The Teathers App
The Teathers App is a unique mobile app, designed to give all private investors access to placements and Initial Public Offerings (IPOs), predominantly on the London Stock Exchange’s Alternative Investment Market (AIM). There are currently 982 companies listed on AIM. During the course of 2016 these companies raised £3.66 billion in secondary fundraisings (placements) (DATA: AIM Statistics to end Dec. 2016).
The Teathers App is an execution-only platform. When an AIM-listed company raises money, “onboarded” users of the Teathers App have the opportunity to participate in the placement on the same terms as other insiders.
Becoming an onboarded user of the Teathers App
Only onboarded users can participate in deals offered through the Teathers App.
Becoming an onboarded user of the Teathers App is simple. Download the App from the App Store and complete the account application process. By completing the onboarding process, users of the Teathers App set up an execution only brokerage account with Shard Capital.
Shard Capital is the FCA-regulated broker supporting the Teathers App and provides the necessary environment, including compliance oversight and client identification.
The Teathers App is available for free download for iOS smartphone devices from the iTunes App Store (https://itunes.apple.com/gb/app/teathers/id973433084). An Android version of the Teathers App will be released in Google Play in early Q2 2017
A Teathers App account
By opening an account with the Teathers App onboarded users open an execution-only brokerage account with Shard Capital. Features of this account include:
- Ability to participate in placements and IPOs through the Teathers App, with no dealing charges when participating.
- Ability to hold and exercise warrants.
- Ability to buy and sell shares through Direct Market Access. Shard has established,
- Trade outside of normal market size (catering for larger trade sizes).
- Trade outside the spread, potentially offering price improvements
- Standard dealing charges apply (1% on transaction size, £20 minimum)
long-standing relationships with market makers and is able to:
In addition to these features of the Teathers App account, clients are also able to apply to open parallel ISA and SIPP accounts with Shard, and to apply for a Shard advisory account (which gains access to Shard’s advisory deals, charges apply).
- Ability to open ISA and/or SIPP accounts.
- Ability to open a Shard advisory account, granting access to Shard’s advisory deal (dealing charges apply)
Shard Capital is regulated by the FCA.
Participating in a placing or IPO
Participating in a placing or IPO through the Teathers App is straightforward. Once users have completed the onboarding process, they have full access to deals on offer (subject to inside information requirements).
To participate in a deal an onboarded user must have cleared funds in their account. To add funds to your Teathers App account please contact Shard Capital on +44 (0)207 186 9950 or firstname.lastname@example.org.
Once a deal is made available on the Teathers App, the user is greeted with the following screen, which displays deals with inside information and those without inside information.
Being Made Inside
The user then either chooses to go through the process of being made on the inside.
Or in the case of non-inside deals (typically IPOs) they simply open the deal.
The deal description screen contains information about the deal, the company and any supporting documentation accessed via links.
Should an onboarded user wish to place an order he or she presses “invest” and is taken to the dealing page. The onboarded user then decides how much to invest and the sum is deducted from his or her account and credited to the total amount raised.
The Teathers App is an execution only platform.
Fundraising services for companies
Teathers charges companies a flat fee of 5% of gross funds raised through the Teathers App. The Teathers App offers three options to companies who wish to raise money.
2. Live Market Bookbuilds
Setting up deals through the Teathers App is simple. Shard Capital is the broker, which provides the Teathers App with its regulated function. Shard Capital is regulated by the FCA.
Once an agreement is reached to put a deal through the App, Teathers drafts text describing the deal. After an iterative editing process, the fundraising company agrees to the release of this text and Shard’s compliance team confirms it conforms to market regulations. Shard then uploads the text and the deal to the App. The deal is made live at the agreed time. Allow for 4 hours during normal business hours to complete this process.
The Teathers App is set up to offer standard placements to onboarded users. Once a deal has been uploaded to the Teathers App, a push notification is sent out to all users. On logging in, onboarded users can see that a deal is available on the App, but they cannot see the details. To see information about the deal, the onboarded user must first select an option, agreeing to be made on the inside.
