By Daniel Hunter
In further action to make Britain one of the best places in the world to start, run and grow a business, the Government has developed a set of ambitious proposals with London Stock Exchange to attract entrepreneurs and high-growth companies.
Proposals will include a planned new route to the UK IPO market for high-growth companies, which is likely to feature reformed rules on free float, eligibility criteria and reporting requirements. This will ensure that the needs of dynamic businesses — particularly internet and technology companies – and their investors are met.
Acting as a ‘launch pad’ for companies seeking a full Premium Listing, this is aimed, in particular, at European mid-sized high-growth businesses which are currently under-represented on the UK’s public markets.
President Obama’s JOBS Act streamlined the regulatory burden for growth companies listing on US public markets. These new proposals will now make the UK an equally attractive and competitive listing destination for high-growth businesses and are part of a larger ongoing process of ensuring that public markets continue to meet the funding needs of growing, ambitious companies.
In addition, Government will also investigate the current regulatory rules that may be deterring investors from funding growth companies, and will work with London Stock Exchange to widen the availability of equity capital for both UK and international businesses looking to make the UK their global base.
Minister for Universities and Science, David Willetts said:
“There is a rich crop of innovative European high-tech companies that will be going to the financial market over the next few years. We’re determined to make sure that as many as possible should do an IPO and float in the UK, not elsewhere.
“This bold action will send a signal to entrepreneurs and investors across Europe that London’s public markets are throwing open their doors to high-growth companies.
“I have no doubt that this new route to market will help to bring new investment and new jobs to London in the months ahead.”
London Stock Exchange Group Chief Executive, Xavier Rolet said:
“There is a direct and proven link between IPOs and job creation. Attracting both entrepreneurial businesses and the investors that support them to the UK is key to driving growth and generating jobs.
“We are delighted to be working on this package of measures with the UK Government.”
Stefan Glaenzer, co-founder of Passion Capital said:
“This is great news for technology entrepreneurs and investors across Europe. It’s vital that we enable more European companies to IPO in London, as this will not only create vital new jobs and investment, but it will also help more European companies grow into world-beaters. We need to create digital companies who end up on the buy side and not sell out. An IPO is not a sell out, it’s the beginning of the next phase.”
Reshma Sehoni of Seedcamp said:
“Seedcamp and others have done a lot of work to support early stage tech companies in Europe. It’s great news that the Government is announcing these proposals to make it more attractive for technology companies to IPO in London. The quality of the entire business ecosystem will improve if the UK remains globally competitive, and particularly so with the US, so that we retain more of our best tech companies and all the jobs and revenues that they create.”
Neil Rimer of Index Ventures said:
“We’ve seen over the last 20 years, more and more great companies being born in Europe and Israel, but very few of these businesses have taken their next stage of growth by accessing one of the world¹s most powerful capital markets.
“It’s great news for entrepreneurs everywhere that London is stepping up and not just being a great place to start a company but to build huge sustainable businesses. Our hope is that today¹s good news from Downing Street will encourage more high-growth companies created in Europe to go big and stay home.”
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