High costs for small firms on AIM
Wednesday 19 April 2006
Small firms that look to list on the Alternative Investment Market (AIM) to raise funds could spend a quarter of the amount raised on professional fees, according to new research.
Firms wanting to list on AIM are required to appoint a nominated adviser to carry out due diligence and assess whether the business is appropriate for the market and accountancy firm UHY Hacker Young has found that firms wanting to raise less than £2 million on the market could be charged up to 25% in advisory fees.
Peter Petyt, head of corporate finance at the firm, says “While AIM is ideal for firms wanting to raise £5 million or more, companies requiring smaller capital raisings should consider other finance raising options.”
The firm suggests looking for pre-intial public offering (IPO) finance through business angels, Venture Capital Trusts, private equity specialists and government-backed regional venture capital funds before listing on AIM.
Petyt explains that this can be a cost effective way to prepare a growing company for a larger and ultimately more successful AIM listing.
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