Finding Capital in ‘Dark Pools’ and Angel Investors

Posted by admin on March 3rd, 2011 at 08:43am

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This is the VOA Special English Economics Report.

Big stock exchanges in the United States are linked in what is known as the national market system plan. The idea is to process deals and report the best available prices to the public as quickly as possible.

But there are other ways of investing that operate outside the national market system.

In the late nineteen nineties, the Securities and Exchange Commission wanted to make room for new ideas in financial trading. The commission developed new rules for exchanges and for what are known as alternative trading systems.

Alternative trading systems are operated by brokers or dealers. They mainly serve big investors like retirement funds, universities and financial companies.

These systems trade the same public stocks as other market players do. But they do not publicly report their trades. This secrecy explains why they also have another name: “dark pools.”

As of October, there were eighty-six alternative trading systems registered with the Securities and Exchange Commission.

A buy or sell order for a large amount of stock can move markets. It can influence other investors to try to buy or sell shares of that same stock. Supporters of alternative trading systems say the secrecy reduces the risk of a disorderly market.

But the International Monetary Fund has concerns about alternative trading systems. It says they limit the ability of the investing public to price a security effectively. Also, the IMF says the activity of these trading systems is largely outside the reach of market regulators.

Another alternative to the investing methods that most people know is the work of so-called angel investors. These are individuals who invest in new projects — and not just Internet startups that hope to become the next Google or Facebook. They could also be small, local businesses.

Steve Moore made a lot of money in the software business. After he retired he made an interest-free loan to Crystie and Keith Kisler. The couple operate a small organic farm in Washington state. They could not get a bank loan to build their business.

CRYSTIE KISLER: “This notion of an angel investor seemed just that to us. It seemed miraculous.”

In return, Mr. Moore received a minority share of their business.

STEVE MOORE: “I started thinking about where else can I get some kind of reasonable rate of return where return can actually be defined more fully than just how much money did I make.”

The Center for Venture Research at the University of New Hampshire says angel investing fell more than six percent nationwide in the first half of last year. Still, angel investments during that period totaled eight and a half billion dollars.

And that’s the VOA Special English Economics Report. I’m Steve Ember.

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Contributing: Tom Banse and Mario Ritter

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11 Comments

  • 1. ndt27  |  March 3rd, 2011 at 5:41 pm

    although i do not understand fully this writing but i think what it says is rather interesting. An angel investor can help other people and earns money for him as well. My knowledge in this field is not very much but i understand a bit that it is a good way to invest your money. The stock exchange in Vietnam hasn’t developed very much but i hope in a near future the Vietnamese can try this new way of investment.

  • 2. tttt  |  March 4th, 2011 at 1:26 pm

    The knowledge of stock exchange of investment that is realy confusing for me.
    But there are many of people have participated to invest in this field, almost they didn’t obtain any result, even suffered loss in this investing.
    I wish I got a little vocation on this field, I would attend playing on it.
    Sadly, I only know having a little capital then send it into the bank for saving while the value of money is more and more lost.

  • 3. meo  |  March 4th, 2011 at 5:01 pm

    nowadays, a lot of people invest their money in the stock market. Some of them do not have the knowledge of stocks or shares but they still join this market because they want to be rich quickly.The other devote their time to learn and study market so they can get success.

  • 4. dang ngoc  |  March 4th, 2011 at 6:26 pm

    I think this market had in Viet Nam.

  • 5. xuyen  |  March 5th, 2011 at 8:03 pm

    today ,i am studying about jobs and recruitment .i want to discuss this topic with everyone.you think:a good salary is the best way to get people interested in their jobs?

  • 6. xuyen  |  March 5th, 2011 at 8:17 pm

    i am studying about stock in university and i think it is very difficultly .no one can understand about it.so when everyone want to invest their money in the market ,everyone should learn about it more than.and as for me , if everyone want to be rich quickly ,that have many way ,the examples ,people can trade , can open a company …if everyone like to invest stock ,they need to research stock market

  • 7. xuyen  |  March 5th, 2011 at 8:20 pm

    can you say clear more than?
    this market is stock market .yes it have in viet nam and it have developed lately,

  • 8. Quiteriver  |  March 12th, 2011 at 9:12 am

    Stock investment is major for people who minded adventure.Get much money but also much hapless. if as we haven’t much knowlegde about this we should be carefull of investement .we can be lost all money and migh be deep in debt.Keep your money in your hand.bye bye

  • 9. huong thi pham  |  March 15th, 2011 at 2:55 pm

    I haven’t much knowledge about the stock market and I have much money to invest in this field. But I think that if we have free money, we should invest it in real estate.It will be much more advantageous and more stable than invest in the stock market.

  • 10. hung  |  April 4th, 2011 at 5:49 pm

    Good evening!
    In the future, i hope there are many companies of Vietnam become the new Facebook or the new Google.
    Good bye!
    Have a nice night!,

  • 11. English James  |  December 16th, 2011 at 11:04 pm

    Learning English is not difficult as long as you practice consistently.


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