Accelerating alternative finance for innovative SMEs by improving connections with stock exchanges and growth marketplaces
Listing on stock exchanges, or going public, can bring strong advantages for small and medium enterprises (SMEs) including access to capital at competitive valuations, a higher degree of diversification of investors, visibility and brand recognition, as well as liquidity for existing shareholders. Despite this, public markets across the EU have been struggling to attract new SMEs as issuers for most of the past two decades.
In this context, the purpose of the TechCapMarkets report is to describe the market conditions for innovative European SMEs and mid-caps to access European public markets, identify challenges and impediments which may prevent them from doing so, and provide policy recommendations as to how these challenges may be addressed.
The report is also set against the backdrop of a record year in 2019 for European companies to raise venture capital funding, and in particular later-stage funding rounds, and the broader rise globally of the private markets. This increase in private capital, has resulted, particularly in US tech companies remaining private for longer, so when they do go public, even if still loss making, they have achieved a scale, and level of market penetration, that makes them appealing to a wide range of public market investors. And while these conditions may emerge in Europe, by the time they do, the gap with other regions such as the US and China may well have further increased.
TechCapMarkets is a project, funded by the European Commission that aims to improve the supply of alternative finance, including venture capital & business angel investments, to tech companies by improving the exit opportunities for shareholders in privately held innovative SMEs and mid-caps.
It is the product of a consortium composed of:
- the consultancy Europe Unlimited (Brussels),
- IESE Business School (University of Navarra)
- the French association PMEfinance (Paris).
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