Greg Ingram, Capital Markets Gateway CEO and Co-Founder, joined Yahoo Finance Live to discuss how his company is helping IPOs go digital.

Video Transcript

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ADAM SHAPIRO: Welcome back to "Yahoo Finance Live." I want to point something out to you. You see that old Bell Telephone I got in the corner over there? That's a Western Electric 302. It's a workhorse of the 20th century, and that thing still works. It's kind of like the IPO market. Are you ready for this? They still do a lot of it by paper and by telephone. But not so fast. Greg Ingram, Capital Markets Gateway CEO and co-founder is joining us now. With bringing the digital world, it seems like we are decades late, to the IPO market, but that's essentially what you're doing. Why are we playing catch-up?

GREG INGRAM: It's a great question, Adam, great to be with you this afternoon. I've been actually involved in the capital markets for decades. I started back in '83. And to be honest with you, not a lot has changed with regard to how capital is raised. And you could argue perhaps things have gotten more complicated, because back in the old days, there were usually one underwriter involved in a transaction with many, many more participating, but one in charge. And now routinely we have three, four, five, even sometimes more than that.

So to communicate between banks and underwriters and literally hundreds or thousands of investors manually via telephone or email is incredibly inefficient. So my partners and I decided a few years ago that the time might be right. We had a couple of things in our favor, not least of which was the transition to the cloud. And also, our firm has nearly 100 years worth of sell side underwriter capital markets experience. Not all of that my 100 years, I might add. I bring part of that, but we bring a lot of experience. And that domain expertise is really critical in terms of being able to create a digital platform connecting and working collaboratively with the constituents.

SEANA SMITH: And Greg, of course, the big question now is whether or not these big IPO players, whether or not they are willing to change. What's the reception been like so far in the street?

GREG INGRAM: It's really been fantastic, Seana. You know, quite often we get, when we introduce ourselves, to whether it's a new underwriter or an investor, quite often people just shake their heads and said, what's taken so long. And it's really a combination of things. Our neutrality is critically important. Our partners, our strategic partners are two of the critical constituents. The investment banks, the underwriters, as well as the investors.

I would suggest that probably any one underwriter could do what we're doing, but again, this is a community or a collaborative process. There's usually many underwriters involved and literally hundreds of thousands of investors. So that makes it really complicated. So it's our domain expertise when combined with the neutrality of our platform, the fact that we're working for the system, for the process overall, not one particular constituent that has led to the enthusiastic response that we've received to date.

ADAM SHAPIRO: For those of us who've not actually taken part in an IPO on either side, where will we see the efficiencies of what you're bringing to the table? Is it going to be for those who are actually coming to market to raise capital? Or is it going to be for those who are trying to get an accurate price on the IPO itself?

GREG INGRAM: It's all of that. And I just do want to step back for a moment and say that the platform will be for all public offerings. IPOs are certainly an exciting newsworthy event, but in any given year there's usually many, many times the amount of what we call follow-on offerings. These are fundraises for companies that are already listed and traded in the public markets.

And what's uniquely challenging about those, is the time frame to market is usually substantially compressed, meaning an IPO gets launched, they usually do a roadshow. In today's world, that's typically digital. In the old days, remember, we used to literally travel around the country, if not the globe meeting with investors individually. So you had a week or 10 days typically to build the order book, price the deal, allocate.

The real differentiator is on the block trades and the follow-on transactions, which will be announced at the close of the market at 4 o'clock in New York. And they'll be done by 6 o'clock. So all of a sudden the entire process is compressed into several hours. And when you think about it, we've had over 2,000 trades, new issues, IPOs, follow-on, blocks, SPACs, you name it, so far this year. Many of our strategic partners on the buy side and the underwriters, if it wasn't for Capital Markets Gateway, we don't know if we could have survived the volume.

SEANA SMITH: Hey, Greg, you mentioned the record year for IPOs. Just digging into that a little bit, from your perspective, you've been around the street, like you said, for many years. How does this compare to what you've seen in prior years? And I guess what do you expect heading into the end of the year?

GREG INGRAM: Yeah, it's a great question. I have been around for a long time, but we've not seen volumes like this. And the other big difference is, as you all know, the level of maturity of the companies we're seeing come to market are substantially different than that what we saw in the '80s and the '90s. I remember Adobe went public in 1986 and raised $6 million. I mean, that was the amount of the proceeds raised at the IPO.

Now as you go down the list of the companies that have gone public here in the last year or two and the ones that are in the queue to go public before the end of the year or early next, companies are staying private longer. We've talked about that quite a bit. And these are much larger cap companies coming to market. So it's really exciting. In terms of the overall, I'm not a procrastinator, a research analyst and can necessarily suggest what the market can do here before the end of the year, but certainly all systems are go.

But one thing I would highlight is the new issue market is really important to watch in terms of the overall health of the market. Because it's just human nature, quite frankly, and human emotions that when folks start to get a little concerned about the overall market and their specific portfolio, they tend to become a bit more cautious as it relates to participating in new IPOs. They're focused on what they're earning, not necessarily wanting to take a bet on something new. So it's always a an interesting barometer and forecast to watch the new issue market closely in terms of the overall performance and how that can sometimes predict a turn in the overall market.

ADAM SHAPIRO: And as we thank you, Greg, we should point out once again that this is backed by Fidelity and Goldman, the Capital Markets Gateway, and we appreciate your being here. Greg Ingram is CEO and co-founder of Capital Markets Gateway, what we've been calling CMG.