Private Capital Markets: Expert Insights from KoreSummit
Once considered a niche sector, private capital markets have now become a thriving source of growth and opportunity. This expansion has been driven by regulatory changes, technological innovation, and greater access to investment opportunities.
In this special KoreSummit session, our industry experts Peter Daneyko (Chief Revenue Officer of Kore), Dr. Kiran Garimella (Chief Scientist & CTO at Kore), and Oscar A. Jofre (co-Founder, CEO of Kore) offered their unique perspectives on the evolving dynamics and future prospects of private capital markets.
The Evolution of Private Capital Markets
Historically, private capital markets were dominated by accredited investors, venture capitalists, and institutional players. However, the JOBS Act of 2012 marked a pivotal shift, opening the doors for a broader range of investors to participate in private company investments. Regulations such as Regulation Crowdfunding (Reg CF), Regulation A+ (Reg A+), and 506(c) have allowed companies to raise significant capital from the general public.
As highlighted at KoreSummit, the U.S. private markets are substantially larger than the public markets, raising $4.45 trillion in 2023 alone compared to $2.1 trillion in the public markets. The introduction and expansion of these regulations present an untapped and ever-expanding opportunity for companies to raise capital. This environment not only helps fuel the exponential growth of private capital markets but also offers companies new avenues to secure financing, benefiting both companies and investors alike.
The Role of Technology and Trust in Private Capital Market Growth
During the session, speakers emphasized the transformative role of technology in shaping the future of private capital markets. The COVID-19 pandemic accelerated the adoption of online capital raising, transforming how investors and companies connect. As Oscar Jofre noted, the pandemic catalyzed a behavioral shift, making online investing the preferred method for private investors. This digital transformation, however, underscores the importance of building trust in an online environment.
A robust and compliant infrastructure is crucial to support these activities. The experts discussed the significance of validated data, trusted participants, and comprehensive compliance mechanisms. The use of blockchain technology, as implemented by KoreChain, has been instrumental in ensuring the security, transparency, and immutability of transactions in private markets.
Fostering Collaboration and Integrity
The session further emphasized the need to foster a collaborative environment among all participants in the private capital market. From investors and companies to service providers and regulators, each plays a vital role in ensuring the integrity and success of capital-raising efforts.
Another key message was the critical need for the ecosystem to uphold the highest standards of compliance and data validation. This commitment to transparency and accountability is essential for building and maintaining trust among all stakeholders.
Building a Trusted Ecosystem
The private capital markets ecosystem is complex, involving multiple participants such as broker-dealers, transfer agents, legal experts, auditors, and payment processors. At KoreSummit, experts highlighted the importance of collaboration among these participants to ensure the integrity and success of capital-raising efforts. The ecosystem must adhere to the highest standards of compliance and data validation to build and maintain trust among all stakeholders.
For instance, Kore’s infrastructure is designed to support this ecosystem by offering validated data, ensuring all participants operate in full compliance with SEC and , and providing comprehensive tracking and management of all attestations required for regulatory compliance. This approach not only fosters trust but also enhances the efficiency and scalability of private capital market operations.
The Future of Private Capital Markets
Looking ahead, the future of private capital markets is full of potential. The foundation laid by the JOBS Act, coupled with the ongoing adoption of innovative technologies like AI and blockchain, is expected to drive continued expansion. These advancements are streamlining processes, enhancing security, and attracting more participants to the market, making private investments more accessible to a broader audience.
As global regulations evolve, the potential for private capital markets to expand beyond the United States offers even greater opportunities for growth. Kore, with its cutting-edge infrastructure and commitment to compliance, is well-positioned to become the backbone of this dynamic market, supporting its continued development and ensuring it remains a trusted space for all participants.
Pioneering the Next Phase of Growth
The insights shared at the KoreSummit underscore the transformative power of technology, regulation, and collaboration in the private capital markets. As this market continues to evolve, the demand for secure, reliable, and compliant solutions will only grow, driven by innovations in digital securities, the increased adoption of blockchain technology, and the expanding reach of regulatory frameworks like the JOBS Act.
With a team of seasoned experts and cutting-edge solutions, Kore is at the forefront of driving the next phase of growth in the private capital markets. Our ability to deliver secure and compliant platforms empowers businesses to scale and attract investment from both traditional and digital channels. In doing so, Kore is helping shape the future of private capital markets, making them more accessible, efficient, and inclusive for all participants.
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