Technology serving issuers
In recent months we have observed new and innovative techniques for companies to raise capital. STOs, direct listings (now authorized for primary issuances) and SPACs are the starkest illustrations. These transactions all share one thing in common: a closer interaction between the issuer and its investors. This phenomenon has accelerated in recent months in a post COVID-19 world and has led to the development and greater use of virtual roadshows in capital markets.
At Praexo, we believe in the true merits of companies being able to run and manage direct communications with investors. The development of new technology now meansthat such interactions can easily be handled directly by company's executives. Thanks to the Praexo solutions, companies can now access the most relevant global investors or manage their entire capital raising process without losing focus on daily operations.
Since the genesis of our company, we have kept this firmly in mind and have designed and built our solutions so that companies can regain ownership in their capital raising process.
With or without a financial advisor, any management utilising Praexo’s software will be empowered to prepare and execute the most successful capital raise that produces the best results for their stakeholders.
Promoting Intelligence Augmentation over Artificial Intelligence
Despite the many successes of Artificial Intelligence platforms in beating top ranked human players at chess or strategy board games such as Go, the limitations of AI are laid bare when it comes to engaging in less defined tasks. At Praexo, we embed data at the heart of business decisions. We chose to use Intelligence Augmentation over Artificial Intelligence in order to push data-driven recommendations to our clients.
In practice, what this means is that we firstly use modern data science techniques to, for instance, identify relevant investors. We also select specific KPIs and themes in order to better position a company's profile before pitching this to investors. These indicators and themes are reviewed by our team of senior investment bankers, who provide input based on their extensive capital markets experience.
This augmented advisory provides transparency to our clients and limits the biases of solutions that may have been either purely provided by humans or through algorithms.
Preparing companies for their next round of financing
As a company develops and goes through several capital raising rounds, the pool of capital providers tends to evolve as do their expectations, with investors expecting more detailed and frequent communications. In particular, there is a growing interest in accessing pre-public equity from crossover investors. Our experience is that some crossover investors feel that private companies often lack the basic skills and understanding of how to shape their narratives and communicate effectively with non-VC investors.
As capital market specialists who have worked on numerous private and public capital market transactions, we strongly believe that companies and their management have a unique opportunity to gain valuable insight through precisely understanding the expectations of institutional investors.
Our solution has been moulded to build a successful path along a company’s capital raising journey. As Praexo provides more in-depth financial reports and sponsored equity research, the company moves closer to the disclosure and transparency requirements of a listed market, while investors gain more insight into their equity investments. By being more exacting on investor feedback, the issuer is able to have a much better and clearer view of investors’ expectations and considerations regarding the equity story and key performance metrics.
Achieving premium valuations is often one of the most critical goals sought by successful companies. Nevertheless, it has been proven many times, especially in recent history, that sustaining these valuations in public markets is by far more challenging. Building constructive and informed dialogue with institutional investors builds future investor confidence, which can positively impact valuation.