To take a business idea to the next level one of the greatest obstacles companies often face is a lack of money. But last week in Boulder, Colo., a qualitative mutual fund launched one of the first public markets for small investors.
Previously, federal law has prevented small companies to accept small investments, unless it was from a qualified investor. But since the Crowdfunding bill passed the house this past December, which was a part of the JOBS Act, small companies are now allowed to accept investments up to $10,000 from individuals as well as go public and sell up to $2 million in equity online.
Based on the entrepreneurial ecosystem of Boulder, and the passing of the bill, Story Stock Exchange is one of the first qualitative mutual funds to launch a public market for small investors. Their approach is designed to work in agreement with today's Internet-based crowd funding platforms--such as FundingLaunchpad.com and Kickstarter.com.
SSX is a Limited Liability Corporation operated in a joint partnership between investment capital firm Tiforp Business Ventures and market firm Metzger Associates. They position themselves in promising new ideas to create a portfolio of listed projects that are too small for venture capital or bank financing, but with potential for average investors and job generation. In exchange for services, they offer funding and equity opportunities for its partners and shareholders.
"Small businesses have been shunned by banks, limited in soliciting outside investment and prohibited from participating in the greatest economic engine ever invented: public equities markets driven by small, independent investors," John Metzger, the SSX Co-Founder, told Business Wire. " Our mission is to turn promising business ideas--the best stories-- into fundable enterprises attractive to both 'accredited' and unaccredited individuals and organizations."
In exchange for future equity participation in its portfolio projects, the SSX team provide custom programs and service combinations which may include seed funding, business and capital informant, management and sales counsel, investor relations and digital marketing services. The incubation process will lead to the development of an equity pool of story stocks, or the expected future potential of the company.
"From web applications to manufactured goods, from consumer products to retail, SSX is setting a next standard in startup businesses incubation, while creating a market for the venture-class investments in the future," Michael Abdy, another SSX Co-Founder, told Business Wire. "We're building a sophisticated network of mentors, advisors and investors dedicated to discovering the rising stars on today's new playing field."
[Via Business Wire at Market Watch]