Wednesday, 12 March 2008

Waning appeal of Aim

Very interesting article in today's FT - Aim loses crown as favoured tech funding source. I commend you to read it in full.

Basically the report quoted an E&Y survey showing that there were just 14 tech AIM IPOs in 2007 compared with 24 in 2006. Conversely a study by the University of Hertfordshire and MIT showed that venture capital funding is "thriving" with "the total VC money put into the tech sector (£1b) was twice the amount raised through AIM (£540m)". Given that AIM investors would have lost 11% if they had participated in all the AIM tech IPO s and 44% in all secondary AIM fundraisings, you can understand the waning appetite!

All of the input and comments coming my way - including the conversation at an excellent private dinner I hosted last night at Mosimanns - supports that view. VCs have plenty of cash and see the current market value correction as a great buying opportunity. This particularly applies at the "small to middling" end. Not quite so much appetite at the £1b+ level - having said that there are not that many UK candidates at that level anyway!

Tax changes have made AIM much less attractive for investors. On top of that AIM illiquidity leads to very volatile share prices. (A recent share sale of mine of just 5000 shares caused the share price of the company in question to slump 5%) Who needs that?

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