Soleil Securities raises an additional $11.0 million

Last week Soleil Securities raised $11 million from Bain Capital Ventures. So far these guys have raised close to $25 million. That is a lot of money to burn for a company that is essentially a new kind of "sell-side" firm. I am sure that they have a great business model to attract VC's like Bain and Bessemer. But what bothers me is the message. Read how they describe themselves.

"Soleil Securities Corporation, a member of NASD and SIPC, provides institutional investors value-added equity research produced by a network of independent research analysts and boutiques. It provides efficient trading services through which asset managers direct brokerage business as payment for research. It shares the commissions with its research partners."

How is Soleil different than other sell-side firms? Is Soleil a research firm? Where is the scalability in their model? I am not sure if I have the answers. Traditional sell-side firms employ their own analysts thus giving rise to conflicts of interest. Soleil does not "directly" employ any analysts. They get research from independent providers in the their network and pass it to the buy-side. Buy-side pays Soleil by giving them brokerage business. In my opinion Soleil is more of a brokerage firm who also provide research. And the coverage is not very large - 350 companies. But hey, it looks like they are doing well and market likes their offering. 600 customers - only metric that matters in the end.

Soleil's success (based on what they say. I have no other sources to verify their revenues/profits) gives me a lot of confidence. I think finEye's offering will be received well by the buy-side, who are hungry for good research. We have our story straight - Unbiased research, cover 5000 companies, exhaustive research insights in real-time, analysis of everything that is reported by a company (including all the footnotes, MD&A). I can't wait to get our product in the hands of a few customers to see their response. Exciting times ahead!!