Rialto Markets, a broker-dealer active in the crowdfunding sector, is raising growth capital under Reg CF. Rialto has selected NetCapital, a funding portal, to complete this funding round.
According to the offering page, Rialto is seeking up to $4,999,999 of Series A-2 Units. The company is raising capital at a pre-money valuation of $54.98 million. There is a minimum investment level of $115 and a per-share unit price of $28.75. Launched this week, Rialto has raised over$43,00 with an offering that is expected to close by April.
In a release, Rialto co-founder and CEO Shari Noonan, said they have gone through a rigorous process with the SEC and FINRA to create its secondary trading platform (ATS):
“But we built ours to enable high-growth private companies to thrive and potentially stay private for longer. They can achieve this by crowdfunding up to $75 million a year using Reg A+ to accelerate their expansion and, latterly, have the flexibility to potentially trade some of their shares through our regulated secondary market ATS. This aims to enable cashing out all or part of their investment earlier as they would with a publicly listed company, whether the value has significantly accelerated, decelerated, or stayed broadly the same.”
Noonan said that four years ago her team left the security of Wall Street to start their innovative infrastructure.
“This has allowed us to become a ‘go-to’ fully regulated broker-dealer – registered in all 50 states – empowering private companies to raise money far more easily and quickly, through our expertise in crowdfunding and institutional investment,” said Rialto. “We are also using the blockchain-driven secondary market to digitise and potentially create friction-less trading of shares in private companies, which is attracting small private investors.”
The release claims that Rialto has “signed a pipeline of contracts worth a further $716 million” for its securities offering platform. Rialto is entering a market that already has established leaders but they believe their technology makes them unique.
Rialto generates its revenue through success fees paid by an issuer when an offering funds. Regarding its Secondary Market, Rialto earns a one-time setup fee as well as recurring annual maintenance fee paid by issuers to be onboarded to the ATS. Additionally, they earn fees from commissions paid by investors trading on their secondary market. Rialto’s White Label product earns revenue from licensing fees paid by market participants for use of the ATS and commissions paid by investors who participate through market participants.
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