03Jun

THE ROAD TO ASX FOR TECHNOLOGY COMPANIES

CEO l Venture Capitalist

Western Australia traditionally known as a  ‘resources state’, has been replacing its exploration company focus to acquisitions of new technology assets.  It has always been an innovation State fueled by the entrepreneurial spirit that was required to colonise and grow such a vast area.  At a time when the resources industry is facing significant struggles after years of prosperity, it is indeed fortunate to have such a dynamic and passionate industry developing within and across its borders.  

There are many advantages for a company to be listed on the ASX, the main one being access to capital and liquidity, increased market awareness and valuation potential, the retention of employees via option schemes, secondary market liquidity and a great access to funding.  It also provides nominal compliance costs compared with other exchanges and an opportunity to list on other exchanges with reduced compliance and an exit mechanism.

Below are some examples:

Undertaking a reverse takeover (rto) on the ASX is a 3-4 month procedure.  Planning is the most important and includes the preparation and execution of a Term Sheet setting out the structure of the company and how it will comply with the ASX requirements.  This information is then released to the market.  Execution of the process involves the preparation of a Notice of Meeting and a Prospectus, liaising with experts and marketing the product and the company to potential shareholders.  A roadshow may be required. The process culminates with a shareholder meeting, the allocation and the closing of prospectus and the re-listing of the Company.

As with all new enterprises there are always disadvantages to way up before listing on the ASX.  The first is the compliance with ASX Listing Rules, and also a reduction in control and increased disclosure requirements.  There are new responsibilities and restrictions for management including escrow restrictions and the share price is subject to stock market fluctuations.   Meccano Consulting is well placed to assist you with:

  • Corporate Structure – Assistance in setting up the corporate structure to ensure the market finds the offer appealing, we can assist with fundraisings and help direct any over-subscriptions into the aftermarket. 
  • Provide an already funded vehicle – Instead of an IPO an alternative way to list on the ASX is a reverse takeover. 
  • Back office who can oversee the acquisition, and continue to provide seamless compliance with all Listing Rules/Corporations Act requirements so that local management can continue to focus on the business.

Mark is an entrepreneur, investor, board member, and advisor to startups in the US and Australia. He has worked in venture capital for over 17 years focusing in international public companies.

#fundraisings, #ASX, #RTO, #capitalraisings, 

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