Scotsman.com Business - Economy - Tech firms 'too quick to float'
"TOO many technology companies are rushing to the stock market too early, threatening their founders' interests and those of their shareholders, one of Scotland's top business angel investors has warned.
Twelve Scottish companies have floated in the past year - more than in any other 12-month period on record. But Geoffrey
Thomson, the chief executive of Braveheart Ventures, said in many cases those companies should have waited until they were bigger.
Recent stock market debutantes include Stem Cell Sciences, which is worth £21m, MicroEmissive Displays, with a market value of £15m, and Glen Group, headed by Atlantic Telecom founder Graham Duncan, worth £1.7m.
Thomson, who represents 100 wealthy investors, said: "Market values of about £20m are unlikely to give pre-IPO [initial public offering] round investors the necessary levels of return to compensate for risk when they are typically raising £5m to £15m of new money."
Founders could lose out if they brought companies to market too early, Thomson said. "Unless the business is robust, they could trip up. Once they've got the money they've got it, but if the share price falls and they don't get the news flow, it can be desperate."
The boom in small company flotations has been powered by the growth of the Stock Exchange's Alternative Investment Market, which is now home to 1,300 firms."
Read more here.
Twelve Scottish companies have floated in the past year - more than in any other 12-month period on record. But Geoffrey
Thomson, the chief executive of Braveheart Ventures, said in many cases those companies should have waited until they were bigger.
Recent stock market debutantes include Stem Cell Sciences, which is worth £21m, MicroEmissive Displays, with a market value of £15m, and Glen Group, headed by Atlantic Telecom founder Graham Duncan, worth £1.7m.
Thomson, who represents 100 wealthy investors, said: "Market values of about £20m are unlikely to give pre-IPO [initial public offering] round investors the necessary levels of return to compensate for risk when they are typically raising £5m to £15m of new money."
Founders could lose out if they brought companies to market too early, Thomson said. "Unless the business is robust, they could trip up. Once they've got the money they've got it, but if the share price falls and they don't get the news flow, it can be desperate."
The boom in small company flotations has been powered by the growth of the Stock Exchange's Alternative Investment Market, which is now home to 1,300 firms."
Read more here.
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For more information, visit www.EvanCarmichael.com. |
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