Junior Capital Pool (JCP)
A junior capital pool (JCP) is a corporate structure that allows a company to issue its shares or stock options to the public before going into an actual business. JCP also refers to a company that engages in such an act. When a company goes public (issues stock options) before having an operational business structure, a junior capital pool exists.
JCP as a corporate practice is peculiar to Canada, it was first invented in Alberta, Canada and it only exists on Toronto’s TSX Venture Exchange. The goal of a JCP is to provide a capital structure through which start-ups or emerging companies can easily raise funds for business operations.
A Little More on What is a Junior Capital Pool (JCP)
A junior capital pool (JCP) is a form of corporate financing that started in Canada, it was first invented in the oil and gas industry. It serves as a alternative way startups can raise money to go public. Undergoing a JCP requires that an emerging firm or a startup gets a minimum of $100,000 as investment from founders and then issues its shares to the public in order to gain additional funds to start its business operation.
A junior capital pool has a structure that allows the founders of a company to fund it with a minimum of $100,000 before such a company is listed on the stock exchange (Canadain exchange). This corporate structure allows young startups that are yet to have a line of business operation to go public. JCPs have a lot of risks given that the companies have to means of income yet. The first JCP was invented in Alberta and was listed on the Alberta Stock Exchange.
References for “Junior Capital Pool – JCP”