Mooers Branton

Mooers Branton & Company provides an excellent opportunity for lucrative venture capital-like gains on its successes, however, we operate in an aggressive industry and we strive to simultaneously minimize risks through our disciplined business model as well as by virtue of the diversification that is achieved through our specific, proprietary merchant banking structure. Leading with our own capital, generally at the riskiest stage, necessitates that we diligently evaluate the soundness of each and every investment. What is a Merchant Bank? Better known in parts of the world outside the United States, a merchant bank is an entity that helps companies grow and prosper by providing the capital needed to reach their full potential. Unlike investment banks, the most critical attribute of a merchant bank is to lead the investment with the bank's own money at the riskiest stage and then seek additional capital to further growth once risks have been managed. This is the process adopted by Mooers Branton & Company. This contrasts significantly with various models in the retail-oriented, commission-based investment banking industry where incentives are all too frequently not in the right place due to factors such as Other Peoples' Money. Another characteristic of traditional merchant banking is a more intimate relationship between the bank and the companies it supports. Mooers Branton & Company understands that its expertise is financial, not operational, but it maintains close relationships with management in order to ensure that assets are protected and growth is stimulated. For that reason, it is careful to maintain a manageable number of companies in its portfolio. The focus of a merchant bank is developing healthy companies that ultimately result in a significant return on investment. Profits for the bank and its investor-partners generally occur when portfolio companies are acquired or offered for public investment. We are not: Venture Capitalists: Generally, venture capitalists invest in early stage, high-risk businesses, often based upon unproven products at the "conceptual" stage and having "blue sky" potential (i.e., a good story but unproven, often requiring substantial funds to validate the business - or not). Their targeted investments usually do not incorporate less risky products or services that will hedge their potential downside losses. Philosophically, they tend to accept that a majority of their investments will not realize the "blue sky" projections and will consequently fail or provide less than acceptable rates of return. Venture capitalists generally hope that 20%-40% of their investments succeed at such high levels that satisfactory returns are achieved for the portfolio as a whole.