How to get listed on AIM
What to expect from the London Stock Exchange's application process for AIM
Step One – Nomad approval
Once you’ve appointed a Nomad they’ll look into your business to see you meet the criteria needed for AIM. If they don’t think you do, they won’t risk their reputation by approving you. However, they will offer guidance and assistance on the changes you need to make.
Step Two – Due diligence
Convincing a Nomad you’re suitable for AIM is only the start. You then enter a process of due diligence. Lawyers and accountants study your company to ensure there are no problems to cause the Nomad trouble.
The scrutiny will be severe. It won’t just analyse the company accounts but the capabilities of the management team. The accountant will examine the company’s financial projections and conclude on the directors’ ability to prepare reliable budgets.
Their findings will be published in a series of reports. While the process might be tiresome it’s eventually rewarding as the more transparent your company appears to investors the more likely they are to invest.
Step Three: The application
The process is rapid. AIM should be informed 10 working days before it is made, with the application itself made three days before the planned date of listing.
Three documents are required for the application: a prospectus, an application form signed by the directors and a letter from the Nomad confirming its appointment.
The prospectus is a summary of the offering to investors. It contains a full description of the company, its activities and capital, trading performance and profiles and histories of all directors and shareholders.
Step Four: Fundraising
You have 40 days from issuing the prospectus to raise the minimum investment set by your Nomad and broker. If not reached in time, the cash will have to be returned.
The broker will help put together a presentation and arrange an investment roadshow where you’ll pitch to backers who will hopefully agree to invest and sign a contract with the broker agreeing the funding.
However, even getting in front of the right investors with the right presentation is no guarantee of winning investment as the market fluctuates throughout the year as funds fill and, inevitably, empty.
“You’ll always get something,” says Wright. “But towards the summer months there are fewer IPOs as many fund managers are spent out.”