The bank JPMorgan Chase & Co. (JPM.NYSE) is launching a platform that will help connect startup founders with venture capital investors. The goal is to make it easier for startups to raise money.
Capital Connect is a new platform that aims to meet the early-stage financing needs of startups. It is part of the biggest U.S. bank by assets’ plan to grow in the private market and build a brand in Silicon Valley that is friendly to founders.
Michael Elanjian, Head of Digital Investment Banking and Digital Private Markets at JPMorgan, is in charge of the team which has grown from three people to over 125 in just two years.
On Capital Connect, startup founders can ask for introductions to investors, build virtual data rooms, and possibly trade their company shares on a secondary market. They can start raising money through the website as early as the Series A round.
In the past few years, venture capital-backed companies have grown in size, which has put banks in a race to meet the founders’ and investors’ needs for funding. This has forced banks to start building relationships early.
Goldman Sachs Group Inc (GS.N:NYSE), Silicon Valley Bank – SVB Capital, and fintech startups like Carta Founders have expanded into venture capital-backed private corporations. The platform will harness JPMorgan’s universal bank platform.
Capital Connect might serve as the jumping-off point for the digitalization of further services, such as the investment banking business, which produces billions of dollars in fees from high-ticket IPOs and M&A deals.