Case 1-1 E-Centives, Inc.—Raising Capital in Switzerland
Case 1-1 E-Centives, Inc.—Raising Capital in Switzerland
1. Possible factors (from Exhibit 1-7) relevant in e-centives decision to raise capital and list on the Swiss Exchange s New Market: a. Ease of raising capital (point 3). The Swiss Exchange s New Market has simple listing requirements designed to appeal to small companies. The contrast with the complex, detailed listing and reporting requirements in the United States is striking. b. Availability of capital (point 4). Switzerland has a large, well-developed capital market. c. Reputation of the exchange (point 5). The Swiss Exchange is well known for providing a high quality, efficient trading environment. d. Corporate profile and brand identity (point 6). A listing on the New Market would dovetail with the company’s possible expansion into Switzerland by giving it a higher profile in the Swiss market. Although e-centives is interested in expanding into Switzerland, it also is considering Germany and the United Kingdom, which have much larger consumer markets. Therefore, this is not an overwhelming point in Switzerland’s favor. e. Regulatory environment (point 7). It is highly likely that e-centives chose Switzerland because its regulatory environment is unlike that of the United States. f. Availability of investors (point 9). e-centives might be interested in possible investment from large Swiss pension funds, but it s not likely that such funds would invest in a speculative, start-up enterprise.
2. Possible reasons why e-centives chose not to raise public equity in the United States: a. One possible reason would be to avoid the complex and expensive process of registering securities with the U.S. Securities and Exchange Commission and keeping up with the Commission’s periodic reporting requirements. b. e-centives probably would not satisfy the listing requirements of a U.S. stock exchange (such as Nasdaq or a
1. Possible factors (from Exhibit 1-7) relevant in e-centives decision to raise capital and list on the Swiss Exchange s New Market: a. Ease of raising capital (point 3). The Swiss Exchange s New Market has simple listing requirements designed to appeal to small companies. The contrast with the complex, detailed listing and reporting requirements in the United States is striking. b. Availability of capital (point 4). Switzerland has a large, well-developed capital market. c. Reputation of the exchange (point 5). The Swiss Exchange is well known for providing a high quality, efficient trading environment. d. Corporate profile and brand identity (point 6). A listing on the New Market would dovetail with the company’s possible expansion into Switzerland by giving it a higher profile in the Swiss market. Although e-centives is interested in expanding into Switzerland, it also is considering Germany and the United Kingdom, which have much larger consumer markets. Therefore, this is not an overwhelming point in Switzerland’s favor. e. Regulatory environment (point 7). It is highly likely that e-centives chose Switzerland because its regulatory environment is unlike that of the United States. f. Availability of investors (point 9). e-centives might be interested in possible investment from large Swiss pension funds, but it s not likely that such funds would invest in a speculative, start-up enterprise.
2. Possible reasons why e-centives chose not to raise public equity in the United States: a. One possible reason would be to avoid the complex and expensive process of registering securities with the U.S. Securities and Exchange Commission and keeping up with the Commission’s periodic reporting requirements. b. e-centives probably would not satisfy the listing requirements of a U.S. stock exchange (such as Nasdaq or a