It is fitting that one of Tain Capital’s few press releases was issued on April Fools’ Day.
It would be foolish indeed to trust your investment dollars, or your startup, to a company that appears to exist only online.
Tain Capital bills itself as a boutique private equity firm, but its only asset appears to be a slick website that boasts of the company’s “comprehensive track record of investing with emerging high-performing companies.”
But if it has any track record, it conceals it well. Unlike most private equity or venture capital firms, it lists no investment portfolio, funds or funding partners.
It doesn’t even appear to have an office.
Tain’s website lists its corporate address as the 16th floor of Park Place, 666 Burrard Street, but that entire floor is occupied by the Vancouver law office of Stikeman Elliott. Stikeman Elliott confirmed that Tain Capital is not a client.
Several calls placed to the number listed on Tain Capital’s website went unanswered, and messages were not returned.
A press release issued over 1888PressRelease under the name of Brian Davis lists a phone number with a Washington state area code that turns out to be an invalid number.
In February, the BC Securities Commission (BCSC) issued a brief investor caution bulletin stating that Tain Capital is not registered to trade or advise in securities in B.C. and has not filed a prospectus or an exempt distribution report. Nor is it registered as a business in B.C., according to BC Registry Services.
Venture capitalists (VCs) don’t necessarily have to be registered to trade in securities, provided they’re investing only their own money, said BCSC director of enforcement Peter Brady.
But if they plan to raise money from the public and invest it, they need to be registered as a dealer or adviser or both. Tain Capital claims that 32% of its investments are “in-house,” meaning the balance would have to come from outside investors.
If a company plans to raise outside money for a venture capital fund and invest that money, it needs to file a prospectus, unless it plans to use a special exemption, such as the accredited investor exemption, in which case it needs to file an exempt distribution report.
“Generally speaking, if you are going out to the public and you are raising funds from the public, you’re going to have to have done one of those two things,” Brady said. “And if you haven’t done it, you have at least violated our reporting requirements.”
He added that anyone considering investing through a private equity firm should check to see if the firm is registered, which they can do at aretheyregistered.ca. None of the principals named with Tain Capital are registered.
If the company’s alleged CEO, Martin Reynolds, co-founders Bill Goldstein and Cory Austen, and partners Doug Moran and Robert Eddison have the kind of investment experience and success that the firm’s website boasts, they have been successful at keeping it quiet.
If Tain Capital’s partners and management team exist, they appear to have no online presence – no LinkedIn profiles and no press coverage.
A number of VCs in Vancouver say they have never heard of Tain Capital.
One of the few online references to Tain Capital outside of its website appears to be an August 2015 press release, in which the company stated its senior analyst, Jamie Devine, would be attending the Banff Venture Forum in September 2015.
The forum’s executive director confirmed that there is no record of Devine or anyone from Tain Capital having registered for the conference.
On April 1, the company issued a press release that summarizes economic news coming out of the U.S., without offering any unique insights. It ends with a plug for Tain Capital as “a boutique private equity firm with global reach.”
In the absence of any real press coverage, whoever is behind Tain Capital appears to be trying to create an online profile by issuing news releases – even ones that are devoid of any real news. In other words, it could be someone with no real profile trying to create the semblance of one by issuing commentary on economic trends.
Anyone approached to make an investment through a private equity firm should ask to see financial statements, Brady said.
“Sometimes the company won’t even give them to you,” he said. “Well, how can you even evaluate how the company’s doing? Do they have enough cash to last even for the rest of the financial year?”
