There are a myriad of options for listing your company and countries in which to do it. One option that you may wish to consider is the National Stock Exchange in Australia. If you are an owner-manager looking for growth funding, and you want to maintain control, then the NSX could be a key tool in your growth strategy. If you are a senior-manager and need to raise capital to buy-out the existing owners, then the NSX could be the way forward. If you are looking for a transition of ownership plan, then the NSX can provide a structured pathway to maximise your wealth objectives. If you want to incentivise your employees, and want to avoid expensive legal and tax structuring costs of employee share schemes, then the NSX can be a tool in your employee retention strategy. Here are 25 detailed reasons the NSX is an option that should be explored for your corporate and cash-exit strategy.

1. Companies that can effectively and regularly ‘print’ tradeable currency – via new share issues to existing and new shareholders – can seize new opportunities faster and bolster competitive advantage.
2. Many owner-managed businesses fail to attract senior management talent and consequently have neither a succession plan nor a range of options for transitioning company ownership. Becoming a public company solves both problems and creates future growth options.
3. There are 18 stockbroking participants of the NSX – including Bell Potter, Macquarie Equities, Ord Minnett and RBS Morgan. This wouldn’t be the case if NSX didn’t have a role to play in facilitating wealth management of Australian companies.
4. There are no complicated pre-emption rules for selling your shares, unlike with a private company.
5. An objective market value is placed on the company.
6. Being public requires adherence to regular disclosure and hence compliance costs will increase. This is offset tenfold by the heightened company profile – by improving the quality of information for investors and potential investors.
7. Your attraction to customers substantially increases. A company with a high profile and open and transparent culture is more attractive to larger customers.
8. If new growth requires an acquisition then both cash and shares can be used as the ‘currency’ to acquire the shares or assets of the target company.
9. The additional corporate governance is a real benefit the listed company can bring to the acquisition target. This can assist to negotiate down the price of the acquisition.
10. For major expansion, being a listed public company improves access to capital. Many investor-channels are simply unavailable to companies not trading on a recognised exchange.
11. It is extremely cost effective to list and stay listed.
12. For example, the fees to pay NSX upon raising $5,000,000 via an initial public offering, including the NSX year one annual fees, will cost only $20,000. The lead manager’s capital raising fees are extra and typically are geared to successful efforts billing arrangements. Legal and accounting compliance costs are also extra.
13. Every listed NSX company appoints a qualified Nominated Adviser to help at the time of listing and during the capital raising process. In addition, Nominated Advisers provide on-going guidance. A Nominated Adviser enhances the reputation of the company, further re-enforcing the share price of the company.
14. The application process to list is designed to be very simple. With good advisors, a listing can be achieved within 2 months.
15. The substantially lower minimum ‘spread’ of shareholders (as compared to ASX) is only 50 shareholders. It is therefore possible for owner-managed businesses and family-owned businesses to quickly achieve a listing while maintaining control and without significant dilution in ownership.
16. The lower minimum contribution per shareholder of $2,000 means that owning a stake is affordable to several employees, work colleagues, family members. As an example, if 48 people contributed on average $5,250 each (i.e. some contributing $2,000, others $10,000 and so forth), then $252,000 would be raised.
17. And, even better news for owner-managed and family businesses, the NSX has a very low market capitalization requirement of only $500,000 after the listing. Because of this reason the NSX can provide a highly valuable and low cost succession planning option.
18. The final – and low entry point useful for companies valued below $1,000,000 – requirement is that after the IPO 25% of the issued shares must be in the hands of the public (i.e. the 48 people in the above example).
19. Completing the example, if 25% represents $252,000 of market capitalization, then the pre-IPO valuation of the company needs to be $750,000. A valuation that many companies facing succession-planning issues will be able to demonstrate.
20. The purpose of all companies – we would argue – is value creation and achieving a high return on investment for its current and future shareholders. Hence, the key to a successful listing is the planned activity and use of funds obtained on the IPO. By effectively communicating the strategic focus of the company and milestones that will increase share price in the Information Memoranda, the chances of securing a higher valuation on IPO and raising more equity are greatly enhanced. Thus providing the company with the vital resources need to accelerate growth.
21. Post-IPO, and after an initial waiting period of not disposing shares (called escrow provisions, negotiated with NSX on a case by case basis upon entry), then founder-shareholders can place a sell order on their shareholding with, say, Ord Minnett or Macquarie Equities, and realise their wealth objectives.
22. Given the larger base of shareholders, there are potentially dozens of shareholders who will place a buy order for shares.
23. If the company is making regular announcements (compliance and media focused) about the growth – acquisitions, new markets, new projects and so forth – there is a high probability that stockbrokers will recommend their clients place buy orders and enjoy good investment returns.
24. With a broader shareholder base, an active market developing for buying and selling shares then there is a greater likelihood of acquisitions being mostly funded with share issues. The reason? Sellers are more confident in the growth in share price and see greater wealth creation by hanging on for another couple of years.
25. The newly listed NSX-company can raise up to 15% of its market capitalisation without shareholder approval in a 12-month period, creating yet more cash to fuel expansion, hiring of staff and making on-going acquisitions. With shareholder approval there is no limit.

Morgan Cradock can help you achieve your growth and cash-exit objectives. An NSX-listing is one option to consider.