There are many markets around the world available for emerging companies serious about capital raising and providing a transparent and accountable mechanism to engage investors.

Frankfurt:

The Deutsche Börse is one of the oldest and more established stock markets in the world, tracing its origins to the 16th century. It is widely recognized as one of the   world’s largest and profitable exchange organizations. 

Arguably a centre and financial hub of Europe, this market offers the right company access to a large institutional investor and consumer base, almost 35% of the world’s institutional capital flows through Frankfurt.  The Deutsche Börse can cater for companies of all types, nationalities and sizes, with varying levels of transparency and ongoing requirements.

The market is made up of various segments, namely, First Quotation Board, Entry Standard, General Standard and Prime Standard, offering a choice of listing segments that best suit the stage of the company. The OPEN (regulated by the exchange) is the first entry point for small companies seeking a “staged” approach to the market (walk before you can run).

OPEN Market:

The OPEN market is a regulated unofficial market, which is governed by private law.

This market is divided into the First Quotation Board for primary listings and Second Quotation Board for companies already admitted to trading on a domestic or foreign exchange-like market, and Entry Standard. Both of these enable companies to enter markets with fewer transaction costs and transparency requirements. Access to this segment may be done through a private placement without a prospectus, thus avoiding a costly process that normally entails an Initial Public Offering (IPO). The OPEN market is not unlike (in principle) to London’s AIM or the CAC in Paris, or the OTCBB in the US. However, from a performance, cost and compliance perspective, it is truly one of the only “OPEN” markets available to small to medium companies.

• Companies get a fair valuation, more reasonable listing with better liquidity, but lower transaction costs and listings fees.
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• Direct access to a large global investor pool - The pool of directly connected investors out of Frankfurt represents approximately 35% of worldwide institutional capital.
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• Listing in Europe’s largest economy with the largest consumer and private investor base, with the highest number of trades and turnover velocity in Europe.
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• Very low formal requirements, e.g. no official specifications for age, sales, industry, volume of the issue, no reporting or language implications and a minimum of red tape or ongoing requirements.
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• Improved visibility among investors gives the company a stronger competitive position. The company also has the potential to upgrade (subsequent promotion) to the EU regulated markets after 12 months.
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• Trading on Frankfurt opens trading windows to over 19 countries through the XETRA trading platform. This forms an efficient trading network and provides access to over 4,600 traders.
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• One last important point to remember is that by listing in Frankfurt, North American companies avoid Sarbanes-Oxley requirements and obligations, which can be quite onerous and expensive for emerging companies.

Toronto

Across the Atlantic, Canada offers a good option for companies seeking to list on a stock exchange. The Toronto Stock Exchange has been known for many years as the place for mining, energy and resources companies. However, they also position themselves to target early stage companies across a number of sectors. The TSX Venture Exchange is a platform designed to provide access to growing capital for early stage companies, at the same time providing a transparent and well-regulated market for investors. The TSX is therefore well suited for emerging companies. Some benefits from listing on the TSX Ventures platform include:

• Access to capital for earlier stage companies and smaller financings (typical financing range: $500,000 to $20 million), the provision of multiple financing rounds at subsequent higher valuations is possible.
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• The TSX offers a cost-effective stepping stone (staged) strategy for international companies seeking to list in the North American market.
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• Tailored listing and corporate governance requirements for small-cap companies and a streamlined graduation to Toronto Stock Exchange.