One of the great things about a community like ATDC is the opportunity to interact with and learn from a diverse group of talented entrepreneurs. Recently, I was speaking with an early-stage entrepreneur regarding their strategy for raising growth capital and received an education on the Alternative Investment Market (AIM). Below is what I learned and more importantly why you should care.
AIM is an exchange owned by the London Stock Exchange focused on small capitalization companies. Wikepedia has a great overview. In comparison to NASDAQ or NYSE, AIM has less stringent reporting requirements and a more flexible regulatory scheme. In fact, there are no minimum listing critieria associated with company size, public float, or prior operating history. Bottom line, these advantages allow small growth companies to access the public market at a fraction of the cost and time associated with a conventional IPO.
Unfortunately, there are tradeoffs to consider. One, the volume of trading on the AIM is lower than the well-known exchanges. Inadequate volume is troubling especially when trying to liquidate a large position, not good for founders or major investors. Additionally, if your company lacks a strong "international story" you may struggle with maintaining analyst coverage and shareholder interest.
While leveraging the AIM is far from a slam dunk, companies with a substantial international presence (in the form of customers and/or operations) looking to tap the public market as a source of development capital (vs. a path to liquidity) should give this option due consideration. If your company fits this description, you probably have some homework to do. Here is a link to the AIM website. Alternatively, if you are starting a company that may resemble this description in 3-4 years, keep an eye on reforms within the U.S. Recently, the SEC established a committee to examine the shortcomings of its current financial reporting system.