The PLUS market is increasingly replacing AIM as the preferred destination for small, fast-growth companies looking to raise equity finance, gain an independent valuation and enhance their profile. Here's why:
The admission process for PLUS averages between £100,000 and £150,000 so offers considerable savings on an AIM listing, which rarely costs under £500,000 and can easily mount to £1m. Ongoing advisor, regulation costs and fees are also substantially lower.
PLUS positions itself as the market for small companies that is light on regulation and comparatively low-cost - so, as you'd expect, its listing process is far less onerous than an AIM IPO. You don't have to raise funds immediately, either: you can join PLUS simply to raise profile or to get an independent value for your company. This only requires an admission announcement and limited application documentation filed by a PLUS corporate advisor.
Even if you are looking to raise funds you won't need to file a full prospectus or admission document (required on AIM and where the time and costs build up) if you're offering a private placement to fewer than 100 people.
Five years ago, AIM's main sales pitch was that it cost less than a main LSE listing and was the alternative market where small companies would get more profile. Now AIM's a pretty damn pond packed itself, PLUS is where small companies stand a better chance of making a splash.
Compared to AIM's 1,500-plus companies, just 201 companies are currently quoted on PLUS. Those raising cash typically close between £1-2m and on average have a market cap of £20m.
Okay, so PLUS doesn't have the liquidity or profile of AIM but since becoming a 'Recognised Investment Exchange' in 2007, its stock has reason considerably with investors.
To help you on your business journey, we've created Smarta Business Builder, the complete online tools package for growing your business. Website Builder, Business Plans, Accounting Software, Legal Documents and Email - all in one place - from just £20 per month with no contract! Try it out today.