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Should you list on AIM Part 2
The first part of this article, published last month, gave an overview of how AIM works. This month, we take a more detailed look at the pros and cons of an AIM flotation.
First, the benefits. The reason a lot of companies choose to float on AIM is to raise acquisition finance - this is one AIM¹s key benfits. You can sell some equity, retain control of the company, and fund your acquisitive growth. Unlike a main market listing, AIM does not require that a minimum of 25% of shares must be placed in public hands, so you can choose how much equity to release.
An AIM listing can also provide existing shareholders with an opportunity to unlock some of their equity and realise their investment. They will have the option of doing this as soon as the company goes public, or at a later stage when the share price promises a good return on their investment. It is worth bearing in mind, however, that if shareholder exit strategy is the only or main reason for the flotation, a trade sale may be a simpler way out of the business.
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