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The NASDAQ Capital Market: Competing At A Whole New Level

Mar 17, 2016 | General

“What’s worth doing is worth doing for money”- Gordon Gekko, “Wall Street”

On Tuesday we explored the idea of listing your small business on a public exchange or marketplace.  Everyone has different reasons for wanting to go public. It could be to raise fresh capital, broaden the company’s exposure, or, if you are the owner, it could be a strategic move to merge or your strategy to exit the business.

Depending on your intentions, the NASDAQ Capital Market (NASDAQ) may be the best place to publicly list your small business.NASDAQ

NASDAQ is the second-largest exchange in the world in terms of market capitalization and trading volume. It includes publicly traded companies such as, Inc., Apple, Inc., Google Inc. (Class A & C), and many other high-profile corporations.

In order to go public on NASDAQ your company will need to satisfy NASDAQ’s Two Step authorization process. The First Step is satisfying the financial requirements, and the Second Step is conforming to the corporate governance standards. Though the process may sound intense and exhausting, just remember Mr. Gekko’s infamous words above.

The First Step provides Three (3) financial standards a company may comply with to meet the initial NASDAQ listing requirements in accordance with NASDAQ Rules 5505(a) and 5505(b)(1)-(3). The standards include:

  • The Equity Standard
  • The Market Value of Listed Securities Standard
  • The Net Income Standard

The Three (3) financial requirements filter out companies that are not financially stable from being listed on NASDAQ. There are Three (3) common elements in the Three (3) financial requirements:

  • The company has at least One Million (1,000,000) publicly held shares
    • Shares that count toward this million cannot be held directly or indirectly by officers, directors, or any person who is the beneficial owner of more than Ten (10%) Percent of the total shares outstanding.
  • The company has at least Three Hundred (300) round lot shareholders
    • Each lot must be able to divide evenly by Hundred (100) shares.
    • A round is the smallest order that can be placed through the exchange.
  • The company has at least Three (3) market makers which are members registered as NASDAQ Market Makers for purposes of participation in trading on a fully automated basis.

The Second Step in getting your company listed on NASDAQ is complying with NASDAQ’s corporate governance requirements, which are:

  • The company’s board of directors is required to have a majority of independent directors.
  • The company is required to have an audit committee consisting solely of independent directors who satisfy the requirements of SEC Rule 10A-3, and who can read and understand fundamental financial statements.
  • The company is required to have a compensation committee consisting solely of independent directors and at least Two (2) members.
  • The company must adopt a code of conduct applicable to all directors, officers, and employees.
  • The company is required to hold an annual meeting of shareholders no later than one year after the end of its fiscal year.


NASDAQ’s mission is to create assurance that companies listed on the exchange are providing valid and non-fraudulent information to the public. These corporate governance requirements help with this mission by requiring companies to be transparent, thus reducing the possibility of fraud.

However, the process of getting listed on the NASDAQ can be tricky and difficult to even the most skillful business professional. That is why at Brinen & Associates, LLC we take the extra step and help guide companies to the goal they always dreamed of accomplishing.

Next week we’ll explore the possibilities involved with the NYSE MKT and Over-The-Counter Markets.


Forming Your Company

Financing Your Company

Operating Your Company

Growing Your Company

Defending Your Company


Transactional and Corporate Law

Mergers and Acquisitions


I formerly worked as a satellite employee from my home state of New Jersey. I ended my employment with my former employer in 2016. In 2018, I was sued by my former employer for $1.1 million in Illinois State Court. I was referred to Brinen & Associates, LLC by a friend who is a client of the firm. Brinen & Associates, LLC came highly recommended. I contacted Joshua Brinen and then had a consultation at his office with his colleague Mark White. Together, Messrs. Brinen and White explained my options...

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