Understanding and Assessing Small Cap Boards

Posted on October 3, 2021 by Scott Shuda

This is a new video put out by the Small Cap Institute. The two guys most associated with this organization are its founder, David Scher, and Adam Epstein. I’ve known both these guys for a while, David from the LD Micro Conference and Adam from a common background in Silicon Valley.

In the video, David begins with the observation that we have all experienced problems with small cap governance. He explains that most of the time this is due to companies not being attuned to the nuances of capital markets from the perspective of the buy side. Often, they don’t appreciate that the ideas presented by the sell side (investment bankers), “your float is too small, you should do a financing targeting institutions (our bank’s clients)” are often not shared by the buy side, “why in the world would the company raise cash it does not need at a 20% discount to the prevailing price???”

Small Cap Institute was created to address this growing pain for small companies. Good governance drives better corporate performance. And the smaller the company, the more important is the practice of good governance.

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