Once the onboarded user has agreed to being made on the inside and to adhere to the relevant market rules, they can read about the terms of the deal, the company concerned, and the risk warnings. Links are provided to additional information if necessary. The onboarded user can then decide whether or not to participate in the placement. Onboarded users must have cleared funds in their accounts to be able to invest.
By offering placements through the Teathers App companies can:
- Widen their fund-raising audience
- Increase the amount of funds raised
- Increase chances of placing shares into the hands of longer-term holders. Because the Teathers App is only used by private investors, this increases the chances of putting shares into the hands of genuine long-term holders
- Improve investor relations, through enabling existing shareholders to participate in fundraisings on the same terms
- Strengthen sentiment in the secondary market by including genuine retail investors in the share issue
Live Market Bookbuilds
Live Market Bookbuilds are an innovative service offered by the Teathers App. They are designed to act as a supplementary fundraising service to a primary placement. Live Market Bookbuilds enable companies to raise money from private investors during market hours, through a pre-announced transaction.
Prior to launching a Live Market Bookbuild the company raising money announces to the market, via RNS, that it plans to offer a Live Market Bookbuild through the Teathers App. This announcement contains:
- Details of the maximum number of shares on offer
- Details of the terms of the deal, including price
- Details of any associated financial incentives e.g. warrants
- Timescale for the Live Market Bookbuild, including start and closing dates and time
- Because Live Market Bookbuilds are pre-announced to the market they do not constitute inside information. This makes Live Market Bookbuilds open and transparent.
Companies which offer Live Market Bookbuilds experience all the advantages of offering a placement through the Teathers App, with the following additional benefits:
- A Live Market Bookbuild is a cost-effective alternative to running a Rights Issue or Open Offer
- Because it is transparent and conducted during market hours a Live Market Bookbuild can increase awareness of the company in the wider market
Offering an IPO through the Teathers App is simple and can help raise awareness of a new company coming to market among retail investors. Because IPOs do not involve inside information all onboarded users can see the deal on the Teathers App, without needing to be made on the inside. The Teathers App can provide links to external corporate documents, or directly host them within the App.
Increased awareness of an IPO among retail investors this can have a significant positive effect on the secondary market, once the company makes is debut.
Teathers Financial Plc is an independent company and is free to work with any regulated firm. Teathers is not regulated by the FCA. Teathers’ business model is flexible and its primary goal is to open corporate share issues to retail investors.
The Teathers App gives brokers the opportunity to increase the size of funds raised through a primary placement. If a deal is offered through the Teathers App, Shard Capital issues the placing letter. The Teathers App is can offer both open-ended placements, or give a firm commitment to take a specified amount.
To discuss offering a placement through the Teathers App, please contact us here.
Live Market Bookbuilds
A Live Market Bookbuild can be run immediately after a company has raised money through a primary fundraise. Brokers that offer Live Market Bookbuilds to corporate clients improve the quality of their service. They can increase the size of investment raised and help improve investor relations with existing long-term shareholders, who might have felt “shut out” of the primary placement.
To discuss offering Live Market Bookbuilds to your corporate clients, please contact us here.
White labelling the Teathers App
Although Shard Capital supports the Teathers App by providing its regulated operational function, Teathers is able to offer a white-labelled version of its software and service to other brokers.
For those firms which already have client rosters of retail investors, a separately-branded white label version of the Teathers App can be used to enable them to offer deals directly to their existing client base as opposed to Teathers App clients. The advantages of operating a white-labelled version of the Teathers App include:
- Gaining access to Teathers’ growing network of retail investors
- Benefitting from Teathers’ knowledge of the retail market and its skills in marketing to it
- Enhancing a firm’s reputation by helping make the market “fairer” to private investors, enabling wider access to deals
- Increasing efficiencies of scale, by being able to communicate instantly with a wider base of retail clients
To discuss a possible white-label commercial arrangement, please contact us here.