Adam Torres and Mark Deters discuss the Microcap Conference.
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Show Notes:
Listen to the Microcap Conference coverage. In this episode, Adam Torres interviews Mark Deters, Partner at Withum, explore Withum and the Microcap Conference.
About Withum
Withum is a forward-thinking, technology-driven advisory and accounting firm, helping clients to Be in a Position of Strength in today’s modern business landscape.
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Full Unedited Transcript
Hey, I’d like to welcome you to another episode of Mission Matters. My name is Adam Torres, and if you’d like to apply to be a guest in the show, just head on over to missionmatters. com and click on Be Our Guest to apply. All right, so today I am in Atlantic City, New Jersey, and I’m at the MicroCap Conference, and let me tell you, my first time attending this conference in person, and it has been a ball.
Great keynote, great speakers, a lot of meetings taking place here. A lot of publicly traded company, but a lot. And my guest today is one of the sponsors of the conference, Mark. So Mark, Hey, I’m glad I could snag you and get you away from your booth and your table for a minute to do this. So thank you for coming on.
Yeah, absolutely. Thanks for having me on. So Mark, have you been to one of these micro cap conferences before? Yeah. So this is our second year sponsoring the conference. We sponsored it last year. They, they ran it at Caesars. Yeah. I think it was the inaugural conference for the microcap and then this is year two of it.
So we’re actually involved with deal flow and other events as well. And when they added the microcap conference, we just decided to continue our relationship with them and also sponsor this one. Yeah. So what do you think may, I mean, I go to a lot of conferences. What do you think makes this one so special?
I think honestly, the venue is a lot better this year. I really think it’s just about networking. I mean, everyone, all the firms that sponsor come to obviously brand their firm or their company, their bank. But I think for me personally, it’s a networking event. It’s getting out there, meet, do seeing all the people that you don’t regularly see, but you work with.
And in today’s world, it’s zoom calls or team calls. And it’s really nice to get in front of people live. And really just get a better feel for people’s personalities versus through a computer screen. Agreed. I mean, I don’t know if you made it to the launch party yesterday, but I did. I was like, come on now, this is what we get together, right?
Yeah, it was great. I enjoyed the launch party, just seeing different people I haven’t seen in a while. Amazing. So let’s talk a little bit about your firm. Tell us a little bit more about what you do. So Witham is a full audit, tax, and advisory firm. I personally am an audit partner. But we also do full tax services.
We do advisory, do cyber security. We do a lot of different services, fair value assistance. We have valuation groups. We do litigation support. So we do a variety of things. Between audit tax and advisory. So new, new presidency, a lot of things going on, a lot of, especially in this crowd, talk about what’s going on in the micro cap space.
So what, what’s on your radar? What, what are you, what are you looking at? What is your firm looking at? I think we’re looking at, well, we’re hoping a little bit of deregulation. I think we talked about it on the panel earlier this morning. I think the new administration and the changeover at the SEC is going to help a little bit with that.
I think it’s going to take a while to trickle to the accounting function versus, you know, directly into the market capital markets. I think when the new administration, when the previous administration came into power, we needed more regulation and somebody referred to the space as the wild, wild west. I think it was a little too loose, but.
It went a little too far when the administration changed over in 2021. I think now we’re hoping over time, you know, they’ll back off a little bit, open up the capital markets a little bit. I mean, you’re not seeing regular way IPOs. The SPAC IPO died with the new administration. So I think we’re going to see a, I would hope a market pick up and.
Hopefully we’re here to support it and help everyone get where they need to go. Yeah. Speaking from, from your firm standpoint and you’re thinking about these micro cap companies, like, like how are you working with them? Like what type of companies are getting, how do they get the most value out of working with your team?
We’re very specialized, I would say by industry verticals. So the majority of our clients in this space. Are either in the life science, biotech, or technology space. So those are really where we focus a lot of our time. There’s other spaces, there’s, you know, you have oil and gas and all the other different industries.
But I would say from a microcap perspective, that’s where we really spend most of our time. And most of the companies we’re working with, we’re the audit team usually. So we’re doing. The, the PCOB audit that needs to go into their public filing, whether they’re trying to IPO or whether they’re already public and they’re doing their regular registrant filings, Qs.
Any other trends you’re following right now in the market in relation to that? Yeah. So I think, and I mentioned it on our panel, a lot of firms, we’re a mid market firm, right? You have your big four plus two, you have. The KPMGs, the PWCs, the big ones, and then you have BDO, you have Grant Thornton, we’re in that middle level.
And a lot of the firms in that level are leaving the space. They don’t want to be in the microcap. They don’t really want to be in the public space because of all the regulation. You’re having a lot, I think that the cutoff from the regulatory side is a hundred registrants. So if you audit more than a hundred public companies.
You’re due for inspection by the PCOB every year. Mm. When you go under a hundred, it’s every three years. Yeah. And the lens that they’re looking at you is not nearly as strict. Mm-hmm . So I think firms in that mid market, so if you get to that 101, then you’re on the radar. You’re on the radar. Yeah. And you’re every year And, and the cost to do those inspections is a lot internally for a firm.
Yeah. The risk profile changes for your firm. So I think firms have pushed to get under a hundred. So they’re not in that world anymore. And we’re seeing a lot of companies that need new auditors just because the auditor doesn’t want, they don’t want to be over a hundred. So they’re shedding clients. So the micro cap, like the micro cap client would probably be the one first cut, right?
Cause that’s going to be the smaller. Correct. Yeah. And that’s where we’re seeing a lot of the opportunities come across our desk. Maybe with the, the change in regulation, you may see companies change their mind. I’m not overly sure. I think the other thing that’s driving that’s private equity. I don’t know if you see in the, in the news, you probably don’t follow accounting news, but.
Private equity firms are buying accounting firms and they don’t want that risk either. So that’s part of the equation of why they’re getting under a hundred because they don’t want the private equity group doesn’t want that risk profile. Well, Mark, I know you got a lot to do here. I snagged you in the middle of the conference.
Last thing I want you to do is look into the camera and tell everyone how they, if they want to learn more, how they can follow up and how they can connect with your team. Sure. If you want to learn more about with them, you can just go right onto our website with them. It links everything from there.
We have all of our advisory partners, all of our contacts. We have over 200 partners, so you can go right on there. All the industries are laid out with them. com fantastic. And for everybody that’s watching, just so you know, we’ll definitely put the links in the show notes, so you can just click on the link and head right on over.
And speaking of the audience, if this is your first time with mission matters and you haven’t done it yet, hit. That subscribe or follow button. This is a daily show each and every day. We’re bringing you new content, new ideas, and hopefully new inspiration to help you along the way on your journey as well.
So again, hit that subscribe or follow button and Mark, man, appreciate you making some time for us. Thank you. Appreciate your time.