It is not uncommon in any business for the participants to exaggerate their capabilities, embellish their strengths and make claims as to their potential.  This is certainly true for a number of promoters and their affiliate companies, particularly for those new to the business, and eager for both clients and investors.  All However are not created equally.  Some promoters have been in the business for many years.  They have dealt with millions of investors about hundreds of public companies, and can offer real performance.  Thousands of small, publicly traded companies also have great products and ideas, and can offer true potential.  The question is, how do you know where to put your money?!

Let’s take a closer look at the promotion business.  The truth is, stock promoters are a “necessary evil.”  Small, micro, and especially emerging companies with real products or new ideas need help to survive until they become profitable enough to stand on their own.  Stock Promoters provide such companies the assistance they need without depleting their financial resources.  Usually, promoters arrange to be paid in stock, directly or indirectly, by the companies they promote.  Because cash is what an infant company needs most, this arrangement allows them to save money on what would be an expansive marketing campaign aimed at the investing public.  Indeed, the reason a company goes public in the first place is to raise working capital.   

The promoter, using all avenues available to him, makes it his job to tell the company’s story; the product, the history, the idea, the plan, the people, and the potential to as many people possible to reach.  And of course, of the millions of ears they connect with, a percentage of those will become interested enough to learn more, or run right out and buy a shares in the client company.  As the promoter does his job, and investors become interested, the company’s stock sees a natural rise in volume, and quite possibly price The company can use this opportunity to liquidate some stock, raise some cash, and broaden it’s shareholder base at the same time.  Speaking simply, that’s the whole idea!  

And because of the arrangement, it would seem that all parties involved have a vested interest in making the deal work properly.  The promoter, who was paid in stock is happy to see it become a more valued currency, the company increases its financial resources, and investors are now in on the ground floor of a new company, with hope that the product or service is successfull.  So what’s the problem?  Why are promoters a “necessary evil”, and not viewed as legitimately as the big banks?

Back in 1995, there were 3 “Real” Stock Promoters.  Three different companies with three different marketing ideas and three different campaigns.  Not only were they very selective about whom they would accept as clients, but they made sure companies got their money’s worth, and kept the investors informed of all company activities.  Today, however, there are thousands of Stock Promoters who are anything but selective about the companies they represent. These stock Promoters accept any amount of money or stock as payment, because their main interest is not to help the company, but rather to turn that stock into cash as quickly as possible and move on.  On top of that, there are even more companies interested in selling their stock for cash, for selfish reasons rather than for capital growth.

How can all this be changed?  How can Stock Promoters get back to being selective about the companies that retain them?  How can companies determine the “Real” quality of a potential  Promoter?  How can investors learn who to listen to with confidence?