Securities & Derivatives Exchange
This guide and all information contained therein (the “Information”) is for your general information only. The Information should not be used as a substitute for professional advice. Potential and existing investors, and ICAP Securities & Derivatives Exchange (ISDX) Growth Market Companies, should take their own bespoke professional advice with respect to taking a company public or investing in a company. Nothing in this guide should be construed as a recommendation for any specific course of action. The Information is not, and should not be construed as, an offer, bid, recommendation or solicitation in relation to any financial instrument or investment or to participate in any recognised investment exchange. The Information is not to be relied upon and is not warranted, including, but not limited, as to completeness, timeliness or accuracy. The Information does not necessary reflect the views of ICAP Securities & Derivatives Exchange Limited. All representations and warranties are expressly disclaimed. The views expressed and materials presented by Company CEO’s in the guide represent the personal views of individual members and do not represent the opinion of ISDX. The services offered by ICAP Securities & Derivatives Exchange Corporate Advisers are not provided by ICAP Securities & Derivatives Exchange or any member of the ICAP Group but are instead provided by third parties over whom neither ICAP Securities & Derivatives Exchange nor any member of the ICAP Group have any control. It is your responsibility to ensure that your Corporate Adviser has the necessary experience and suitability for your company. Neither ICAP Securities & Derivatives Exchange nor any member of the ICAP Group is responsible for any services provided or fees you incur by engaging an intermediary group, including but not withstanding Corporate Advisers, Brokers and Legal representation.
ICAP Securities & Derivatives Exchange Limited is a Recognised Investment Exchange under the Financial Services and Markets Act 2000, a Recognised Stock Exchange under the Income Tax Act 2007 and a member of the ICAP Group. ICAP Securities & Derivatives Exchange Limited is registered in England and Wales (Co No. 04309969) with its registered office at ICAP Plc, 2 Broadgate, London EC2M 7UR.
ISDX Growth Market
Issuers introduction
unique
opportunity to raise capital The ISDX Growth Market is designed specifically for small and mid-cap entrepreneurial companies looking to raise growth capital, achieve an independent market valuation and enhance their corporate profile.
Access capital at a key stage in your company’s development The ISDX Growth Market is positioned to serve the needs of businesses seeking funding typically between £150,000 and £5million. A market where you can demonstrate strong characteristics for growth Robust, but flexible, joining criteria provide investors with confidence that companies on market are ‘investment ready’. Raise the profile of your business The ISDX Growth Market offers a wide range of services to help increase your profile and promote your company’s services to a broad range of market participants.
The ISDX Growth Market is operated by ICAP Securities & Derivatives Exchange (ISDX), a Recognised Investment Exchange, a Recognised Stock Exchange and a member of the ICAP Group - a world-leading markets operator providing a wide variety of electronic execution, risk mitigation, broking and information services to global market participants. ICAP Securities & Derivatives Exchange regulates the conduct of member firms and issuers on its markets, monitors trading and market activity, and maintains rules and guidance to provide a neutral and transparent venue for raising capital and trading securities. For more information, visit the Regulation and Market Rules pages on ISDX.com
assist
bridging the equity gap Our objective is to build confidence in the small and mid-cap sector by providing a platform for exciting high growth opportunities. We are servicing an area of the market which has not been clearly addressed by banks or other sources of funding in recent years and will cater specifically to companies typically looking for funding between £150,000 - £5 million.
When we founded Sprue a listing was the preferred option for the company. The dilutive effect of listing on ISDX was far less than other early stage funding venues, which in turn strengthened the business by imposing strong fiscal discipline.
Typical fund-raise
Crowd Funding
ISDX Growth Market
AIM
ISDX Main Board LSE Main Market
£10k to £150k
£150k to £5m
£3m to £30m*
£10m to £bns**
More than 10 years on, the listing has allowed Sprue to raise additional capital and as the business developed, a strong share price appreciation has followed. Today, the founders still retain a meaningful equity position in the business based upon our early decisions.”
Applicable tax reliefs
SEIS
EIS
IHT
VCT
ISA SIPP
Graham RA Whitworth CHAIRMAN AND GROUP CEO, SPRUE AEGIS Typical investor base
Private individuals Business angels Founders Friends and family
Private individuals Growth funds Venture capital Private equity
THE EQUITY GAP
Institutional funds Initial public offers
* average £15m ** average £350m
strong
growth potential We are proud to have on our market some of the most exciting small and mid-cap companies in the UK.
The diverse range of companies on the Growth Market, together with compelling case-studies, demonstrates the wide range of attractive investment propositions available. Visit ISDX.com for a complete list of companies on the ISDX Growth Market. Because we are focused on companies seeking between ÂŁ150,000 and ÂŁ5 million, your company will not get lost amongst other companies of widely varying sizes but will be valued alongside its peers. Our Our admission criteria give confidence to investors - as they ensure that only well-managed companies with high growth potential are admitted to our market - so you are better placed to raise funds at a fair valuation. This also means your business will enjoy be clearly visible to investors seeking high growth opportunities.
A selection of companies on the ISDX Growth Market:
join
a market to achieve goals Whatever your reason for joining a public market, ISDX is well positioned to help you achieve your goals.
Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt laborum.” A Sample
CHAIRMAN AND GROUP CEO BIOVENTIX
For small entrepreneurial and family businesses, share schemes and share options schemes can be a significant part of the benefits package to help to attract and retain highly skilled and motivated directors and senior employees.
Typically these might be to: • enhance your company’s profile, in particular with potential new customers who may become aware of your company for the first time; • provide an independent valuation for your business, allowing traded companies to use shares as an acquisition currency. This can be used for buying both private and quoted companies. It can also facilitate exit strategies, for example, a trade sale can be accelerated by the independent valuation achieved by the constant two way pricing of traded stock; • help existing shareholders – whether they are family members, founders or venture capitalists – to realise the value of their investment by providing a trading facility in the company’s shares;
• provide the wider market with the confidence that your company has gone through a rigorous scrutiny process. The disclosure requirements imposed on a Growth Market company show that it has appropriate systems and controls in place, has financial standing and has appropriate levels of management. This in turn could potentially allow your company to conduct business on more favourable terms with new partners or customers; • support employee share schemes and share option schemes to incentivise, retain and motivate employees and to attract new employees. Having a visible and independent value for the company’s shares may stimulate employee participation and engender long-term commitment to the business.
reach
investors and wider market
Whatever your reasons for going public, whether to gain an independent valuation or simply to benefit from the enhanced status that a public listing brings, ISDX can provide you with a wide range of tools to raise your company’s profile amongst investors and the market.
Your own dedicated page on ISDX.com
Executive videos and webcasts
ISDX.com is an ideal setting for the market to find out about your company’s investment proposition. Content on the site includes an overview of trading history – including interactive charting – company announcements, investor documents, company reports and account documentation and, of course, your own company contact details. And because you will have a dedicated page you can link to this directly from your own company website.
Commissioned by ISDX, the Growth Market video and webcast series provides senior management at quoted companies with a platform to promote company news and announcements to the investor community. Distribution channels include London South East, Factset, What Investment, FACTIVA and Bloomberg. The series is also made available on ISDX.com.
Investor evenings ISDX Investor evenings provide public companies on the Growth Market with the opportunity to present their business plans, strategy and investment propositions to an engaged audience of prospective retail and institutional investors interested in highgrowth companies.
ISDX approved Corporate Advisers ISDX-approved Corporate Advisers will help guide your company either through the process of joining the market, project managing the application process and ensuring that the application document complies with our Rules. Many of our Corporate Advisers have long-standing relationships with leading institutional and high-net worth retail investors who are seeking compelling small and mid-cap investment opportunities. Under our Rules, all companies seeking admission to the ISDX Growth Market must appoint an ISDX-approved Corporate Adviser and retain their services throughout their time on market. An up-to-date list of ISDX-approved Corporate Advisers can be found on ISDX.com
clarity
for you to join Our admission criteria ensure companies admitted to the Growth Market are suitable for being traded on a public market and are ready for investment.
The criteria for entry are prescriptive and clear, and include reference to a company’s trading history, revenues, profitability, and balance sheet assets. To support active trading, the number of shares available to new investors (free float) are used as a measure of suitability for admission. Trading companies applying for admission to the ISDX Growth Market are required to achieve 20 points using the suitability matrix below (each section is capped at 10 points).
Joining criteria Size of free float: 1 point for every 10% of free float * Revenue: 1 point for every £100,000 EBITDA: 1 point for every £30,000 Trading history: 1 year = 1 point; 2 years = 5 points; 3 years = 10 points Gross assets: 1 point for every £1,000,000 *One point as a minimum is required for size of free float. Otherwise, a company will be required to raise a minimum of £250,000 of new money (free float).
You can quickly see if your company demonstrates the characteristics required to join the Growth Market by submitting your details on our interactive eligibility matrix on ISDX.com
Further information on joining the ISDX Growth Market can be found on the ‘How to join’ page on ISDX.com
grow
your company on ISDX Joining the ISDX Growth market will be a means to an end for your company rather than an end in itself. Although “impact day” may bring to a close one chapter in your company’s development it is just the start of another.
What will life be like as an ISDX Growth company? Once the diversion of the float process has ended and you return to day-today management, there will be some differences in the way you operate as a public company. These broadly relate to ongoing compliance with the ISDX Rules for Issuers, such as the requirement to announce publicly anything which might have an impact on your company’s share price, and to publish annual and interim accounts. You will also have to comply with the wider regulatory framework in the UK, including the Company’s Act and the Financial Markets and Services Act which apply to companies quoted on any UK market. Your advisers will make you aware of the legal and regulatory responsibilities involved in being a director of an ISDX company and will help you to comply with these.
In addition to these regulatory requirements, you will want to ensure that you gain the maximum benefit from your quotation. For example, it will be important to communicate regularly with your shareholders and the wider market to make sure that they are up to date with developments in the business. Maintaining a high profile will help to encourage trading in your shares and contribute to a more representative share price. ISDX can support you in this. Cost of joining and annual fees The cost of joining and remaining on market varies dependent on a number of factors including, but not limited to, the the company’s size, and the nature of the securities being admitted to market.
For more information on the ISDX Growth Market, please contact an ISDX representative: T: +44 (0) 20 7050 7650 E: isdx@icap.com www.isdx.com