Dream Exchange, the first majority black-owned stock exchange in America's history, is gearing up for launch amidst a rapid decline in public companies, with smaller and mid-sized IPOs being almost non-existent.
Research in the USA published in 2019 and 2021 which investigated the profiles of founding teams receiving venture capital financing from the most active funds in the U.S., found that VC-backed start-ups were still disproportionately men (89.3%), white (71.6%), based in Silicon Valley (35.3%) and Ivy League-educated (13.7%), with very little change in data in two years.
Dream Exchange is creating a National Market System (NMS) Exchange and plans to operate a Venture Exchange upon passage of the Main Street Growth Act. The Main Street Growth Act allows for the creation and regulation of venture exchanges, a new type of exchange where shares of smaller companies would trade and provide a more liquid investment market for younger companies and retail investors.
The Founder and CEO of Dream Exchange is Joe Cecala, who helped draft The Main Street Growth Act. In the 1990s, Joe was legal counsel for the entity that created Archipelago, the company that created the electronic infrastructure that became the New York Stock Exchange’s NYSE-Arca exchange.
Usually, when a new exchange is being established, David takes on Goliath, with the incumbent or incumbents fighting the new entrant with every tool available to them, as happened in Europe when a new entrant like Tradepoint challenged the mighty London Stock Exchange. So, it happened in the USA when Archipelago, Instinet, and others challenged the established order of NYSE and Nasdaq, and in Australia, where Instinet challenged the ASX.
Dream Exchange's relationship with other USA exchanges is expected to be symbiotic rather than one of the incumbents fighting the new entrant tooth and nail.
Microsoft first offered its stock to the public in 1986 via Nasdaq. It was just a $61 million IPO (Initial Public Offering). Richard Grasso, NYSE's then president, and chief operating officer, famously said, “I think Bill Gates (then Microsoft chairman) is doing his shareholders a disservice by staying in the over-the-counter market (Nasdaq).” Microsoft is still listed on Nasdaq, however, hundreds of companies that are currently the same size as Microsoft was in 1986 are not able to list on a stock exchange.
Assisting Dream Exchange’s go-to-market strategy is the current fastest-growing stock exchange in the United States, Members Exchange (MEMX). The two companies signed an agreement where MEMX will provide services and exchange technology to Dream Exchange in December last year.
Dr Martin Luther King's vision for social justice was multi-faceted and included economic equality, not just civil rights. Dream Exchange’s mission is to make Marin Luther King’s dream a reality.
Joe has brought together a leadership team at Dream Exchange, including entrepreneurs from FinTech, regulation, and global exchanges. The team includes Bruce Trask, Chief Technology Officer, Ray Edwards, Chief Exchange Architect, Tellis Williams, Chief Information Security Officer, and Jigar Vyas, Head of Global Marketing and Product. [Bios can be found here].
The Dream Exchange will cater to a market currently underserved by mainstream exchanges. Dream Exchange plans to be a feeder exchange where companies starting on the Venture Exchange segment of Dream Exchange move on at a larger stage to one of the mega exchanges. However, the reality might be quite different.