As AIM continues to evolve into a major global exchange, attracting an ever growing number of small and mid cap growth companies, institutional investors, which accounts for the majority of all IPO funds raised, are becoming increasingly sophisticated in their investment decisions. This, as well as greater pressure from the London Stock Exchange, is driving NOMAD/brokers to become more selective in the types of companies they are willing to sponsor onto AIM.

While each company will be judged on its own merits, AIM candidates will get the greatest amount    of attention from NOMAD/brokers and investors if they can demonstrate some of the following characteristics:

• Experienced management team & proper board structure

• Good presentational/communicational skills

• Strong operational track record and evidence of ability to execute

• Significant growth potential

• Evidence of commercialization/customers

• Stability and visibility of revenue (unless specialist situations such as biotechnology or E&P)

• Large addressable markets with defendable position/barriers to entry

• Innovative or unique products/services/technology

• Clear competitive advantages

While not essential, AIM investors also tend to like:

• Genuine reasons for coming to AIM to raise money

• UK non-executive representation

• A UK/European angle to the business

• Critical mass in terms of stage of development (profitability/cash generation)

• Liquidity driven by scale (a pre money valuation of $25m+, fund raising requirement of $10m+ and free float of 20-30%)

The final ingredient that makes a huge difference for investors is the advisory team that the company appoints. This critical component of ensuring a successful IPO that maximizes valuation is where First Columbus Advisory focuses – please click here.

Please note that AIM investors are often willing to back companies that may not tick many of these boxes but are nevertheless in unique situations. In these circumstances it is critical that the investment story is positioned to both the NOMAD/brokers and investors correctly. This is a key area  of First Columbus’ expertise given our experience and relationships in London.