AIM’s success has spawned a massive proliferation in the number of advisors, in each of the four critical categories, that companies must choose between when looking to put together the best IPO advisory team. Please click on the links below to review some of the important issues in each category appointment:

• NOMAD/brokers – There are now 85 firms registered as NOMADs and 96 as brokers, all of varying sizes, expertise and reputations.

• Lawyers – There well over 100 law firms offering to handle part or all of the AIM IPO. A growing number are internationally based although have less experince in doing AIM IPO's, particularly for international companies.

• Accountants – Over 50 accountancy firms facilitate AIM offerings.

• Financial PR – In this unregulated spaces there are literally hundreds of firms all pitching their ability to help companies on AIM.

Each appointment needs to be very carefully considered given the significant financial risks at stake if the wrong selection is made in any category. The market is also fluid with each firm's strengths and weaknesses changing over time. Without being based in London and having a finger on the pulse, it is often difficult for international companies to make the right selections. First Columbus’ expertise lies in helping introduce companies to the best in each category based on each company’s particular characteristics and requirements. Once you appoint First Columbus as your IPO advisor, all these difficult introductions and decisions are removed and handled by us.

Choosing the best NOMAD/broker?

There are very few ‘one size fits all’ NOMAD/brokers in the market. Each has its own area of speciality, strengths and weaknesses and these also change over time. Companies must therefore consider a huge number of moving parts when looking to get aboard the most suitable NOMAD/broker:

• Fund raising ability? Brokers have varying abilities in the size of fund raising, particularly as the amount grows.  
• Expertise? Commercial and technical advisory ability; equity distribution ability; and strength of research.
•  Recent deal history? The short term track record can have a big impact the valuation of its next IPO.
•  Sepcialist knowledge of the sector?
•  Reputation amongst the buy side institutions?
•  Speed, capacity, depth and commerciality of the sales and corporate finance teams?
•  Cost? This can vary materially from firm to firm.
• Chemistry? Management will need to work closely with the firm for years to come.
• Ability to get the valuation right?                                                                                                                  i) Has the broker pitched a high valuation to win the mandate? Often shares then trade at a discount to the IPO price, the stock then gets credibility issues with investors and future fund raisings are difficult.                                                                                                                                   ii) Has the broker pitched the valuation too low to make the IPO process easy? This can         cause excessive dilution for management/initial investors and again credibility issues.

 Making the wrong decision can have a number of ramifications including:

• A failed IPO. Asides from the financial costs and wasted management time, the company rarely  gets the chance to return later as it is viewed tainted.
•  Significant value left on the table at IPO.
•  Unfavourable Engagement Letters signed with advisors.
•  Poor post IPO representation resulting in value erosion.
•  Difficultly raising further capital in the secondary market.
•  Difficult for initial investors to effect a comfortable exit both at IPO and once admitted.

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Choosing the best lawyers

International companies will need to appoint a UK based law firm in addition to their local council to effect and AIM IPO. There are three broad areas that need to be considered when selecting a lawyer to handle the AIM IPO:

• Reputation – Investors pay significant attention to the law firm that is helping to handle the IPO and reputation can contribute materially to valuation and comfort levels of the institutions.

• International IPO experience – Some law firms are more experienced in handling international IPOs and thus can provide specialist advice to management and investors based on the country of incorporation and hence the issues that need to be considered.

• Areas of specialism  - As with many brokers, law firms tend to be stronger in some sectors and countries than others.

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Choosing the best accountants

• Reputation – Although less of an issue than with the NOMAD/broker and lawyer, the selected accountant’s reputation is nevertheless important from a credibility stance with investors.

• International reach – Particularly for international companies, it is often better to select an accountant with operations in its domestic market. This can speed up the initial due diligence required and keep the costs lower. However, it is also important to avoid firms with new branches that have not been tried and tested.

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Choosing the best Financial PR

Unlike the other three categories, financial PR firms do not need to be regulated. This has resulted in a significant number of firms entering the space with varying degrees of expertise and ability to deliver so selection is critical. The London Stock Exchange’s Joining AIM publication states that “some overseas companies that are unfamiliar with the London market will discover that selecting a PR firm that will really add value can be as difficult as finding a needle in a haystack”. We know which are the very best PR firms to appoint that will make a big difference to perceptions and valuations both through the IPO process as well as ongoing once admitted.

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