How a tiny investment bank landed a role on one of the biggest tech deals of all time

Snap Inc, the parent company of Snapchat, is hoping to raise about $US3 billion in its initial public offering.

The offering is being compared to the likes of other big tech IPOs such as Alibaba, Facebook, and Twitter. And it could be one of the biggest in 2017.

The list of underwriters for the initial public offering includes a number of prominent Wall Street firms including Morgan Stanley, Goldman Sachs, and JPMorgan. There’s also a few lesser known firms on the list.

One such firm is the Newport Beach, California-based Mischler Financial Group. The boutique investment bank was founded in 1994 and is owned and operated by disabled veterans.

Business Insider spoke with the head of equity sales and trading at Mischler, Ryan P. Morgan, to get the story behind their role in the deal.

“We were involved as an underwriter in the Alibaba IPO in 2014,” Morgan said. “There were some execs at other investment banks involved in Alibaba who joined the team at Snap who recommended us for the upcoming initial public offering.”

Morgan declined to the name the executives in question, but Snap’s chief strategy officer, Imran Khan, is a former Credit Suisse banker who worked on the IPO of Alibaba before joining the social media company.

“They knew that we were well buttoned up,” Morgan said.

Morgan said that his firm’s value proposition is in their distribution. He said Mischler plays a complimentary role to the “balance sheet banks,” mainly because they are well-positioned to serve underserved middle markets.

“These investors are extremely loyal to our firm and act in partnership with us,” he said. “They are the middle market accounts, the accounts that don’t fall under the radar of a larger bank.”

In addition to Mischler’s involvement in the Alibaba IPO, which was the largest in history, the firm has also worked on 500 to 600 debt capital market transactions, according to Morgan. The bank also does a lot of Fortune 500 company share repurchases.

They have come a long way since their humble beginnings.

“We started by just doing business in the secondary markets. So like equity, fixed income, etcetera,” Morgan said.

He said this was the way they conducted business for years.

“But then in 2009, when a lot of companies went into receivership, we got our first leap into equity capital markets in Citigroup’s IPO,” he said.

Citigroup pulled off a $US17 billion common stock offering and sold $US3.5 billion in tangible equity units in late 2009 as part of its agreement to repay the $US20 billion the US government held in TARP trust preferred securities following the depths of the financial crisis.

Morgan said the Department of the Treasury’s push for diversity played a role in their selection for the Citigroup IPO. And since then he said their hard work and altruistic mission to serve veterans has made them an attractive partner.

“We are big on giving back to our respective constituents. We do that by giving back monetarily to organisations like Wounded Warriors,” he said.”And also by training and mentoring disabled veterans.”

NOW WATCH: KPMG’s US CEO Lynne Doughtie shares one major tip to get promoted at work

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.