1 One who finds the bankers, or moneyed men to finance; that is, furnish, through their clients or otherwise, the necessary capital to organize and set in motion a corporation or industry; the "middleman" as it were, between the corporation needing the capital, and those whose business it is to place the corporation's securities upon the market; in other words, sell them to their clients.
1 A bill introduced in the New York Legislature defined a " promoter " as being every person, by whatever name, who brings together the persons to become interested in the enterprise, aids in securing subscriptions, and sets in motion machinery which leads to the promotion of a corporation.
The " promoter " does not attempt to sell securities directly to the investor, but rather wholesales them to those who do, such as bankers, etc.
Perhaps no better illustration of the work performed by a "promoter " can be given than that of E. S. Meade in his "Trust Finance " as follows: "The promoter performs an indispensable function in the community by discovering, formulating, and assembling the business propositions by whose development the wealth of society is increased. He acts as the middleman or intermediary between the man with money to invest in securities and the man with undeveloped property to sell for money. In the present scheme of production, the resource and the money are useless apart. Let them be brought together, and wealth is the result."
A "promoter" is one who often makes it his occupation to hunt up corporations which desire to issue securities, and bring such securities to the attention of some banker, and, in case of the issue being found satisfactory and accepted by the latter, the "promoter" receives a commission or fee for his services. It may almost be said that he is a manufacturer of stocks and bonds. A "promoter" must not be confused with a banker, although the latter may, at times, be a " promoter," for he may occasionally originate the idea, for instance, of building a new railroad, and carry through all the details of its coming into existence; create the securities and wholesale them in part or entire among other bankers. In such a case, he is a "promoter" of that particular enterprise.1
The honest and enterprising "promoter" has been one of the most useful agents in the development of this great country.
Promoter's Shares (or Stock). An English term but little used in America; stock issued with limited privileges in payment for services rendered by those instrumental in organizing or financing a corporation.