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Fortune favours the bold: Listing on AIM during so-called worst year for business

Business Agent
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Time Out defied the doom and gloom heralds and went on to raise net proceeds of £59m after listing on AIM in June 2016. It hasn’t stopped Bruno from claimingthe IPO journey had been a rollercoaster. Even if economic conditions don’t get in the way, there’s plenty to contend with.

“It’s a huge team effort to complete the process, from filing out the right paperwork to managing the investor roadshow,” he said. “You need to be prepared to sell your plans to dozens of investors. Understanding what motivates each one is not easy and you need to listen and be prepared for rejection.”

But if you believe in your idea, then the message will be well received even if they decide not to invest at that time, Bruno advised. He shared further pearls of wisdom with Real Business: “It is important to keep the doors open, and post-flotation, keep ?banging the drum” of what your company is accomplishing and how you are delivering against your original plans.

“In my experience, what investors are usually more worried about is execution. They ask themselves: “Can this team deliver what they promise Do I trust them . Once you IPO you are in the public domain, so be prepared for even more scrutiny and a faster pace than ever.

We also spoke with Ed Molyneux, the co-founder and CEO of accounting software company?FreeAgent, who further drove home that a listing on AIM had been on the table for quite some time. While Brexit certainly threw some hurdles into the mix, investor activity didn?t suddenly disappear.

Molyneux believed the company, which was founded in 2007, stood as good a chance of success in late 2016 as it would have done by waiting. What’s more, it proved a more appealing source of finance.

All businesses have different funding needs, but technology companies in particular finance for growth,” he said. This is primarily where venture capital”funding comes into play for companies such as ours but a venture capital investor tends to need a business to suit their model, whereby they invest in a number of companies and are potentially relying on one single outsize success to deliver all the returns to the fund. In my opinion, that better suits consumer technology products and services.

Head honcho Ed Molyneux
Head honcho Ed Molyneux

“In our case, pre-IPO, we had already raised ?8m in external equity finance plus debt. However, by going public we believed we could pursue our ambitious growth plans with non-venture capital money. Being listed also gives us credibility in the market.

The company raised £10.7m after listing on AIM, garnering a market capitalisation of £34.1m. It’s also been suggested that it’s the first time a company took the public route after a round of equity crowdfunding. FreeAgent secured £1.2m on Seedrs in July 2015.

It shows that if you know your market will enough, you’re onthe route to success even in a year the world seems to go crazy. Just be prepared to tackle the challenges head on.

“Tackling 2016 just happened to be part of the challenge we set ourselves as a company and I?m glad we did it,”?Molyneux explained. “We re really in a great place in my opinion, but there is always work to do, much like there was in our journey to this point. I?m really looking forward to next few years and the challenges and opportunities we will face.

As they say, fortune favours the brave.

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