Dream Exchange is on track to become the first-ever minority-owned stock exchange in the U.S. after Cadiz Capital Holding LLC agreed to become a majority owner in the company.
The idea for the exchange came from founder Joe Cecala's decades of experience working in capital markets, which he said too often ignore the little guy.
"The market hunts for liquidity, and in the smaller market, especially over the last 10 years, we're just devoid of transactions," Cecala told Cheddar. "So I started designing a stock exchange that could really service those small-cap transactions."
He noted that companies in the $50 million range used to make up a much larger segment of the equities market. Dream Exchange aims to give those companies a platform.
Bill Ellison, chairman of Cadiz Capital Holding LLC, said that for too long minority-owned companies have struggled to get access to capital. He also emphasized the need to give these companies a venue to go public if they so choose.
"The owners of a company will make that decision on whether or not they want to go public, but the opportunity should be there," he said.
The timing of the launch amid a national backlash against systemic racism, which has taken aim at everything from policing to public statues, was accidental, Cecala said. But nonetheless, he believes it's an opportune time to make equity markets more inclusive.
"You can see there's a tremendously underserved segment of our society, and I think those economic effects are spilling over into the fact that not everyone has an equal stake in the country," Cecala said.
COVID-19 is leaving its imprint on the new exchange as well. A number of companies that have expressed interest in being listed are producing medical supplies and devices.
"There seems to be a lot of activity surrounding [coronavirus], not just biopharma, but all of the mechanics, the ventilators, the masks," he said.
Clean energy, cybersecurity, and information technology are some other areas where there has been heightened interest, he added.
"We're not licensed yet, but we're accumulating companies for the launch," Cecala said