Although there are a number of benefits to becoming publicly quoted on AIM it is not necessarily suitable for all companies.
Becoming a public company on a market such as AIM will involve major changes in the way that the business is run. It involves taking in outside shareholders and accepting the responsibilities of increased transparency and reporting obligations, together with the associated time and cost.
Beyond complying with additional regulatory responsibilities, you must also be willing to devote the time and resources necessary to communicate effectively with the market.
Ultimately, the decision to float your company on a public market is yours. You should take into account all the potential benefits and considerations, and decide whether external equity finance will be an appropriate form of finance for the size and stage of your business. For more information, see considerations when joining AIM.
AIM is designed for smaller, growing companies. In order to assess whether your business will be an attractive prospect for potential investors, and if your business is ready to join AIM, you should first consider whether you have:
- a clear business plan - see prepare a business plan and how to use your business plan to get funding
- the relevant skills and experience in your management team
- a trading record that compares favourably with your peers
- potential to increase the market share
- a realistic market valuation
- a definite idea of how much of the business you are intending to float and how this will affect future development
For more information, see secure equity investment.
Alternative sources of finance
If a stock market listing is not suitable for your business, there are alternative ways to increase your business capital including:
- private equity, either through a firm or individual such as a venture capitalist or business angel
- selling the business to a larger business or institutional investor
- debt finance - through obtaining a loan or mortgage
- management or employee buy-out