price is locked in at a minimum of $8 so that's the general requirements.

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Now if you, if you don't have to raise money and you think raising $16, $17, $18 million in this market is tough, then the direct listing is a good idea if you have a legacy shareholder base or if you've done a Reg A+ or a crowdfunding or a Reg D and you have this legacy shareholder base, that's a great option for direct listing.

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Peter Goldstein: I think it's a great way to close, which is that there are also hybrid variations of everything we've talked about.

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And hybrid could be as an example you use another form of crowd funding to build a shareholder base before you get to a traditional IPO so there are different variations and and different requirements based upon your strategy, but there are. Blends that can be utilized to get a better outcome than just picking any particular one. So those are some of the things that I think will be coming as nuances as ways to integrate all the different perspectives between the options that are available to you all.

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Yeah Last one.

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Audience member: Yeah I was actually asking the question.

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So my question here is Southeast Asia. They're trying to find some Asian market.

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Peter Goldstein: There's a real clear indication from the market.

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Here in America, 60-70% of small cap listings have been foreign private issuers. The majority of those are from Southeast Asia, so there's a big appetite for companies listing.

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Now they need to understand their reporting requirements. There are fundamental or cultural differences, so prepare properly.

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Whether you're in Southeast Asia or you're anywhere else in the world is to be able to build that pathway, customize strategy, and specifically to be able to know that there's a big demand here because of the growth available throughout Southeast Asia, but there are no shortcuts. There's no quick way to get there, so companies throughout Southeast Asia should know there is a market here. This is the most robust capital market in the world.

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Investors are looking for growth opportunities. They wanna tap into and access the growth that's happening in Southeast Asia and look forward to those opportunities for tomorrow's future companies.

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Joseph Lucosky: Can I, can I just add to that? I think that was very well said. I'll say this though with respect to the foreign private issues because when you look at the underlying data, a lot of these foreign deals, even though they make up 71% of the IPO market in 2024 they are coming with bringing a lot of their own capital. There's a concept in the micro cap world called directed orders. We use it all the time.

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The exchanges don't love it. They, you know, this is part of the second deal qualification, but a lot of companies from Asia are coming with their own capital, not all of it, but a lot, but, but they're coming with capital, and the bankers here in the US, I think, have gotten used to companies from Asia coming with their own capital and combining it with capital here from the American markets and putting a deal together.

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So while 71% of all deals are coming from Asia, you may wanna understand and investigate and Peter's a great resource, Rebecca, myself, the bankers that are actually raising the substantial amount of money here in the US for Southeast Asian companies and those that are relying on what we call just directed orders, meaning that companies are bringing their money.

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From Asia to the list here in the US, there's a big difference. You won't find that in the headline. You got to look at the underlying data and the underlying deals because I would say out of that 71%. It might be 50/50. It might even be 60/40 with directed orders. So not every deal is created equal, and you really have to look at the underlying statistics in which banks are raising real dollars and which banks are putting their name on a book and collecting a fee from your money over in Southeast Asia.

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Peter Goldstein: Well said, Joe, and I'll close out with this one.

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You've traveled a long way and uh I'm grateful to all of you coming this far.

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I would break it down into two steps. There's the money that's required to get to the IPO, which Joe was right. It could be as much as 70% or 80% coming in the way it directs orders, but then when you're listed, that all changes. Then you have access to US institutional capital to debt and to equity. So if you break that journey up into two parts.

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The primary benefit is upon listing to be able to access the broadest, most robust capital market in the world.

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Joseph Lucosky: That's, that's, that's the best point you said all day. Thank you for finishing my, uh, my somewhat negative.

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Peter Goldstein: We make a good tag team. Alright, we gotta move on, Rebecca, Joe, thank you so much.