Main Street Exchange: A One-Stop Shop for Online Securities FinancingChris Schwalbach · January 20, 2017 · 4 min
Building a company isn’t easy. There’s financing to worry about. Customers and products. Team-building. Uncertainty.
When Main Street Exchange’s Brendon Sullivan – a serial entrepreneur – set out to build a company, he had the same observations. “The finance process was so incredibly hard to understand when I was building my company,” he says, “and I had a lot of energy, but more and more I realized that I had to focus on the finance process too much. I never wanted any company to ever have to deal with that process like I did again.”
Main Street Exchange was born by Sullivan and the rest of the team “living what they do”, in other words, offering a product or service aimed at improving the struggles they themselves had been through. Take Kyle White, MSE’s Director of Operations. As a Senior Corporate Paralegal, Kyle was shocked by the amount of time spent by – and money paid to – law firms to close securities financing transactions. Kyle shared her thoughts with Main Street CEO and co-founder Carlos Cruz-Abrams, then a partner at KKO (Kendall, Koenig & Oelsner), and they agreed both that the system was broken and that it could be “fixed” through automation.
Together, the co-founders, including Anthony Surace, MSE’s CTO, tapped into their areas of expertise and created Main Street Exchange, an automated, digital platform for online private company securities financing. MSE saves entrepreneurs tons of time – largely (but not only)— in the managing of fundraising rounds, primarily by guiding companies through all aspects of any kind of securities issuance, all of which can be signed and closed on the Main Street platform itself. Additionally, investor records and cap tables are managed and updated automatically — with all relevant files made available through the Main Street database.
Need to share one of these docs with a team member, investor, or other collaborator? No problem. Main Street Exchange grants entrepreneurs and business owners the capability of storing, sharing, and signing these documents online – internally, amongst a team, and externally with potential investors and actual shareholders.
You’re probably seeing the beauty now. Haven’t we all gotten frustrated, thrown our hands in the air, and asked the heavens “why can’t this all live in one place?” That’s exactly what Main Street Exchange exists to do; communicate with investors, share documents, sign and counter-sign, track payments, keep records, and ensure legal compliance all in a one-stop-shop cloud solution.
Legal compliance—specifically the ease with which it is ensured—is one of MSE’s greatest sells. Billed as the first automated regulatory compliance engine for private company financings, MSE helps companies navigate the financing phase legally, in addition to efficiently and cost-effectively. While Main Street Exchange does not draft your legal documents (stock purchase agreements, etc.), their engine knows when a company’s securities filings are due and provides every necessary detail, including all available exemptions and write-offs. These filings are auto-generated, and company representatives (including attorneys and paralegals) are able to edit and modify as needed.
On the other side of things, investors utilizing MSE are provided with breakdowns of company details and investment opportunities – including information on key people and cap tables. Investors and company representatives can communicate through the Main Street Exchange platform, a huge benefit for any business person looking to consolidate all financing activity from communication to filings in a single place. Furthermore, each investor in a company has access to all of his, her, or its records through the system, so the company does not have to spend any additional time or money on a go-forward basis providing copies of historical documents. Companies can also automate their monthly, quarterly, or annual reports, so that they are reminded when those are due and send them (and store them securely) to investors through the platform.
MSE’s value doesn’t end there. The company has a fantastic knowledge base aimed at providing startups, entrepreneurs, and investors with the basic information they need to get off the ground. Not sure if your company should be an LLC or Corporation? Navigate over to the Formation section of MSE’s knowledge base and find out. Topics range from general (“The Importance of Securities Compliance”, “What is a Convertible Note?”) to more granular (“What is a Central Index Key, and how do I get one?”). MSE plans on expanding the knowledge base to include podcasts and short informational videos.
Main Street Exchange seeks to solve a common problem in business, that is, the massive time-suck and pain financing rounds can be, and the generally dispersed process required for success. Main Street Exchange consolidates all of that, making it a valuable product, service, and time-saver for business people across all industries.
By Sean Conte
AVL Growth Partners, 2017