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What is the role of public feeder markets in developing technology-based small firms? An exploration of the motivations for listing on AIM since the GFC

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  • Robert Baldock

Abstract

In the aftermath of the 2007 global financial crisis, stock markets experienced a sharp decline in listings and a marked reduction in initial public offerings (IPOs). This paper explores the factors determining UK technology-based small firm (TBSF) listings on the UK alternative investment market (AIM) and whether this market has a role to play in their future development. A case-study approach is used to contrast the experiences of five recent AIM-listed TBSFs with five TBSFs approaching private equity investment exit, i.e. considering an IPO exit. The paper concludes that macro market conditions, rather than managerial resource-based or AIM market structural factors, were most influential in TBSF pecking-order preferences to undertake IPOs. From a managerial resource-based perspective, lifelong entrepreneurs were more likely than serial entrepreneurs to favour an IPO exit, as it supported their aims to continue to manage and grow UK-based companies. In addition, with a more buoyant and sustainable AIM market, TBSF investors are more likely to choose IPOs. To conclude, AIM played an important role in the development of listed UK TBSFs. A more buoyant AIM could ease the UK finance escalator's flow, facilitating more rapid UK TBSF growth.

Suggested Citation

  • Robert Baldock, 2015. "What is the role of public feeder markets in developing technology-based small firms? An exploration of the motivations for listing on AIM since the GFC," Venture Capital, Taylor & Francis Journals, vol. 17(1-2), pages 87-112, April.
    • Handle: RePEc:taf:veecee:v:17:y:2015:i:1-2:p:87-112
    DOI: 10.1080/13691066.2015.1021028
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    References listed on IDEAS

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    1. Stuart Fraser & Sumon Bhaumik & Mike Wright, 2013. "What do we know about the relationship between entrepreneurial finance and growth?," White Papers 0004, Enterprise Research Centre.
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    Cited by:

    1. Thanh Huynh, 2016. "Early-stage fundraising of university spin-offs: a study through demand-site perspectives," Venture Capital, Taylor & Francis Journals, vol. 18(4), pages 345-367, October.
    2. Cécile Carpentier & Jean-Marc Suret, 2018. "Entrepreneurs and Junior Markets: An Assessment," CIRANO Working Papers 2018s-18, CIRANO.
    3. Robert Baldock, 2016. "An assessment of the business impacts of the UK’s Enterprise Capital Funds," Environment and Planning C, , vol. 34(8), pages 1556-1581, December.
    4. Valérie Revest & Alessandro Sapio, 2019. "Alternative equity markets and firm creation," Journal of Evolutionary Economics, Springer, vol. 29(3), pages 1083-1118, July.
    5. Valérie Revest & Alessandro Sapio, 2019. "Alternative equity markets and firm creation," Post-Print halshs-02169726, HAL.
    6. Robyn Owen (Baldock) & Colin Mason, 2017. "The role of government co-investment funds in the supply of entrepreneurial finance: An assessment of the early operation of the UK Angel Co-investment Fund," Environment and Planning C, , vol. 35(3), pages 434-456, May.

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