Secondary market investment via the Independent Stock Market helps you raise Capital

Finance

  • Author Gwendolyn Key
  • Published December 29, 2011
  • Word count 520

In the current economic downturn the need for ready cash has never been greater. Even thriving businesses need cash to keep their doors open, the stock rotating and the business growing. Growth costs money as do stock buyouts or take over's of other companies. So what does one need to raise cash easily?

Well the conventional method involves a lot of paperwork. A healthy balance sheet, audited profit statements showing a consistent history for as long a period as you can (3 years is ideal as that is the minimum for listing on a stock exchange). Then you need to draw up comprehensive and workable plans, budgets and the like.

Then of course your Bank manager will tell you that he will fund an overdraft, at huge interest but selling capital is not what they do. To get a permanent investment you need to find a venture capitalist. Now these guys are around, usually very well off because they are hard eyed businessmen who venture their capital only where they are absolutely certain of making a healthy return. As part of the deal you will find you have taken their money, given up shares and voting rights on your board plus you might have mortgaged your house and sold your children into slavery giving the 'belt, braces and tie around the middle' that they want to lend you the cash. There is no ways they are going to lose a cent.

Now in many instances that is fine. If you secure capital from a Venture Capitalist you are probably a sound investment, so why bother with them and rather get yourself listed on the Stock Exchange. Well the requirements for listing on the exchange are very stringent. Very strict regulation controls entrance and, for a start you will need at least 3 to 4 years profit history, audited, budgets and plans and an awful lot of cash to put up to fund the establishment of the share register, the issuing, the publication of the prospectus and so on.

Depending on your size you might find yourself forking out a million or two and losing 6 months to a year in the preparation. If you have the cash available and the time to spend then great, you may find yourself the president of a listed company. And then you will be fully involved is the hurly burly of corporate life, dealing with stockholders and the like.

But that may not be what you signed up for. You own a successful company manufacturing and marketing widgets which are in huge demand, but you need cash now to put a new line into production, and anyway this is what you do, you dress casually and you are good at knowing the shop floor, the lines that are selling and your customers.

This is where the Independent Stock Market gives you access to Secondary Market Investment and comes into its own. It can assist you find investors in your business without the long and tedious paper work and endless meetings with attorneys and accountants. If you are looking for easy capital the Independent Stock Market may suit you.

In order to raise capital access to Secondary Market Investment is possible via the independent stock market.

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