Raising equity funds under the new liberalised IPO rules


If a client company asks how to raise funds where debt is not suitable, there is a new answer to add to the mix available since 1 April. Perhaps an entrepreneurial company has an innovative product which still needs some development and the potential market looks attractive. Perhaps the company is relatively mature and very profitable and the owner wishes to sell some shares to realise the asset for personal purposes. Do the provisions of the Financial Markets Conduct Act 2013 provide any new avenue for raising funds?

For the entrepreneur, for many years, the angel investment process has become well developed to provide funding for innovations. The angel process was necessary because the Securities Act 1978 prohibits public offers unless accompanied by a Prospectus and Investment Statement Disclosure. Costs made this route prohibitive for smaller amounts.

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