SEC Forms: How To Be a Wealth Detective in Prospect Research

Guest Post by Angie Stapleton, Helen Brown Group

For any prospect researcher or fundraiser, SEC documents often provide the clearest picture into the financial standing of a prospect who is an executive, director, or major shareholder of a public company. SEC forms often hold the answers to questions around a prospect’s wealth events, liquidity, and – perhaps most importantly – ability to make a gift to your organization. 

Is your prospect about to walk through a major financial event, such as selling or taking a company public? Do they work for a major hedge fund and you want to estimate their annual income? Do you know they are a company shareholder but have questions about liquidity and want to time a gift to a stock sale? Likely, the answer you are looking for is in a required SEC filing. 

The most beloved SEC form in any researcher’s toolbelt is, of course, the DEF 14A, or the “definitive proxy statement.” This would rightfully be followed by a firm’s annual and quarterly reports (10K and 10Q, respectively). However, lately, I’m spending a lot more time and finding a lot of love for a few other SEC forms that offer more targeted, up-to-date information. These are a few of my favorites:   

The Form 8K

A public company is required to file a Form 8K, also known as “current reports,” within four days of any major event affecting its shareholders. These events include things like mergers and acquisitions, major financial or stock changes, and changes in company leadership. 

Form 8Ks are useful for a number of reasons, but they are my “go-to” source for information on company acquisitions. Depending on the detail of the filer, the acquiring firm will often report on the financial agreement between the companies, overall market projections, their anticipated financial benefit following the acquisition, and any advisors or outside firms working on the deal. This form generally goes into far more detail than the press release (which is usually included – bonus!). 

The Form S-1 

The S-1 is filed by a company when it intends to go public. However, the company files the S-1 when it is still private, giving researchers the first glimpse into the company’s inner-workings. The filing contains information on the company’s business operations, details on the impending sale, and stock information for prominent shareholders, including their current holdings and the holdings they intend to sell. It will also note if they have taken out any loans against their shares indicating liquidity in advance of the float. 

The amended versions of the S-1 come in the S-1/A, most often because the company is changing the share-offering price or quantity to be issued. However, it may also note if a shareholder changes the intended amount of shares they will personally offer – important to know if it is your prospect as it could have significant financial implications!  

The Form ADV 

The Form ADV is filed annually by investment advisors managing in excess of $25 million and is often the only source for business information for ultra-secretive hedge funds or private equity firms. 

The ADV is divided into two sections:  The first is a fill-in-the-blank format that will include valuable information, such as assets under management, fee arrangements, client descriptions, affiliated funds, and the percentage of ownership stake for direct owners and executive officers. The second section is comprised of the brochures investment advisers give to their clients, which will offer insight into how and to what type of client the firm is marketing itself. 

In addition to the ADV, a researcher can search investment advisor firms and employees registered with the SEC on the agency’s Investment Adviser Public Disclosure website. The site has individual summaries on a registered individual’s professional background which will include current registrations, employment history, and disclosures about disciplinary events. These can be especially helpful if other public information on your prospect is limited – for example, if they are not yet a top executive at a firm and are not receiving press coverage.  

The Form 4 

The Form 4  is filed when any insider who holds 10% or more of the company’s outstanding stock acquires or divests shares. The form offers the most reliable picture of a prospect’s holdings in a company at any given time and also provides further insight into information that can be found in the DEF 14A, such as if a prospect has actually exercised stock options

For more information on the Form 4 – as well as its counterparts, Forms 3 and 5 – be sure to bookmark this fantastic iWave blog post that goes into further detail on each of the Insider filings as well as using stock information to calculate wealth capacity. 

How do I find these forms? I’m so glad you asked!

One of the nicest things about public companies is just that – information about them is very public! As of 2002, public companies are required to maintain these filings on their websites; however, they may also provide a link to the SEC EDGAR Database. If redirected, simply type the company name into the search box to pull up past filings. If you are searching for a specific individual or prospect, type their name into the “Company Name” search box (last name first name – no comma). Then, when presented with results, click on “Insider Transactions” which will bring up a list of the filings in which your prospect has been mentioned. 

Additionally, this information is available via several fee-based wealth screening companies. For example, iWave  maintains a robust database of Insider filings – Forms 3, 4, and 5 – for individual shareholders within their database. Be sure to check out this handy guide on Insider forms from the iWave Support Center for more information. 

Good luck, and happy reading!

About the author: Angie Stapleton is an Assistant Director of Research with The Helen Brown Group. She has worked in development since 2002, partnering with a wide range of nonprofit institutions in development research, grant writing, and front-line fundraising. She began her professional career at Vanderbilt University in research and prospect development. Angie holds an MPA in nonprofit management from Indiana University and a BS in journalism from Middle Tennessee State University. She resides in Nashville, Tenn., and is a member and past president of APRA MidSouth.



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