Q&A with Midtown Partners
CEO John Clarke
Who are Midtown Partners’ typical banking clients?
Typical banking clients are emerging growth companies with less than a $300 million valuation, both public and private. Our clients are what the industry likes to call the undiscovered gems or fallen angels.
Generally we focus on private placements and best efforts underwriting. Transactions range from straight debt to convertible debt, preferred, common, and warrant offerings.
Each situation is different as we try to align the companies situation with current market terms.
What differentiates your firm from other boutique banks?
Three things: experience, creativity, and persistence.
I've been in the in the industry since the mid-80s. Other senior members have worked in the business starting in the 70s and 90s. So, we've seen all facets of the capital markets and can provide that experience to serve our clients.
Decades of experience has taught us to understand that sometimes the companies that seem like the obvious winners may not always pan out. And sometimes, the ones that come in that you don't think really have a chance, may be big winners a few years down the road.
This exposure that we've had over the last 30 years can be invaluable in making sure that we're identifying companies that we think have the characteristics of a future winner.
And we emphasize to all investors that they need to diversify with a portfolio theory strategy. You need to have a portfolio of emerging growth companies because when they win, they can win big. But individually, the odds of successfully picking a single issuer is harder then it may seem.
Where is Midtown Partners located? Why is the location important for Midtown Partners’ clients?
As our name suggests, we're located in midtown Manhattan. New York City is the financial hub of the world, giving us proximity to a very concentrated financial area of institutional and accredited investor professionals.
What type of transactions are led and administered by the Midtown Partners team?
Our typical offerings are private placements and best efforts underwritings. It could be a convertible debt facility or it could be a convertible preferred stock or a common stock and warrant offering. We try to match and compare our clients' situations with market terms for that type of capital.
Why is Midtown Partners a good fit for emerging growth companies?
It is our experience. This is all we’ve done. Most of the team has really spent the bulk of their career focused on working with the underdogs, for lack of a better term. We know about the marketplace because we’ve seen a lot of companies win and lose over the years. It’s our experience that we can bring to these companies that is a big benefit in addition to knowing current market trends and conditions.
Tell me a little about Midtown’s history?
The firm was founded in 2004. From 2005 to 2009, our first five years, we were in the top five most active placement agents for PIPE (Private Investment in Public Equity) transactions each of those years.
Notably, we focused on the smaller emerging companies than our bigger industry peers.
Since then, we've diversified our platform. We have added equity research and now have an advisory team that is able to handle our clients’ needs beyond simply raising capital.
Discuss some memorable recent transactions closed by Midtown?
Recently we had a client come in. It was a small listed public company in the staffing industry.
They worked with other firms, but nobody was able to get the capital that they needed.
We looked at this outside of the box and we were able to introduce them to a very wealthy professional in the same industry that had both a personal interest as well as professional interest in the company beyond the funding.
In this instance, we were able to come up with a solution to not only get them the capital but to get a long-term investor that is focused on helping to grow the business.
What is Strategic Consulting?
Strategic consulting is a service that we provide our clients to advice them on gaining additional exposure to the institutional and investment professional marketplace.
We introduce them directly to institutional and accredited investors. We host conference calls and events where they can interface with investors that may have an interest in owning a piece of their company.
How can Midtown Partners help deliver a client’s message to the Street?
First, we assist to make sure that the issuer’s message is optimized. In reality, the attention span of most Wall Street professionals is very short.
The company's message has to be concise, crystal clear and tells exactly what they do and what the value proposition is in owning that company's stock.
Second, are they targeting the right investor audience. Too many companies go with the general approach and they just assume that everybody can buy their stock.
Without a concise message and marketing to a qualified target, it is difficult to get the results you want to achieve and can get frustrating.
Who are the ideal customers for Strategic Consulting?
Companies that have good fundamentals and an exciting risk-reward proposition are good candidates for our strategic consulting program.
Whether it is messaging the company, assisting with the roadshow, working on an earnings call … our team understands the tasks needed to perform as an effectient public company. We have handled every facet of what these companies need to do.
If a company is working with an investor relations firm or someone doing IR internally, how can you help?
Our team can work with existing vendors or corporate staff to maximize an issuer’s effectiveness. In many cases, they do not have enough time and enough capacity and need to expand their efforts with experienced brokers to assist in interfacing with The Street.
What type of services does Corporate Access provide to assist companies with targeting prospective investors?
The first thing, we’re going to focus on is introducing the company to the right investors … the people that are qualified to potentially have an interest in becoming shareholders.
Why can equity research be important for emerging growth companies?
Equity research can be valuable for companies for two reasons.
First, it is a way for the marketplace to have a third-party analyze the company and explain their story. The research report is an effective way for investors to do the homework better … Research reports can offer an understanding of the industry landscape and a look at the financial metrics to understand the risk-reward scenario the company can offer.
Quality research reports also bring credibility to the company. A lot of institutional and accredited investors look at companies without current research coverage and may form an opinion that may be too early if no firms are covering them.
About John Clarke
Prior to joining Midtown, Mr. Clarke was President and Managing Director of Investment Banking for H.C. Wainwright & Co. During Mr. Clarke’s tenure at Wainwright, the firm became the 3rd and 4th leading U.S. placement agent in number of closed PIPE transactions for the years 2004 and 2005 respectively (source Placementtracker.com). From early 2004, Mr. Clarke served as both the General Securities Principal and the Financial Operations Principal for the firm as well.
Prior to H.C.Wainwright, Mr. Clarke held the position of producing Branch Manager for several NYSE member firms. Since entering the securities industry in 1984, Mr. Clarke has worked with over 100 public companies and assisted in raising in excess of $500 Million in directly placed private capital. In addition, Mr. Clarke has advised private companies in going public via IPO’s and reverse merger process.
Mr. Clarke holds a bachelor’s degree in Finance from the E. Claiborne Robbins School of Finance at the University of Richmond.