From the moment they invest, investors are looking for an exit point to transfer their investment, freeing up funds to invest in new ventures. Growth stock markets can provide them with this exit route. These markets offer listing opportunities with simplified requirements for firms that cannot or do not want to be listed on the main stock markets. Listing provides these firms with access to a potentially wider equity-investor base.
Unfortunately, the European alternative equity markets are relatively weak. Firms need easier EU-wide access to growth stock markets to become listed easily and make stocks accessible to qualified investors in the EU. Improved access to financing through stock markets could create flotation opportunities for firms seeking to broaden their capital base on competitive terms. Initial public offerings of stock provide a natural exit route for venture capital investors and give valuation guidance for sale to other companies.
Without flexible exit markets for venture capital, ideally surrounded by relevant advisory services, venture capital funds will face difficulties. This weakness strangles the growth of key SMEs.
Related growth market activities
Every year, the European Small and Mid-Cap Awards promotes best practices and highlight the best European small and mid-sized companies that accessed capital markets via an initial public offering (IPO). Presented by the Federation of European Securities Exchanges (FESE), the European Issuers and the European Commission, they showcase the diversity of European markets and promote stock listings, targeting SMEs and growth companies. Read about the 2019 Small and Mid-Cap Award winners.