Can The New LTSE Stock Exchange Help Black Founders Go Public?

CBx Vibe:Stocks & Bonds” Indigo Egl

By CultureBanx Team

  • The Long-Term Stock Exchange (LTSE) has started trading in the U.S.
  • From 2009 to 2017, Black women only raised $289M of venture capital funding

The country’s 14th national equity exchange Long-Term Stock Exchange (LTSE) has started trading in the U.S., in a bid to offer companies and investors with a longer-term focus an alternative to traditional securities exchanges. Since black women are the nation’s fastest growing demographic of startup founders, an exchange for startups like LTSE should be music to their ears, but tone death Silicon Valley may impede upon this. Can the LTSE provide an opportunity to help get their companies publicly traded?

Why This Matters: In theory, it’s a great time for a new exchange. Equity volumes are about 50% higher than last year thanks to the pandemic, Federal Reserve and congress. The new exchange, which discourages quarterly reporting and requires firms to consider all stakeholders. It’s also being driven by a desire to hit different market niches, like long-term investors and this could mean big success for Black founders looking to IPO.

The LTSE is being driven by a desire to hit different market niches, like long-term investors and this could mean big success for Black founders looking to IPO

For decades at the nexus of money and power in Silicon Valley, Black female founders have been underestimated and overlooked. Research shows that Black women are among the least likely to get checks cut by venture capitalists, which is typically the starting point along the road to most IPOs. So few raise venture money that the percentage is, statistically speaking, nearly zero. From 2009 to 2017, Black women only raised $289 million, or 0.0006% of the total $424.7 billion of venture capital raised, ProjectDiane found.

The LTSE may be able to provide a new path to the publicly traded markets for these founders that’s less reliant on Silicon Valley’s input. However, competition is steep in this space and LTSE is diving into the deep end, because of the 13 other national exchanges, 12 are owned by just 3 companies. The NYSE (New York Stock Exchange) has 23.3%, the Nasdaq has 19.5%, and the Cboe (Chicago Board of Exchange) has 18.4% of the equity trading market, according to the Tabb Group.

What’s Next: There may be even more opportunities for Black founders to try their hand in the IPO market because the LTSE isn’t the only exchange coming online. The Members Exchange, MEMX, will begin a phased launch on September 21, and the MIAX Pearl Equities, operated by Miami International Holdings, which runs three options exchanges, will debut its equities exchange on September 25.

CBx Vibe:Stocks & Bonds” Indigo Egl

CONTRIBUTOR

CultureBanx Team

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