The Internet provides companies direct access to a huge pool of investors and prospective investors. The Internet enables a company to distribute its offering materials to the broadest possible audience and to solicit interest in its securities without regard to location. This has proved a boon for new businesses without an established investor base as well as for established corporations seeking to leverage their name recognition on a global basis. Technology has also encouraged issuers to consider and develop new ways to present information to prospective investors. We are starting to see many creative uses of the Internet to tell a company's story.
Electronic prospectuses can, and do, include video, sound, graphics and interactivity.
The use of electronic media to disseminate offering materials has some obvious economic advantages. Electronic offering materials can also be supplemented and updated more efficiently and economically. These savings have significantly reduced the cost of capital, particularly for smaller businesses where such costs take a significant chunk out of the total offering proceeds. These techniques streamline the offering process, reducing underwriting expenses and increasing offering proceeds. In the case of direct public offerings, underwriting expenses are dispensed with entirely.