AIM Market (London)
I recently attended a talk today about AIM, from a CEO who had gone through the process of listing there. It was very educational, here are some of the insights:
Basic Understanding
- To list on AIM you need to hire a banker in the UK
- The banker calls fund managers to sell your stock to them
- only funds, not inidividuals can buy or sell stock on AIM
- there is no “exchange” to match buyer to seller, if a fund wants to sell the stock in your company they contact your banker who has to find another buyer
- Thus once you are listed you have to retain a banker permanently (yearly fee)
Subtleties
- Bankers dont underwrite the offering, the cost of the roadshow etc is borne by the company without guarantee of listing (can be close to 1M)
- You can list without any revenue, but need to give clear guidance of milestones and then stick to them
- The CEO/Management team has to constantly sell to fund managers as it is incumbent on the company thru the banker to find a new buyer if existing shareholder wants to sell (or the share price can drop)
- US fund managers can’t buy or sell funds on the AIM market
- Funds which buy your stock dont have any representation on the board
It is an interesting vehicle to raise money for a private company, but it has its own nuances.
Add comment June 9th, 2007
