- October 24, 2018
- Posted by: Jeff Hudson
- Category: Capital Markets
Since the time of the buttonwood tree, capital has been focused on helping dreams and ideas flourish. The goal of capital markets is to distribute capital to where it was needed. Over time, the capital markets and regulations have locked out smaller companies, so for the last 85 years these companies primarily have loans as an option for capital.
At Halagard, we believe it is time to reimagine the capital markets and reestablish an environment in which smaller companies can use capital markets and equity to fuel growth, innovation, creation, and success. What if there were a way for SMBs to use equity for capital and comply with all of the current regulations? We took on this challenge and created a solution our lawyers immediately asked us to patent.
How we did it. First the regulatory hurdle, public markets are highly regulated, so we are building a private market, removing major regulatory costs. Next, the middlemen hurdle, we removed the middle men and their various layers of cost by creating a vertical offering that includes all of the key services in a public IPO marketplace within a single company. The outcome is a cost-effective way for SMBs to use equity for capital.
How important are SMBs? 6 out of 10 private sector employees work for a global SMB. The success of modern democracies rests on the ability for people to work and enjoy the fruits of that work. If SMBs are hindered from growing or receiving access to capital, the outcome will be far greater than just suboptimal capital allocation.
In the US alone, the SMB market commands 8 trillion dollars of force; that is roughly 40+% of overall US GDP. Globally, the numbers are 40 trillion dollars and 50% of GDP — yet helping these industries thrive and grow has been problematic. Why?
If 10% of SMBs were able to achieve a 10% lift in sales because of lower cost capital, the economic impact globally would be astounding.
Our value propositions. The financial systems that support SMBs are stuck in a rut of old thinking and old processes. The traditional solution offered to SMBs in need of capital is a Loan. The problem with a loan is that it significantly restricts cash flow. Money that is spent servicing a loan isn’t being used to increase marketing, create new products, or hire more employees.
The cornerstone of Halagard is that we can increase cash flow for an SMB by at least 20 times. With our solution, SMBs get the capital they need to maintain their cash flow. Imagine the SMBs with the capital they need for a major project plus their cash flow isn’t servicing a loan. They have just strapped a two-stage rocket to their growth vehicle.
It’s very simple: investors love owning companies that are properly fueled for growth. We have created the fuel.