23% of the UK’s tech entrepreneurs have ambitions to list on AIM
Majority of tech founders believe the London Stock Exchange's junior market is "natural home" for country's fast-growing technology companies
Almost a quarter of the UK’s technology entrepreneurs plan to float on the London Stock Exchange’s (LSE) Alternative Investment Market (AIM), a report from law firm Nabarro has suggested.
The majority of tech business founders surveyed said they agreed or strongly agreed that AIM “is the natural home” for fast-growing technology companies and said they would select AIM as their exit strategy to realise value for some of their stock (38%), gain access to capital markets (31%), and to grow more quickly (14%).
The biggest concerns given for listing on AIM were more regulation (as cited by 56%) and a loss of control (22%), these concerns follow a recent report published by Growing Business which indicated a sharp drop in the number of businesses trading on AIM this past year.
While a large number of tech start-ups and small businesses are considering AIM, listing on other markets was a much more popular ambition (48%) and a trade sale to a bigger tech company was also a popular exit strategy for 21%.
Appetite among AIM investors for technology stocks is growing; the report found that 59% of investors hold up to a third of their current AIM investments in tech while 53% are set to increase their exposure to AIM tech stocks.
Nabarro corporate partner, Alasdair Steele, said that “businesses need to consider floating on a AIM as a stepping stone to raise capital and profile […] rather than pinning their hopes on a trade sale to one of the ‘Big Five’ technology brands.”
Guy Heath, partner and head of technology at Nabarro, added:
“Investor demand for AIM technology stocks is high, and set to increase over the next five years. If the ambitions of founders meet the increasing appetite of investors for tech stocks, then AIM could become a breeding ground for a new generation of UK and European unicorns.”