Being public also provides you with the benefit of being able to issue your own currency by issuing new shares to acquire unlisted companies and other firms.

This is the critical factor a company considers doing an IPO or selling into a private equity firm or whatever the end goal is.

This is where RTOs (Reverse Takeover) started, which is a simple way to take companies public. What we found out during the listing of MBH, is that listing a SPAC “Special Purpose Acquisition Company” on exchanges is getting more difficult. Most exchanges either don’t allow them, or they put so much regulation around them that it’s harder than listing an operating company.

In mid-2018, Spotify listed on the New York Stock Exchange by means of a Direct Listing. A Direct Listing is simply accomplished by stripping out the layers of a “regular” IPO, by simply applying as a company directly to the exchange to list on their exchange.

So effectively, we set up a SPAC, we get all of those clearances, we reverse the vehicle in, and the deal that we do with the exchange is that we’re going to reverse this other vehicle in at the same time as we list.Reverse-Takeover-Rules-Uk

At the moment, the best exchange list in Europe is Xetra since you get the volume and the depth of the market there without producing a prospectus, since it is a direct listing application.

Starting the listing process to completion takes a typical timeline for the company to be listed, having removed all the extraneous IPO things that you’re not doing now brings the timeframe down to no more than 90 days.

The other thing you can do is pick the valuation at which you list the target company when reversed into the business that creates the capital in the company.

Ultimately, we receive a valuation based on that particular target company, perhaps 8 million, but the overall vehicle might be worth 12 million.

You set the share price, and then you start trading at that price. Then, the market will determine what the real value is, if people think the price is overvalued, the price will go down. And if they think it’s undervalued, then they’ll buy it, and it will go up.

One of the major benefits of this approach is that you will get a pretty good valuation on the company as you effectively take public company value for a small company, a reasonably short run to liquidity.

If your company is profitable, run well with a solid profit, or are really doing quite awesome with a great story or something that’s got a fast growth potential, or just doing very well.

Do reach out and drop me a line about the concept and I’ll share with you how we can work this out for you.

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